Annual Report
and Accounts 2024
From a British start-up
to a global brand builder
Contents
Strategic Report
2
Our purpose, vision and values
3
Our businesses
4
Chair’s Statement
6
Chief Executive Officer’s Review
8
Our investment case
10
Our strategy
13
Q&A
14
Our marketplace
16
THG Beauty
20
THG Nutrition
24
THG Ingenuity
26
Chief Financial Officer’s Review
36
Section 172 Statement: Stakeholder Engagement
43
Non-Financial and Sustainability Information Statement
44
Our people
46
Sustainability
62
TCFD
72
Risk management and informed decision-making
Governance
84
Corporate Governance Report
94
Audit Committee Report
100
Risk Committee Report
102
Nomination Committee Report
106
Related Party Committee Report
108
Sustainability Committee Report
110
Directors’ Remuneration Report
124
Directors’ Report
Financial Statements
132
Independent Auditor’s Report to the members of THG PLC
142
Consolidated statement of comprehensive income
143
Consolidated statement of financial position
144
Consolidated statement of changes in equity
145
Consolidated statement of cash flows
146
Notes to the consolidated financial statements
187
Company statement of financial position
188
Company statement of changes in equity
189
Notes to the Company financial statements
Additional Information
194
Alternative performance measures
195
Glossary
We enter the next phase of our
journey as a global beauty, health
and wellness consumer brands
group following the demerger of
THG Ingenuity.
From a British start-up
to a global brand builder
What we do
THG PLC is a global retailer and brand owner,
headquartered in Manchester, UK, operating
through two leading digital-first online consumer
businesses: THG Beauty and THG Nutrition.
THG Beauty operates prominent online platforms
including Lookfantastic, Cult Beauty and Dermstore,
offering a valued route to market for over 1,300
third‑party brands, alongside a specialist portfolio
of owned brands.
THG Nutrition, led by Myprotein, the world’s largest
online sports nutrition brand, spans multiple health
and wellness categories, delivering its products both
directly to consumers and through strategic offline
partnerships worldwide.
Financial highlights
Statutory revenue
£1,751.4m
Total Group revenue (including discontinued
operations)
£1,943.3m
Post-demerger Adjusted EBITDA1
£92.1m
Pre-demerger Adjusted EBITDA1
£123.1m
Post-demerger Adjusted EBITDA margin1
5.5%
Pre-demerger Adjusted EBITDA margin1
6.5%
Statutory operating loss
£147.9m
Statutory loss after tax from continuing operations
£180.5m
More information online:
Our website gives you fast,
direct access to a wide range
of Company information
thg.com
1. Adjusted profit measures as defined in the glossary and
reconciled to the nearest GAAP number in the CFO report.
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Additional Information
THG PLC
Strategic Report
Our purpose, vision and values
Our businesses
Our purpose
To create iconic retail experiences
in the beauty, health and wellness markets.
Our vision
To be the global online leader
in beauty and sports nutrition.
Our values
Our workforce is as diverse as our customer base, which not only enables us to
understand and cater to customers’ needs but also creates a workplace where
individual differences are accepted, valued and encouraged. However, there are
fundamental values that we all believe in.
Ambition
We think
BIG.
We set ambitious
goals and turn
obstacles into
opportunities.
Innovation
We do things
differently.
We celebrate
experimentation
and champion
entrepreneurial
thinking. We focus
on solutions, not
problems, and use
our creativity and
resilience to make
a real impact.
Collaboration
We work
together.
We listen, trust
and create an
environment where
every voice is heard
and valued.
Decisiveness
We make
bold decisions.
We use robust data
to make quick,
informed and
confident decisions.
We take calculated
risks and own our
actions.
Leadership
We lead
by example.
We motivate and
encourage each other
to push the boundaries
of what’s possible.
We foster a culture of
meritocracy, enabling
everyone at THG to
excel, regardless of
background, age or
experience.
THG Beauty
THG Nutrition
Revenue1
£1,108.5m
Adjusted EBITDA1
£79.8m
Adjusted EBITDA margin
7.2%
Revenue1
£579.8m
Adjusted EBITDA1
£34.5m
Adjusted EBITDA margin
6.0%
Retailer of prestige beauty brands through online retail
websites with digital leadership in key markets: the UK
and the US.
Retailer of sports nutrition supplements and health and
wellness products, led by the world’s largest online sports
nutrition brand, Myprotein.
Business overview
– Owner and operator of three major
online beauty retailers: Lookfantastic,
Cult Beauty and Dermstore.
– Critical route to market for over 1,300
brands in high-repeat, regime-based
categories with a focus on the prestige
segments of skincare, haircare,
fragrance and cosmetics.
– Own brand portfolio with clinically
proven ingredients focused on the
more prominent growth opportunities
in prestige skincare, spa and specialist
products.
– New product development through
in-house, vertically integrated
manufacturing capabilities in the UK
and the US.
– Highly loyal global customer base
with 85% of THG Beauty retail revenue
generated from returning customers.
Business overview
– Increasingly omnichannel model, with
a growing offline presence building on
market-leading D2C position.
– Vertically integrated manufacturing
capabilities to power new and improved
product development and speed
to market.
– Presence in major territories with a proven
localisation model, enabling rapid scaling
in emerging territories.
– Operating across multiple categories
in the growing global wellness space,
with consumers taking greater control,
prioritising products and services which
enhance wellbeing.
– Unique to the category licensing
model, monetising the brand IP and
building awareness through multi-year,
multi‑territory agreements.
THG Beauty’s ambition is to be the global
digital partner of choice across the beauty
industry, supporting the channel shift
to online.
Its strategy is to deliver a leading digital
customer experience, product assortment
and elevated brand positioning, while
generating sustainable, profitable growth.
Its strategic priorities are:
1. to maintain its position as the world’s
largest online pure-play prestige beauty
retailer;
2. to support global beauty brands in
addressing the channel shift in marketing
spend from offline to online;
3. to develop a digitally focused portfolio of
prestige owned brands, providing margin
enhancement and differentiation; and
4. to provide innovation and product
development services directly to the
beauty industry.
THG Nutrition’s ambition is to maintain
its global recognition as a trusted
multi‑channel nutrition and wellness brand
for consumers, renowned for quality, value
and innovation.
Its strategy is to build category leadership
in both online and offline spaces across
developed and emerging markets, capitalising
on the long-term trend of consumers
becoming increasingly health‑conscious.
Its strategic priorities are:
1. maintaining Myprotein’s position as the
world’s largest online sports nutrition brand;
2. increasing offline presence to enhance
customer reach through retail, gyms and
experiences;
3. developing Myprotein’s customer base
from ‘specialist gym-goer’ to a broader
‘active lifestyle’ audience; and
4. evolving the brand to broaden appeal,
earning the right to play in high-growth
performance and wellness categories.
1. Revenue and Adjusted EBITDA exclude discontinued categories.
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Financial Statements
Additional Information
The decisions and outcomes generated
by this review are discussed in detail
throughout this Annual Report.
THG Beauty and THG Nutrition are both
leading global consumer-facing businesses
with attractive market growth profiles,
while THG Ingenuity is a high-growth
ecommerce services business with leading
digital marketing, technology and fulfilment
capabilities. The Board considered that
there was a significant opportunity to
create value for Shareholders by demerging
THG Ingenuity into a separate private
company which could focus on scaling
brands digitally, navigating the complexities
of acquiring new audiences, facilitating
frictionless ecommerce and distributing
products to consumers.
On 17 September 2024 we announced
that we were progressing options
for the demerger of THG Ingenuity
into an independent private company
and thereafter launched a placing,
subscription and retail offer to facilitate
the demerger. Pleasingly, the fundraise
was oversubscribed and raised gross
proceeds of approximately £95.4m.
Following a Shareholder general meeting in
December 2024, the demerger completed
on 2 January 2025, in turn simplifying and
transforming THG’s business model into
a global consumer beauty and nutrition
group, with an improved balance sheet,
capital expenditure and cash flow profile.
THG Ingenuity can now continue with its
strategy in a private environment, further
simplifying its client offerings and investing
to scale its platform.
