THG reports rise in losses to £550m amid takeover approach

theguardian.com:

The online retail tech company THG said its annual losses widened last year to £550m amid higher costs and as home shopping waned with the end of pandemic lockdowns.

Shares in the troubled group dived 17% on Tuesday as it revealed that pretax losses had almost tripled in the year to 31 March while sales had risen just 2.7% to £2.2bn.

THG, formerly known as The Hut Group, said it had faced higher prices for vital commodities including whey, a product in its sports nutrition business. It had also taken on one-off costs from cutting 2,000 jobs at ditched divisions including the specialist cycling site ProBikeKit. The group has written down the value of assets to reflect “more challenging global markets”.

The share price slump came after THG’s share price shot up 45% on Monday to 95.8p after it revealed a buyout approach from the private equity group Apollo.

In its full-year update on Tuesday, the online shopping group, whose largest shareholder is its founder and chief executive, Matthew Moulding, gave no further details about the offer. It said on Monday that the approach was a “highly preliminary and non-binding indicative proposal”, and that there was no guarantee a firm offer would be made.

Moulding admitted that underlying profits was“not where we planned at the start of the year” and said this was “largely the result of our strategy to minimise the impact of inflation upon our customer base”.

“The challenging macro and inflationary environment required decisive action across the business with around £100m of efficiency savings delivered. A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses.”

He said the group’s Ingenuity division, the online retailer