THG share price lifts after SoftBank sells stake to boss Moulding and Qatar
Beleaguered retailer THG saw its share price leap after SoftBank is to sell its stake to the group’s co-founder Matthew Moulding and Qatar’s sovereign wealth fund.
THG’s shares were boosted 13 per cent on Tuesday afternoon, after the loss-stricken Japanese investment management firm said it would offload its stake.
SoftBank’s stake was once valued at a £500m price tag but will be sold for £31m, representing a £450m loss on the investment.
The investment giant, which has suffered record losses this year, clinched an eight per cent stake in the Lookfantastic and MyProtein owner in May 2021.
After a blockbuster debut onto the London Stock Exchange last year, THG’s share price has taken a hammering to the tune of 85 per cent in the past year to date.
THG’s Moulding said in a statement: “We at THG extend our thanks to SoftBank for their support as a financial and commercial partner, and we will continue to benefit from the relationships formed across their international technology portfolio.
“I’m delighted to be further increasing my family’s stake in THG, continuing our unswerving support following on from other recent share purchases.”
SoftBank opted to liquidate its hedge fund SB Northstar, which agreed to sell its entire shareholding of 80.6m THG shares to Qatar Investment Authority and Moulding.
Last month, THG slashed its yearly forecast, pointing to a slowdown in consumer enthusiasm for beauty and health products,
In half-year results, the retailer said it anticipates adjusted core earnings of £100m to £130m in 2022, much lower than the £161m it recorded last year and previously expected to match.
The brand said it will continue to hike prices at a “slower and lower” rate than inflation, after posting record interim sales.
The e-commerce retailer said a reduced gross profit margin “primarily reflects the strategy to partially shield consumers from adverse macro-economic conditions and a period of unusually high raw material costs (principally whey).”
Profit margins came on at 42.1 per cent, versus 46.5 per cent in 2021, due to “unusually high” material costs for products such as whey protein.
However, it said it was committed to raising prices “slower and lower than inflation to protect consumers and drive market share gains,” on its own brand products.
Sales hit a record £1.1bn, in the six months ending 30 June 2022, with the company sweeping up market share gains in beauty and nutrition markets.
Matthew Moulding’s retail emporium posted an adjusted EBITDA of £32.3m, with an operating loss of £89.2m that reflected the firm’s “consumer price protection investment strategy.”