In addition to the demerger, we also took
other strategic decisions which were in line
with the Group’s financial priorities and our
stated intention to simplify and streamline
the Group’s operations. This portfolio
management strategy involved exiting
loss-making discontinued categories
and the disposal of our luxury business,
including coggles.com. Within own brand
beauty, we took the decision to withdraw
from cosmetics and masstige products
to focus on the more prominent growth
opportunities in prestige skincare, spa
and specialist products. This approach is
delivering margin enhancements from a
more focused, relevant consumer offering.
Performance in focus
Throughout 2024 we made conscious
decisions to drive sustainable growth,
enhance our operational efficiency and
strengthen our market position. Delivery
was tempered by the evolving macro
conditions which impacted revenue and
order numbers.
We continued our strategy in THG Beauty
to prioritise categories and markets where
we have a right to win and considerable
brand visibility. As a result of this, we were
able to deliver strong margin progression,
enhance customer engagement through
our loyalty schemes and improve the user
experience across our retail platform.
In THG Nutrition we undertook a significant
brand transition, and while inevitably this
came with an element of short-term trading
pain and disruption, we are emerging as a
healthier business with the foundation and
market positioning for longer-term growth.
We have achieved our desired outcomes
with our refreshed brand and look,
broadening appeal to extend our offering
beyond conventional sports nutrition and
whey protein categories, taking advantage
of the exciting opportunity with offline
retail partners where we have materially
increased the number of physical store
locations across multiple aisles.
We also made significant improvements
to our customer proposition, establishing
faster, more reliable and convenient delivery
options. As a result, customers can shop
with us more flexibly, leading to greater
satisfaction and retention across both our
businesses. Such improvements not only
evidence our determination and forward
planning capabilities, but ensure that we
are well positioned to successfully navigate
future challenges.
Governance
While further information on the
governance and Code improvements which
took place during 2024 can be found
within the Corporate Governance Report,
I would like to reiterate our commitment
to the principles of good corporate
governance and establishing a robust
governance framework which underpins
the successful delivery of our strategic
priorities. As discussed within the ‘Section
172 Statement: Stakeholder Engagement’
section of the Strategic Report, active
engagement with our Shareholders has
been a priority area for us to ensure that
their voices were heard and their interests
appropriately taken into account in our
decision-making processes.
At the beginning of 2025 we were also
delighted to announce the appointment
of Milyae Park to the Board. Milyae is
an experienced non-executive director
with a strong track record in international
retail, consumer and digital businesses,
as well as being a notable advocate
for sustainability, diversity, equity
and inclusion.
It is my pleasure to write to you following a
year of significant change and meaningful
progress for the Group. Our commitment
to excellence in the ecommerce industry
has guided us through various milestones
and I am proud of the resilience and
dedication shown by our entire team.
2024 also marked THG’s 20th anniversary
in business, an achievement that reflects
our ability to continually evolve and adapt
our business model, capitalising on new
developments and growth opportunities
to meet the needs of our customers and
stakeholders.
The competitive landscape in ecommerce
is ever evolving. By consciously innovating
and staying attuned to market trends, we
are able to remain relevant and navigate
macro challenges, albeit this has come
alongside considered decisions to refine
our cost base. To offset the challenges
such as commodity inflation, we have
focused on investing in, and diversifying,
our supply chain, with, for example, local
manufacturing now in place in parts of
Asia for THG Nutrition.
In September 2024 we announced our
intention to transfer from the Transition
category to the ESCC category of the
Official List. While no Shareholder approval
was required to effect the transfer,
the Board consulted extensively and
concluded that it would be in the best
interests of THG and its Shareholders to
proceed with the transfer. In our pursuit
to build shareholder value, raise company
profile and diversify the share register,
the Board also considered the benefits
of inclusion in the FTSE UK Index Series,
which we proudly announced in March.
This is expected to improve passive
investment flows and liquidity and support
execution of the Group’s strategy through
enhancing its visibility.
Strategy in action
Throughout the year, I worked closely
with our CEO, Matthew Moulding, on
the Group’s strategic framework and
associated initiatives to drive our vision
forward. Matthew and the team executed
robustly against our objectives and,
alongside the Board, undertook a thorough
review of our businesses to ensure they
are in good shape for future growth.
see the Corporate
Governance Report on
page 84 for more information
see S172 on page 36
for more information
Her knowledge, skills and network will
be additive to those of our current Board
membership.
Our Board Committees are now well
established and, with particular reference
to the demerger of THG Ingenuity, our
Related Party Committee continues to
ensure that relevant transactions are
subject to robust oversight and challenge,
as appropriate (further details on which
can be found within the Related Party
Committee Report).
Looking ahead
We have now transitioned into a pure-play
consumer business, operating in growth
markets with favourable structural trends.
This shift allows us to concentrate our
efforts and resources on our core strengths
and opportunities.
As we move forward, our focus remains
on THG’s vision and goals. Our aim is
to enhance our customer proposition,
introduce new brands and product
categories, and further grow our presence
in emerging markets. Our dedication to
providing exceptional customer service
and leveraging technology and digital
know-how will support our drive towards
continued success.
During 2025 we anticipate that
further progress will be made on profit
enhancement alongside a return to
Group revenue growth. Our strategic
focus will include the repositioning of our
THG Nutrition business to capitalise on
omnichannel trends and opportunities,
allowing us to strengthen our market
position and deliver sustained value to
our Shareholders.
I would like to extend my gratitude to
all our stakeholders, particularly our
partners, Board members and our Senior
Management for their unwavering support
and dedication. Our culture and our
people, in particular their adaptability,
enthusiasm and 24/7 commitment have
been instrumental in our delivery to meet
the needs of our customers. Together we
have made substantial progress and I am
confident that we will continue to do so in
the future.
Charles Allen,
Lord Allen of Kensington. CBE
Independent Non-Executive Chair
28 April 2025
Strategic Report
Chair’s
Statement
“Throughout 2024 we
made conscious decisions
to drive sustainable
growth, enhance our
operational efficiency
and strengthen our
market position.”
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Financial Statements
Additional Information
As we reflect on the last year, I am
incredibly proud of what we have
achieved together as an organisation.
This year has been transformative,
marked by strategic milestones,
operational resilience and financial
progress with revenue diversification and
cash generation improvements. I want
to take this opportunity to celebrate our
successes, address the challenges and
share the rationale behind key decisions
we made.
– We started the year successfully
integrating pre-eminent skincare brand
Biossance into our own brand Beauty
portfolio. Our prestige beauty brands
are now stocked in over 4,500 stores
worldwide, and are renowned for their
innovative ingredient technology and
wellness expertise.
– We celebrated 20 years in business
– an incredible achievement when
we reflect on our journey and how
our brands have evolved. Whilst
certain pressures have abated, new
challenges and areas of uncertainty
have emerged. As a business we
remain on the front foot to adapt
to preserve our financial health
and take advantage of new growth
opportunities.
– Throughout 2024, we delivered robust
financial discipline, with our focus on
operating efficiencies and investing in
markets where we have a right to win
driving these outcomes. We delivered
a consistent Adjusted EBITDA year on
year despite the challenging economic
conditions.
– Our strategy to simplify and streamline
operations led to the sale of our luxury
goods websites, and certain beauty
own brands. Our resources within
THG Beauty are now prioritised on
those categories and markets which
provide us with more optimal returns
aligned to our financial priorities,
demonstrated by the Adjusted EBITDA
margin for the year being ahead of our
medium-term target.
Cultural highlights
– It was a transitional year for THG
Nutrition, characterised by a period of
strategic realignment and investment.
Whilst this inevitably resulted in
challenges as we contested with rising
costs, Myprotein is now positioned
as a leader in quality and value
across multiple health and wellness
categories. A long-term partnership
with dairy category leader Müller is
testament to the profile of brands we
are now standing alongside.
– At the start of the year our group was
made up of three leading businesses
and collectively we took the decision
to demerge THG Ingenuity after
substantial stakeholder engagement.
– Following the completion of the FCA
listing regime review, we took the
appropriate steps to transfer to the
ESCC category. We welcomed the
output to simplify the listing regime,
and entered the FTSE 250 index in
March 2025.
– Our final milestone was to secure a
long-term capital structure relevant for
the business size and growth profile.
