- THG reduced its annual losses and its revenues grew in the last quarter
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THG’s losses narrowed last year as the retailer boosted the use of “automation” and artificial intelligence across its operations.
The group, whose suite of brands includes Look Fantastic and My Protein, posted a pre-tax loss of £252m, down from a loss of £549.7m in 2022.
Total revenue fell 8.4 per cent year-on-year to around £2bn, but rose 1.1 per cent in the latest quarter.
Profits before the disasters beat January’s forecast of £117 million, rising 48 percent year-on-year to a record £120 million, the group said.
Automotive growth: THG boss Matthew Molding is increasing the use of AI and automation across the group
Matthew Moulding, chief executive of THG, said: “In 2023, we made material progress on our strategic priorities, delivering significant profit growth following supporting our consumers through the cost of living crisis in 2022.
‘This approach led the Group to generate record EBITDA after cash adjustment items in 2023, higher than at the peak of the pandemic.
‘Having completed our recent infrastructure investment programme, the Group is now achieving operating leverage.
THG said it would increase automation at its major centers this year “to further offset persistent inflation and move towards our goal of around half of customer orders being affected by automation.”
Molding added: ‘Our fulfillment network is becoming increasingly optimized through a combination of robotic automation, artificial intelligence and the addition of new Ingenuity customers using existing capacity.
“The return to Group revenue growth in the fourth quarter was particularly pleasing and this momentum has continued into 2024.”
But administrative costs rose last year, which the group attributed to “inflation of marketing costs”, but this was partially offset by “increased app participation”.
THG said its cash reserve stood at £600m at the end of the period.
It exited several “loss-making categories” during the period and sold THG OnDemand.
Looking ahead, THG said it remained confident of a return to adjusted EBITDA margins of 9 percent “over the medium term.”
THG stock fell 0.66 per cent or 0.45 pence to 67.40 pence on Wednesday, having risen more than 5 per cent in the last year.
The group will publish a trading update for the first quarter later this month.