We have materially reduced gross
debt whilst retaining suitable liquidity
to continue investing in our brands to
support their growth potential.
THG Beauty: Target Adjusted
EBITDA margin achieved
Within our Beauty business the strategy
of focusing on higher margin sales and
reducing order volumes that do not
deliver target profitability continued,
driving exceptional Adjusted EBITDA
margin progress. This performance
underscores our leadership position
in the market and commitment to
progressing stakeholder value, including
with our brand partners.
THG Nutrition: A transitional
year, omnichannel paving the
way forward
2024 marked a transitional year for THG
Nutrition characterised by the rebrand.
More consumers globally are now buying
Myprotein products than ever before,
following the temporary reduction in
online customers during the year. This
success has been underpinned by the
retail sales value growth through offline
retail and licensing revenues.
Looking ahead
As we enter the second quarter we are
excited and thoughtful about the road
ahead. Our strategic priorities remain
clear: to drive sustainable, profitable
growth, deepen customer relationships,
and lead with innovation. The beauty and
nutrition businesses will remain central to
our strategy, as we continue to build on
their strong performance and potential.
We are also committed to supporting
Ingenuity through leveraging its
market‑leading services as it embarks on
its independent journey. This partnership
gives our brands and customers a
best‑in-class ecommerce experience,
with value and advancing performance
at the core.
In closing, I want to extend my thanks
to our employees, whose dedication and
passion are the driving forces behind
our achievements. I’m impressed by the
Group’s agility and resilience during a
year of significant change, and I would
like to thank everyone involved at
THG for their immense efforts during a
transformative year for the business.
Matthew Moulding
Executive Director and
Chief Executive Officer
28 April 2025
Whilst the business reported a decline in
total revenue, this was largely driven by
the clearance of old brand product online
at lower price points. We are pleased
to see it progressing back into growth
in 2025, supported by new product
launches and strengthened customer
engagement both online and across
multiple retail locations. This resurgence
highlights the strength of our diversified
portfolio and our ability to adapt and
innovate in response to evolving
consumer demands.
Strategic partnerships
Partnerships have played a key role in
our success this year. By collaborating
with industry leaders and innovative
organisations, we have enhanced our
capabilities and expanded our reach. These
alliances have enabled us to access new
markets, accelerate product development
and strengthen our value proposition
across key sectors. Strategic licensing
partnerships underline the reach of the
Myprotein brand, and highlight the growth
opportunities in licensed brand extensions.
As we look ahead, we remain committed to
fostering these relationships and building
new ones that will further our brand and
create long-term value.
The demerger of THG Ingenuity
This year also saw the pivotal decision
to demerge THG Ingenuity. This step
represents a significant milestone in
our journey to enhance focus, improve
cash generation and unlock value.
By establishing THG Ingenuity as an
independent entity, we have enabled it to
pursue its growth ambitions with greater
agility. At the same time, this allows us
to dedicate our resources to our core
business areas. The demerger reflects
our commitment to delivering operational
excellence, streamlining our priorities
and creating greater transparency for
stakeholders. We are confident this move
will drive long-term success for both THG
Ingenuity and the Group.
Overcoming challenges
While challenges, including the rebrand
transition, commodity pricing and
consumer spend pressures, tested our
resilience, our team’s ability to adapt
and respond effectively has been
instrumental in sustaining our progress.
These efforts have further strengthened
our financial foundation, underpinned by
high quality repeat revenues and channel
diversification.
“Partnerships have played
a key role in our success
this year. By collaborating
with industry leaders and
innovative organisations,
we have enhanced our
capabilities and extended
our reach.”
see Sustainability on page 46
for more information
see the CFO review on
page 26 for more information
Strategic Report
Chief Executive
Officer’s Review
– Across the Group we provided
over 4,000 hours of support
to local communities.
– 92% of our purchased electricity
came from renewable sources.
– Recognised as a top 250
company globally on our efforts
to progress sustainability
through our THG x Planet
Earth strategy1.
– Our Partnership in Action
programme was awarded the
Supply Chain Finance Initiative
of the Year2.
– We launched our Responsible
Marketing Code and Sustainable
Sourcing Framework to better
protect people and the planet.
1. By Sustainability Magazine.
2. Awarded at the Environmental Finance Sustainable Company Awards 2024.
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Financial Statements
Additional Information
Strategic Report
Our investment case
1.
Sustainable long‑term
growth opportunity
from sizeable
consumer end markets
– Global megatrends
continue to underpin
sustained growth in
health and wellness
categories
– Addressable market
growth in both
established and
emerging territories
3.
Active global customer
base with increasing
loyalty and lifetime
value driven by
high‑repeat categories
– Multi-channel distribution
increases brand awareness,
trust and access
– Direct to consumer model
enables greater customer
insights, supporting further
market penetration and
product discovery
4.
Utilising organic levers
and new product
innovation to accelerate
market share growth
– In-house manufacturing
facilities expediting speed
to market
– Penetration of existing
markets and expansion into
adjacent categories
5.
Free cash flow
generation provides
capital allocation
optionality
– Targeting continued
progression to a neutral
net cash position
– Reinvestment in
selective strategic growth
opportunities
2.
Digital-first and
vertically integrated
consumer brands
group, comprising
two market‑leading
businesses
– THG Beauty: Number
one pure‑play online
specialty beauty retailer
– THG Nutrition: World’s
largest online sports
nutrition brand, Myprotein
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Financial Statements
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Strategic Report
Our strategy
Build leadership positions in core territories and categories
What it means
2024 progress
– Sustainable Group revenue growth and margin expansion
– For THG Beauty, maintain online leadership in UK and US
home markets
– Drive brand affinity through accessible authority in
prestige skincare
– For THG Nutrition, maintain position as the leading global
online sports nutrition brand
– Expand category and channel participation
THG Beauty
– Revenue growth in home territories
– Medium-term adjusted EBITDA margin achieved
– Continuation of international reset strategy, de‑emphasising
sales in parts of Europe and Asia
THG Nutrition
– Offline revenue growth through B2B retail and licensing portfolio
– Developed offline footprint across UK grocers and specialist
retailers; ‘fastest growing sports nutrition brand in the UK
retail market’1
Launch innovative and relevant products to global consumers
What it means
2024 progress
– For THG Beauty, across our three distinct retail
destinations, provide customers with a best-in class
curation of brands, from the established houses to the
specialist and emerging brands
– For THG Nutrition, inspire purchases based on quality,
taste, trust and education across sports nutrition and
adjacent categories. Localising products and ranges to
market tastes and trends
THG Beauty
– Extended UK next day delivery service to 1am
– Launch of Biossance Firm and Lift Dual Serum, available in
offline specialist beauty retailers and online D2C
THG Nutrition
– Expanded a royalty model with carefully chosen high quality
partners in key territories, including long-term ‘Müller
x Myprotein’ collaboration to create a tailored range of
high‑protein dairy products, launched in a range of retailers
– Partnership with Jimmy’s Iced Coffee was recognised with the
Grocer’s New Product & Packaging Award for 2024
– Launch of ‘HYROX’ performance range, in conjunction with the
fastest growing mass participation sport
Grow the Active Customer base and drive loyalty
What it means
2024 progress
– Increase the number of online customers who have
shopped with THG during the last twelve months through
retention and new customer acquisition
THG Beauty
– Loyalty scheme now boasting 2.8m members
– Roll out of media mix modelling framework to guide
marketing investment
THG Nutrition
– Completion of brand repositioning to expand our reach beyond
core gym-goers to include technical performers and everyday
lifestyle consumers
– Substantial increase in UK app participation driving higher
AOVs and customer lifetime value
Enhance brand equity through D2C channels
What it means
2024 progress
– Broaden brand awareness and perception
– Use our platform to positively influence the beauty,
health and wellness industries, reflecting ever-changing
consumer values
THG Beauty
– Opening of flagship Lookfantastic store
– Increasing share of retail brand investment, through
strengthened brand partnerships
THG Nutrition
– Through ongoing engagement with consumers and existing
customers, we’ve seen a clear improvement in Myprotein’s
brand equity over the past 12 months and demonstrated
effectiveness at guiding customers through the funnel to
purchase. Myprotein is the most ‘top-of-mind’ sports nutrition
brand in the UK1
See S172 on page 36 for details of the principal
decisions taken by the Board during 2024
See Risk Management on page 72 for more
information on principal risks
THG Beauty and THG
Nutrition are leading
global consumer‑facing
businesses, with attractive
market growth profiles
and strong cash flow
generation potential.
The Board considered that significant
opportunity existed to create value
for Shareholders by simplifying THG’s
business model and demerging THG
Ingenuity into a separate private
company with a focus on scaling
brands digitally, facilitating frictionless
ecommerce and distributing products to
consumers.
Following completion of the demerger on
2 January 2025, THG Ingenuity operates
as a separate, standalone entity without
recourse to the remaining Group.
Rather than reinvesting profits and cash
flow into THG Ingenuity’s technology
capital expenditure requirements, the
demerger presents opportunities to
optimise Shareholder returns and has
accelerated the deleveraging of the
remaining Group.
Our goal is to deliver sustainable growth for our stakeholders, through a focused strategy on key market
prioritisation in categories where we have a right to play.
1. Nielsen Total Market, last 8 weeks to 28/06/2024, brands >£100k value sales.
1. YouGov Brand Tracking, February 2025. Almost 1 in 4 UK consumers in our target audience spontaneously name Myprotein when asked to name a sports
nutrition brand. Myprotein is the most preferred brand among 12 UK sports nutrition brands measured.
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Financial Statements
Additional Information
Strategic Report
Our strategy continued
Medium-term
financial priorities
We aim to deliver sustainable
growth for our stakeholders:
Suppliers
We promote open and transparent working
practices with fair terms of business.
Our people
We have an experienced and dedicated
workforce, and we aim to ensure THG is an
inclusive and supportive environment with
career development opportunities.
Partners
We collaborate for mutual commercial
success through new routes to market,
category expansion and distribution of
our own-brand product.
Society and communities
We adhere to evolving ESG best practice
and make steps to understand and address
our impact to drive positive change.
Customers and consumers
We establish a relationship of trust through
frictionless, high-quality retail experiences,
supporting health and wellness regimes
and product discovery.
Shareholders
We create value for Shareholders through
a focus on sustainable growth, responsible
capital allocation and balance sheet
stewardship.
Q&A
with Business CEOs Lucy Gorman and Neil Mistry
What are the latest trends you’re
seeing in beauty, health and
wellness, and how do you expect
them to evolve into 2025?
Lucy: Personalisation, transparency,
sustainability – these aren’t just trends
any more; they’re expectations. If brands
aren’t evolving, they’re getting left behind.
We’re always adapting, staying ahead of
market shifts to make sure our offering
reflects what customers actually want.
Right now, fragrance is having a huge
moment. It’s moved beyond just a luxury
or occasional buy – people are integrating
it into their daily beauty routines, and
we’re making sure we’re leading that shift.
Neil: Movement-based wellness is bigger
than ever. It’s not just about training
hard; it’s about longevity, recovery and
optimising overall health.
Hydration is a massive part of that, and
we’ve been working tirelessly to ensure
our products meet the changing needs
of our customers, as well as supporting
education and implementation. There’s
huge momentum in the space, and we’re
making sure we’re right at the centre of it.
What have been the highlights in
beauty during the year?
Lucy: It’s been a year of refining and
elevating. Beauty is getting smarter – more
focus on results-driven skincare, fewer
gimmicks.
One of the biggest challenges with
being an online retailer is endless shelf
space. Sounds great in theory, but we’ve
spent the last 18 months refining our
portfolio, really dialling in on prestige and
skincare. The focus has been on curating
the right mix, not just expanding for the
sake of it. And it’s paying off. With the
continued success of the Lookfantastic
loyalty programme, we’re already seeing
the benefits in stronger retention and
increased customer lifetime value.
Tell us about the partnership
with HYROX.
Neil: We’re their official nutrition partner,
and it’s exciting to be part of that journey.
What’s interesting about HYROX when
compared to anything we’ve done in
the past is the mix of strength and
cardio‑based movement. This partnership
really helps us to appeal to this new
hybrid performance and wellness
customer and help them achieve their
goals in training and competition.
We’ve been working closely with HYROX
athletes to create a range of products
designed to help them get the most
out of their workouts and recovery. The
feedback has been great, and I can’t wait
to see how we continue to evolve this
partnership in the coming years.
How are you leveraging
customer insights to refine
your proposition?
Lucy: We listen. Customer behaviour tells
us everything we need to know: what
they want, what’s missing, how we can
improve. That data shapes everything,
from product development to how we
communicate and engage, and deliver.
Neil: Exactly. And convenience is key.
Consumers want high-quality products to
fit seamlessly into their lifestyle. Our job
is to make that as effortless as possible.
How is your Omni-channel
strategy evolving?
Neil: Customers want convenience,
whether they’re shopping in-store, on
their phone, or through socials. One of
the biggest goals of our rebrand was to
make the brand more accessible to the
wider nutrition and wellness market.
THG Beauty – page 16
THG Nutrition – page 20
Market share
growth in key
territories
Revenue
growth
Adjusted
EBITDA
margin
of c.9%
Free
cash flow
generation
Strong
balance
sheet
It’s not just about being present across
multiple channels; it’s about making
sure each point of sale feels seamless.
We’re already seeing great success
with the growth of our offline presence
and increased brand awareness, and
I’m excited to see how our partnerships
with key retailers evolve and how they
complement our online channels.
Lucy: Absolutely. The more ways we can
interact with customers, the stronger the
connection. With the opening of our first
Lookfantastic store, we’ve not only added
another touchpoint but created a space
where customers can fully experience
what Lookfantastic is all about. It’s about
deepening engagement and allowing
customers to discover new products.
What is the secret to creating
and growing category-leading
brands?
Lucy: There’s no secret. Just hard work,
determination and maybe a little bit of
luck. But beyond that, it’s about truly
understanding your customer, staying
ahead of trends, and having the agility
to pivot when needed.
Neil: Yes, I completely agree, and the right
people make all the difference. You need a
team that’s passionate. Innovation doesn’t
come from playing it safe. It’s about
constantly challenging yourself, whether
that’s through product development,
marketing strategies, or how you engage
with customers across multiple channels,
categories and geographies.
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Financial Statements
Additional Information
Looking forward, we anticipate the
following key trends to shape the
beauty market in 2025:
– A continued shift toward
premium beauty, with consumers
increasingly demanding
high‑performance formulations
– Greater focus on sustainability,
driving demand for sustainable
packaging, ingredients and
business models
– Continued adoption of virtual
‘try‑on’ technology and
AI‑powered diagnostics, enhancing
the online shopping experience
– Consumers increasingly
purchasing products for specific
active ingredients
– Biotech innovations to drive more
advanced skincare treatments and
ingredients
– Increasing focused on wellness as
a component of beauty, including
the growth of ingestible beauty
supplements
Looking ahead, we anticipate the
following key trends to shape the
nutrition and wellness market
in 2025:
– Accelerated digital adoption,
offering consumers greater
access to nutritional education.
– Economic development in
low‑income, high-potential
regions to fuel market growth.
– Increased adoption of wearable
technology to further drive
market expansion as consumers
prioritise their wellbeing.
– The rise of weight management
drugs is reshaping consumer
behaviour, promoting healthier
lifestyle choices.
– The rise of short-form media
presents an opportunity – both as
an educational tool and as a new
point of sale.
Strategic Report
Our marketplace
Beauty
THG Beauty operates in the prestige
segment of the global beauty market,
which comprises a number of brands
owned by global beauty & consumer
groups alongside a number of
independent brands.
The global total addressable market for
beauty and personal care was estimated
to be £494bn in 2024, growing by +8%
year on year, and is estimated to reach
£676bn by 20281. The premium segment,
valued at £143bn in 2024, has historically
outpaced the mass segment, and is set
to expand at a compound annual growth
rate (“CAGR”) of 7% between 2024 and
2028. Global retail online penetration is
set to steadily grow from 26% in 2023 to
31% in 2027, which will provide a further
tailwind for growth. The UK online beauty
market continues to perform strongly, with
the UK premium beauty market delivering
double-digit growth in 20242. As a leading
prestige online beauty retailer, we are
optimally positioned to increase revenue
in this fast-growing market.
Products
Prestige brands are generally
characterised by a higher price point, more
selective distribution channels, a high
level of active ingredients, a more curated
product offering and richer brand heritage
than mass beauty brands.
Our owned brand proposition is supported
by manufacturing capabilities in the UK
and US, led by our flagship skincare
brands – Perricone MD, Biossance and
ESPA. THG Beauty seeks to use its digital,
brand and product innovation capabilities
to deliver best-in-class beauty curation
and maximise the digital beauty customer
experience, providing an experience that is
unmatched by any online competitor, and
helping to drive the shift from offline to
online channels.
Key trends
The online global beauty and personal care
market continues to grow, supported by
increases in online penetration across the
world and advancements in technology,
with the aim of providing an immersive
online experience that surpasses that of
physical retail. Despite our consumers
experiencing continued cost of living
pressures, beauty spending remains robust
as consumers consider beauty products an
integral part of their daily routine.
As consumers become increasingly
focused on product efficacy and
maximising value, prestige beauty is
becoming increasingly attractive as
consumers educate themselves on the
benefits of specific ingredients. This has
led to the premium beauty market
outpacing growth in the mass beauty
market in recent years. With its focus
on the premium segment of the market,
THG Beauty is optimally placed to benefit
from further premiumisation of the global
beauty market.
Our position
Our competitive advantage stems from
the synergy of our end-to-end beauty
proposition, spanning retail websites,
owned brands, product development and
manufacturing. Through our retail sites and
owned beauty brands, we forge strong
brand partner and customer relationships,
supported by our capabilities that allow
access to multiple international markets,
new product development, and product
Nutrition – health and wellness
THG Nutrition operates within
the expansive and rapidly growing
global nutrition and wellness sector,
encompassing sports nutrition, vitamins,
weight management and activewear.
This market, valued at over £228bn1
globally, offers significant growth
potential for Myprotein through new
market penetration and product
innovation. While THG Nutrition’s primary
focus remains the £24bn sports nutrition
market (2024 estimate)2, it has expanded
its reach in recent years to address
broader segments of the global nutrition
industry.
Products
We aim to provide a wide array of
products across various segments of
the global nutrition market, including
protein powders, supplements, vitamins,
minerals, bars, snacks and drinks.
The activewear brand MP complements
these offerings with performance-focused
clothing. The primary distribution model
is D2C, enabling deeper engagement
with customers and valuable consumer
insights. In recent years, THG Nutrition has
increased its focus on B2B retail channels
and licensing partnerships, in an effort to
utilise online and offline revenue streams.
Key trends
The global nutrition market is shaped
by several influential trends. Consumers
are increasingly health-conscious and
seeking nutritionally balanced products,
with protein-enhanced options becoming
mainstream. While higher-income
countries currently lead in adopting these
products, growing economic development
in lower-income regions is expected to
drive future demand.
Increasing availability of weight
management drugs, including GLP‑1
medications, are also transforming
consumer behaviour and encouraging
healthier lifestyle choices and the
consumption of healthier products.
The growth of ecommerce, particularly
in developing markets, is another
major factor.
Consumers are not only purchasing
online but also using digital platforms to
educate themselves about the benefits of
nutritional products.
Short-form media has emerged as a
powerful tool in influencing purchasing
habits, with brands that create
engaging, educational content gaining
a competitive edge.
Our position
The sports nutrition industry remains
highly fragmented, with a mix of global
brands like Myprotein and smaller, locally
focused players. As the largest online
sports nutrition brand globally and the
most internationally diverse, we are well
positioned to capitalise on the continued
shift towards ecommerce across markets,
particularly given the extensive localisation
capabilities of our technology and
operating platform.
The D2C model offers significant
advantages, allowing for direct
engagement with consumers, personalised
shopping experiences and data-driven
insights into consumer behaviour.
The Company’s vertical integration
provides control over the supply
chain, enabling efficient new product
development and adaptability to meet
evolving customer trends. Additionally,
Myprotein’s extensive global reach spans
multiple categories and retail locations.
In recent years, we have seen a rapid
growth in protein enhanced foods
and beverages available through retail
channels. In order to capitalise on
this trend, diversify revenue streams
and enable us to reach an even wider
customer base, Myprotein has expanded
into traditional retail channels.
1. Euromonitor – Passport – 2024 market size data;
Performance Apparel, Sports Nutrition, Vitamins
and Dietary Supplement, Weight Management
and Wellbeing
2. Euromonitor – Passport – 2024 market size data;
Sports Nutrition
Future outlook
Future outlook
discovery, underpinning our leading
positions in the UK and US, our home
territories.
Additionally, the rich data insights gained
from our digital customers help to drive
innovation and brand curation, particularly
for emerging niche and independent
brands. The regimen-based nature of our
key categories, skincare and haircare,
also offers a competitive advantage as we
utilise our thought-leadership, education
and personalisation capabilities to further
engage with our global audiences and
act as a source of beauty education and
discovery. We are also capitalising on
the unlimited online shelf space that our
online retail platforms offer, providing
an unparalleled breadth of products
compared to those available through
traditional bricks-and-mortar retailers.
Together, these factors enable us to offer
consumers and brands the leading digital
beauty experience.
1. Euromonitor – Passport – 2024 market size data; Beauty & Personal Care.
2. Circana prestige beauty report December 2024.
THG Beauty page 16
THG Nutrition page 20
This includes developing convenience
products in-house and forming
licensing partnerships to introduce the
brand into new product formats such
as frozen, chilled and ambient shelf
space. These initiatives position us to
capture opportunities in both online and
offline markets.
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Financial Statements
Additional Information
Our proposition is centred around our customers, with a relentless focus on
delivering the optimal purchasing experience, and ensuring our retail sites
are a trusted source of product discovery and education across categories.
We are constantly evolving, remaining adaptive to customer needs and
shifting beauty trends to maintain digital and category leadership.
We reaped the benefits of the prior year’s efforts to prioritise higher‑margin sales in our target
markets, acquiring and retaining those customers that sit in our ideal customer profile. As a result
we delivered ahead of our medium-term Adjusted EBITDA margin guidance, while delivering revenue1
growth and increased customer lifetime values. As we continue to execute against our strategic
priorities, THG Beauty is ideally positioned to capitalise on further growth in the highly attractive
global prestige beauty market.
THG Beauty
Operational review
2024 was a year of strong margin delivery.
While we saw a decrease in Active Customers
and orders due to the prioritisation of territories
that drive higher profitability, the behaviour
of our customer base has shown promising
progression, with average order value and order
frequency improving year on year. This reflects the
higher‑quality customer base we are developing
through our strategic focus on acquiring
customers that sit in our ideal customer profile.
The strength of our customer base is supported
by our existing customer repurchase rates, which
remain above 80% as we continue to focus on
customer engagement and retention.
Across our global audience, we saw continued
growth in app participation and further
improvements in app purchases as a proportion
of revenue.
We were particularly pleased with
our performance in the UK (c.63%
of our online retail sales), given the
well‑documented cost of living
challenges and macroeconomic
uncertainty throughout the year,
with continued year-on-year growth
demonstrating the resilience of our
offering in challenging economic
times. Our online revenue is weighted
towards skincare, followed by cosmetics
and haircare. Fragrance has been a
particularly strong growth category
in recent years, with growth driven by
the addition of a number of influential
fragrance brands in recent years, along
with greater cross-sell of fragrance
to our customer base, which has in
turn supported growth in average
order values.
In the UK, all categories delivered
year‑on-year growth over the peak
trading period, with fragrance being the
standout performer (order value +32%).
Financial performance
THG Beauty delivered a pleasing result
with revenue1 of £1,108.5m (+3.3% YoY;
+4.6% CCY) driven by a robust retail and
own brand performance, with growth in
every quarter (excluding manufacturing).
During the last 24 months, the business
has elected to reduce marketing
investment in less profitable territories
(including parts of Europe and Australia),
and categories. This intentional strategy
to reduce revenue temporarily in 2023
has underpinned significant margin
recovery, with FY 2024 adjusted EBITDA
margins 7.2% (above 6.0% medium-term
target).
Active Customers
7.9m
2023: 8.5m
Total orders2
16.1m
2023: 16.8m
Revenue from
returning customers3
85%
2023: 83%
AOV
£66
2023: £64
App participation4
27.5%
2023: 17.1%
Social media
community
7.2m
This geographic and product laser
focus has shaped a growing prestige
beauty business which is substantially
UK & US based, with improved margins
and operating KPIs, notably improved
customer retention, order frequency
and lifetime value.
Within own brand beauty, we took
the decision to focus on high growth
opportunities in prestige skincare, spa
and haircare products. This provided a
headwind to revenue but is delivering
margin enhancements from a more
focused, relevant consumer offering.
Looking ahead, with the strategic
pivot towards higher margin sales
now complete – alongside the
continued strength of our brands,
prestige market trends, and our refined
customer acquisition strategy – we
enter 2025 well-positioned to drive
sustainable revenue growth at our target
margin level.
Revenue by channel
Retail
c.79%
Own brand
c.11%
Manufacturing
c.10%
Online retail by territory
UK
c.60%
US
c.20%
Europe
c.16%
ROW
c.4%
Online category split
Skincare
c.43%
Haircare
c.17%
Cosmetics
c.21%
Fragrance
c.10%
Body
c.7%
1. Revenue excluding discontinued categories.
2. Number of orders is defined as orders fulfilled within
the period.
3. Sales of all orders from customers shopping more than
once with THG.
4. Percentage of orders made through mobile applications.
1. Revenue excluding discontinued categories.
Strategic Report
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Financial Statements
Additional Information
Lookfantastic store
We proudly launched our first
permanent physical retail destination
for Lookfantastic in Manchester.
This flagship brand experience store
strengthens our relationships with
brands and consumers by offering a
physical space to interact with the
Lookfantastic brand, while also serving to
further increase our UK brand awareness.
As an example of the new opportunities
for brand development the store offers,
we have selectively run ‘store takeovers’
for brands such as Color Wow and
Kylie Cosmetics since opening, with
accompanying in-store events, supported
by online activations, that have helped
drive increased awareness and sales of
these brands.
In Q4, Lookfantastic became the first
specialist beauty retailer to partner with
established British brand, The White
Company, in addition to securing other
new key listings across categories
including cosmetics, fragrance and
fast‑growing dermatological skincare.
Strategic highlights
Across the UK online beauty market,
Cult Beauty and Lookfantastic were the
only two participants to grow their brand
share of search1 in Q4 2024. We also saw
Lookfantastic’s prompted awareness
reach its highest ever level in November
2024. This increasing awareness is
strategically important as we consciously
shift our marketing efforts to a
brand‑centric approach with acquired
customers increasingly meeting our ideal
beauty profile – reducing our reliance on
price competition.
At the beginning of the year, we
integrated prestige skincare brand
Biossance into our own brand portfolio,
with the brand successfully replatformed
within two weeks of being acquired.
The replatform delivered significant
performance improvements and helped
to bring the brand into immediate
profitability – a complete turnaround
from its previous loss-making position
upon acquisition. Our prestige own
brands (led by Biossance, Perricone MD
and ESPA) are sold by 1,000+ global
partners in over 50 countries, including
luxury department stores, hotels, spas
and salons.
2024 saw the expansion of Perricone
MD, ESPA and Christophe Robin’s
distribution in the luxury hotel segment
through further development of our
strategic partnership with Vanity
Group, with our distribution expanding
to 70,000+ rooms and 30+ countries
globally. 2024 was also another year of
recognition of the strength of our own
brand product innovation, powered by
THG Labs, with Perricone MD winning
Women & Home’s ‘Best Sensitive Eye
Cream’, Ameliorate winning the Conde
Nast Traveller Beauty’s ‘Best Body
Lotion’, and Biossance’s ‘Squalane +
Vitamin C Rose Oil’ being named in
WWD’s 100 Greatest Skincare Products
of All Time.
2024 marked a year of significant
progress in the strategically important
US beauty market (c.20% of our online
beauty sales). Brand awareness for
Dermstore, our US retail fascia, continues
to grow, with its share of search growing
41% faster than the overall market
in November 2024. To support our
wider developments in the US, we also
appointed our first US Beauty Brand CEO,
Amy Fisher, to lead the development of
our scaling US beauty brand portfolio.
1. Data taken from November 2024 against pureplay e-retail competitors. Share of search data: Google.
Strategic Report
THG Beauty continued
2025 priorities
Building on our progress and focus on
home markets, we aim to:
– Maintain THG Beauty’s position as
the world’s leading online pureplay
premium beauty retailer.
– Continue to evolve our brand and
category assortment to ensure we
are offering our customers the most
complete online beauty shopping
experience.
– Continue to expand our digital
market share in our key markets.
– Enhance customer loyalty through
further development of our loyalty
programme, personalisation
capabilities and product insights.
– Further develop our global beauty
community across all key social
channels.
– To increasingly be seen as a trusted
source of education, expertise and
authority within the industry.
– Strategically expand our own
brands’ global distribution through
new and existing partners.
Loyalty
THG Beauty has seen an increasing
impact from the loyalty programmes
across its retail sites, with the
Lookfantastic UK loyalty programme
now boasting over 2.9 million members,
adding over 0.9 million members
in 2024. We have seen significant
improvement in the quality of customer
health through our loyalty programmes,
with spend per account being 32%
higher than non-loyalty members. This
increased engagement is underpinned
by a double-digit uplift in average order
value and order frequency, helping to
drive incremental sales through greater
cross-category and brand purchase
behaviour. In FY 2024, over 40% of online
Lookfantastic UK revenue came from
Loyalty customers, with Loyalty sales in
double-digit year-on-year growth in the
quarter.
Our loyalty programmes are one
of the key drivers of improving the
quality of our customer base in our
key territories, with the enhanced
levels of data provided through our
loyalty programmes enabling us to
continually deepen our understanding
of our customer base, which in turn,
leads to elevated relationships with our
brand partners, creating value through
informed decision-making. Our loyalty
programmes also enable us to offer
greater layers of personalisation to our
most engaged customers, helping to
increase their levels of engagement and
satisfaction with our retail sites, which
in turn supports higher retention and
increased customer lifetime values over
the long‑term.
‘What the SPF?’ campaign
Our consumers increasingly view THG
Beauty as a trusted source of education,
expertise and authority in the beauty
space, delivered through rich editorial
content, detailed product descriptions, and
comprehensive customer support.
In 2024, we launched a landmark SPF
campaign to educate consumers on the
benefits of SPF, the available product
options, and the campaign to remove VAT
from SPF products. Using our multi‑channel
model, we maximised awareness through
emails, app notifications, social content
and influencer collaborations. We also
engaged with leading publications such
as Cosmopolitan, Glamour, Women’s
Health, ELLE and Marie Claire, securing
PR coverage that generated 138 million
impressions across over 80 publications.
In addition to raising awareness, the
campaign drove 20% sales growth in
featured SPF products, acquired over
10,000 new customers, and increased
our UK SPF market share by 3%.
“We’re excited to bring the
Lookfantastic experience to
life with our concept store.
This innovative retail space
goes beyond products,
offering a unique and
immersive beauty destination.
It perfectly complements
our omnichannel strategy,
bridging the gap between our
established online community
and the success of our
pop‑up events. Customers can
discover and purchase, and
also enjoy beauty services,
bringing digital beauty into
the third dimension for our
loyal, local customer base in a
whole new way.”
Lucy Gorman, Chief Executive
Officer, THG Beauty
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Additional Information
1. Number of orders is defined as orders fulfilled within
the period.
2. Sales of all orders from customers shopping more than
once with THG.
3. Percentage of orders made through mobile applications.
Myprotein UK brand tracking
A recent YouGov poll highlighted strong
consumer support for Myprotein in
2024, bolstered by the success of our
recent product partnerships. These
insights highlight Myprotein’s strong
market position and preference amongst
consumers. By demonstrating increased
brand awareness and reach in 2024, we
have created a solid foundation for further
growth and expansion while helping
inform our marketing strategy for 2025.
Key findings from the poll include:
– Following the successful Myprotein x
Müller launch, 85% of UK consumers
aware of the partnership are likely to
consider buying from the range in the
future1.
– Among 12 UK sports nutrition brands
analysed, Myprotein stands out as the
UK’s most preferred sports nutrition
brand, with brand recommendation up
16% YoY2.
– Myprotein is the category leader
in driving consumers through the
purchase funnel – ranked number
one in turning brand awareness into
consideration and number one in
converting buyers into brand loyalists1.
– Myprotein is the most ‘top-of-mind’
brand in the UK, with one in five UK
consumers spontaneously naming
Myprotein when asked to name a
sports nutrition brand1.
Strategic Report
With a mission to ‘empower those who demand more’, the repositioning
of Myprotein has underpinned growth in brand awareness and brand
presence beyond D2C, through an omnichannel strategy.
2024 marked a transitional year for THG Nutrition, characterised by the rebrand and macro
pressures resulting in cost headwinds. More consumers now have access to Myprotein products
than ever before, through offline retail and licensing partnerships. The brand now serves a broader
demographic of consumers across multiple categories, empowering our customers to fuel their
lifestyles and incorporate our products into their daily routines.
THG Nutrition
Active Customers
6.1m
2023: 6.7m
Total orders1
11.3m
2023: 12.8m
Revenue from
returning customers2
84%
2023: 84%
AOV
£47
2023: £49
App participation3
30%
2023: 19%
Social media
community
9.6m
2023: 10.5m
1. November 2024, YouGov Brand Tracking Research.
2. All data sourced from YouGov Brand Tracking Feb ’25 and compares against Feb-April ’241 YouGov
Brand Tracking, February 2025. Almost 1 in 4 UK consumers in our target audience spontaneously name
Myprotein when asked to name a sports nutrition brand. Myprotein is the most preferred brand among
12 UK sports nutrition brands measured.
3. B2B, manufacturing.
4. D2C retail, marketplaces.
Financial performance
2024 was a challenging year for THG
Nutrition, reporting revenue of £579.8m
(2023: £657.9m) and Adjusted EBITDA
of £34.5m (2023: £88.9m). While the
business reported an overall reduction
in revenue, this was largely driven
by a one‑time ASP reduction where
promotional activity was elevated
online to clear old brand stock. With the
rebrand complete, ASPs are progressively
recovering.
Record high whey prices alongside
challenges in the Asia market relating
to FX movements continued to weigh
on trading performance. In light of this
our pricing strategy in the region was
adapted to defend margins.
While online sales declined, offline retail
and licensing saw rapid growth in 2024.
Supported by the rebrand, offline retail
and licensing revenue delivered rapid
growth through existing accounts plus
new listings secured across the UK
and the US primarily. Notably, retail and
licensing revenues have a significantly
reduced exposure to whey.
Looking ahead to 2025, the expected
normalisation of whey price and
expected entry of high-concentrate
whey protein into the market provides
optimism for a more stable commodity
landscape. Against this backdrop and
ASP normalisation, the focus for 2025
is a return to sustainable online revenue
growth, alongside margin accretion.
Offline retail and licensing growth has
been key to growing the customer base
in 2024.
Revenue by channel
Offline3
c.15%
Online4
c.85%
Online retail by territory
UK
c.33%
Europe
c.38%
Japan
c.18%
ROW
c.11%
Online category split
Myprotein
c.70%
Myvitamins
c.9%
Clothing
c.8%
Other
c.13%
Operational review
Initiatives including local activations to support
new customer acquisition and increased brand
awareness have been implemented, leading to
growing customer engagement and advocacy,
supported by third-party feedback.
In line with our strategic priority to expand
Myprotein’s offline presence alongside online,
we’ve grown our portfolio of licensed products and
increased retail listings, particularly in ‘on‑the‑go’
formats. These partnerships help to diversify
revenue and enhance margin potential. While
D2C remains our primary channel, we maintained
strong momentum in offline throughout 2024,
benefiting from synergies with key partners.
This omnichannel growth strategy will continue
into 2025, with a renewed focus on building
brand recognition and driving both acquisition
and retention. Although online Active Customers
and orders declined in 2024 amid a challenging
D2C backdrop, this was offset by growth in offline
engagement, resulting in more total customers
interacting with the brand.
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Strategic Report
THG Nutrition continued
New product development
THG Nutrition’s digital presence allows
for vast amounts of first-hand consumer
data insights, providing us with a
detailed understanding of ever‑changing
customer preferences. These insights
informed new innovation in 2024
including the introduction of ‘Sea Moss
Gummies’, ‘Clear Protein Superblend’ and
‘Lion’s Mane Gummies’.
One of our many success stories in the
year has been our highly anticipated
HYROX range.
Following the success of our brand
partnership launched in 2023, we
have been working closely with the
athletes to develop a line of products
that supports the HYROX community,
whether they are gearing up for the
race, pushing their limits or recovering
afterwards. Formulated for the dedicated
participant and backed by experts,
the HYROX series fuels everyone from
first-time competitors to world record
breakers. The range includes energy gels,
electrolyte blends and post‑workout
blends, all available in various flavours
and pack sizes to appeal to the masses.
Retail
By strengthening our retail presence,
Myprotein has connected with a wider
audience, while enhancing its brand
position and dominance within the
sports nutrition category. With only
35%1 of sports nutrition sales generated
through online channels, there remains a
compelling opportunity for THG Nutrition
to grow through both online and offline
retail channels.
2024 saw the expansion of our global
B2B offering, with new listings in high
footfall retailers including WHSmith and
Holland & Barrett, adding to our growing
portfolio of retail partners.
As we continue to expand our retail
presence, consumers have even greater
opportunities to interact with the brand
through physical and digital points of sale.
The US and Asia continue to represent
key strategic markets for future growth,
with retail partnerships including Costco
and GNC being used to build brand
awareness and complement our digital
sales channels.
2025 priorities
Building on our progress and broader
market developments, we aim to:
– Maintain Myprotein’s position as
the world’s largest online sports
nutrition brand.
– Expand appeal in high-growth
performance and wellness
categories and develop Myprotein’s
customer to a broader ‘active
lifestyle’ audience.
– Leverage the long-term trend
of increased consumer health
consciousness and demand for
nutritional products across diverse
categories.
– Further partnerships and
innovations through online and
offline channels to enhance
customer reach through retail, gyms
and experiences.
– Utilise our vertically integrated
business model and in-house
manufacturing capabilities to
allow us to develop products to an
industry-leading standard and bring
them to market at pace.
– Enhance our localised approach,
supported by our strong global
network of influencers, affiliates
and social media followers that
drive direct traffic.
Licensing and partnerships
The aim of our licensing agreements is to
be mutually beneficial and allow partners
to benefit from our digital footprint,
channel reach and brand recognition.
Through 2024 we have partnered
with several category-leading brands,
including the award-winning partnership
with Jimmy’s Iced Coffee – Winner of
The Grocer’s New Product & Packaging
Award 2024: Dairy Drinks.
As global megatrends towards health
and wellbeing continue to influence
consumer preferences, we have enabled
our partners to build this into their
existing ranges through ‘high protein’
product variation while benefiting from
Myprotein’s brand recognition in this
fast‑moving and crowded product
segment.
Our partnership with Iceland has
continued to flourish with 16 more
products added to the range and
distribution in all of Iceland’s 1,000+
stores nationwide. The retail partnership
aims to add an incremental purchasing
occasion to our existing Myprotein
customer base, while also introducing
new customers to the brand by
increasing exposure.
Customers
Our customer base remains diverse and
loyal, with high levels of repeat purchase
and engagement. More customers are
buying Myprotein products than ever
before, with new offline customers
offsetting the temporarily depressed
online active customer levels. Our
marketing discipline focuses on
increasing share of revenue through
cost-effective channels. One of our
most effective tools is our app, with
revenue participation now at 30% (2023:
19%). Through the app our customers
can benefit from a personalised sales
experience, helping us yield improved
AOVs and order frequency, while we gain
valuable customer insights on purchasing
behaviour.
We continue to look at new and
innovative ways of connecting with
and deepening relationships with our
customers. An example is our HYROX
partnership which involves athletes and
fitness enthusiasts and taps into the
trends towards hybrid athletic training.
This demonstrates Myprotein’s growing
authority in the endurance market while
strengthening and growing the Myprotein
community.
Strategic highlights
Our brand repositioning in 2023
accelerated our transition to an
omnichannel approach. Through online
and offline offerings across developed
and emerging markets, we’re positioned
to capitalise on the long-term trend of
consumers becoming increasingly health
conscious. With a focus on wellness and
category expansion, we have worked
towards our strategic objectives of
helping break down the barriers of
the fitness industry and empowering
everyone to live a healthier, more
active lifestyle.
In 2024, THG Nutrition announced several
product partnerships, notably with
Jimmy’s Iced Coffee, Müller, Kirsty’s and
Bakeaway. All our licensed partnerships
are with market leaders within their
categories, allowing us to benefit from
their product or supply chain expertise.
Each partnership aims to support each
party by allowing partners to benefit from
Myprotein’s brand awareness and digital
footprint. 44% of our target demographic
consume a protein-enhanced product
bought in grocery (excluding protein
supplements), twice as high as the UK
average, providing a clear incentive for
our partnering brands.
We continue to invest in the localisation
of Myprotein in key international markets
with local manufacturing in established
locations (UK, US), and now live in Japan
and India. This localised approach
has helped to enhance the customer
experience through better delivery lead
times, production cost savings and
improving our ability to understand and
meet varying customer preferences.
Furthermore, this approach helps to
reduce our exposure to exchange rate
volatility by creating natural hedges.
1. Source: Euromonitor – https://www.euromonitor.com/article/the-changing-landscape-for-sports-
nutrition-retailing-in-western-europe?utm_source=chatgpt.com).
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Additional Information
Helping brands achieve profitable,
long-term growth
A creative powerhouse like no other,
designed to supercharge brand
growth
World-class fulfilment designed
to drive customer acquisition and
retention
Accelerating brand growth through cutting-edge commerce solutions
THG Commerce
Enables retailers to manage
a frictionless ecommerce
environment with continually
improving functionality and feature
updates including:
– Next-generation ecommerce
platform (Altitude): a fast, scalable
and secure website with a
comprehensive ecosystem of
commerce, analytics and content
integrations. Altitude offers faster
performance, secure and reliable
protection, greater flexibility and
ease of use to customers.
– Omnichannel store technology:
connects the digital and physical
worlds for a seamless shopping
experience.
– Marketplaces: connecting brands to
third-party marketplaces including
Amazon with products fulfilled
through THG Fulfil.
– Artificial intelligence (AI)-powered
features: utilising machine learning
and AI to make personalised
product recommendations to
consumers.
THG Studios
THG Ingenuity’s marketing solution supports
brands efficiently reach and acquire new
audiences by combining creative innovation
and full‑service production with data-driven
performance marketing to maximise its
customers’ return on investment.
In 2024, three new innovative products were
developed that blend human creativity with
advanced technology to deliver high‑performance
marketing:
– iLab: A creative innovation hub testing and
integrating cutting-edge technologies to build
future-focused solutions:
– AI-driven experiences: using AI to create
and deploy content, with emotional
intelligence and ethical practices embedded
in every project;
– AR/VR: reimagining storytelling with
immersive, personalised experiences in both
digital and physical spaces; and
– Virtual screens: leveraging virtual
production with LED panels to blend
physical and virtual elements, creating
efficient, sustainable and limitless content
possibilities.
– Performance labs: using advanced tool, data
and analytics to drive creative decisions that
deliver high performing assets
– Media mix modelling (“MMM”): its approach
provides data showing the true impact of
client investment, detailing which channels
deliver the best returns and how to optimise
spend. MMM answers two critical questions:
1. Which sales were driven by marketing, and
which would have happened anyway?
2. How much can customers optimise
incremental channels before
hitting diminishing returns?
THG Fulfil
Leveraging investment in automated fulfilment capabilities, during 2024
THG Fulfil accelerated its business development focus towards clients
requiring fulfilment and courier management services, to improve their
checkout to delivery experience. Customers benefit from improved
ecommerce operation uptime, and distribution cost efficiencies.
Improvements in order processing efficiency enabled a market-leading
next-day delivery cut-off to 1am, meeting the increasing demands from
customers for shopping flexibility.
Key benefits to THG brands include:
– UK standard delivery timeframe from order to delivery of 1.5 days (vs.
3 days market average)
– average UK customer order to dispatch speed of 4.8 hours
– US standard delivery timeframe of 2.3 days (2023: 2.7 days)
– Ability to upgrade customer orders to next-day delivery free-of-charge
in 2024
– APAC standard delivery timeframe of 4.4 days (2023: 5.8 days).
THG brands saw a positive impact on its Trustpilot scores, with the
average rating rising from 4.3 in 2023 to 4.4 in 2024.
In October 2024, THG Fulfil was awarded ‘UK eCommerce Delivery and
Logistics Partner’ at the UK eCommerce Awards.
Strategic Report
THG Ingenuity
During 2024, alongside advancing our strategic priorities, we focused on positioning THG Ingenuity
for success as a private company. THG Ingenuity remains a key supplier to THG PLC with a
long term service contract in place comprising; platform infrastructure and technology services,
warehouse, fulfilment and courier services, and marketing and content creation.
THG Ingenuity provides user-friendly, scalable and flexible ecommerce solutions to its customers. It continuously evolves its
technology, marketing and fulfilment solutions to stay relevant to market needs and the priorities and challenges its customers
are facing.
Across the three pillars of e-commerce enablement, THG Ingenuity is the partner of choice for an increasing roster of international
brands and retailers.
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Strategic Report
Overview of FY 2024 result
A keen focus on cash management
against the backdrop of a
challenging economic environment,
with the completion of the
demerger of THG Ingenuity further
accelerating gross deleveraging.
THG Beauty delivered on strategy
with growth in core markets and
Adjusted EBITDA margins above
medium-term guidance driven by
the focus on more profitable sales.
Reduction in revenue following
completion of portfolio
management within THG Beauty
to exit loss‑making discontinued
categories driven by the focus
on cash.
THG Nutrition had a challenging
online performance alongside record
high whey prices impacting the FY
2024 result. Following the major
global rebrand, decisive action was
taken to reposition THG Nutrition
for a return to sustainable revenue
growth and margin recovery.
£550m of cash and available
facilities at year end (ahead
of demerger – with £89.0m of
cash leaving the Group with THG
Ingenuity), providing excellent
liquidity and setting a solid
foundation for THG’s future as
a cash-generative consumer
brands Group.
Post year end, successful completion
of debt refinancing to 2029.
Total Group overview
20241
£m
THG
Beauty
THG
Nutrition
Central
Post
demerger
THG
Ingenuity2
Inter-group
elimination
Pre
demerger
Discontinued
categories
Total
FY 2024
External revenue
1,108.5
579.8
—
1,688.3
191.9
—
1,880.2
63.1
1,943.3
Internal revenue
—
—
—
—
462.9
(462.9)
—
—
—
Total revenue
1,108.5
579.8
—
1,688.3
654.8
(462.9)
1,880.2
63.1
1,943.3
Adjusted EBITDA
79.8
34.5
(22.2)
92.1
31.0
—
123.1
(8.7)
114.4
Margin
7.2%
6.0%
—
5.5%
4.7%
—
6.5%
(13.8%)
5.9%
2023
£m
THG
Beauty
THG
Nutrition
Central
Post
demerger
THG
Ingenuity
Inter-group
elimination
Pre
demerger
Discontinued
categories
Total
FY 2023
External revenue
1,073.3
657.9
—
1,731.2
165.5
—
1,896.7
148.6
2,045.4
Internal revenue
—
—
—
—
519.9
(519.9)
—
—
—
Total revenue
1,073.3
657.9
—
1,731.2
685.4
—
1,896.7
148.6
2,045.4
Adjusted EBITDA
44.1
88.9
(21.8)
111.3
11.0
—
122.3
(8.2)
114.1
Margin
4.1%
13.5%
—
6.4%
1.6%
—
6.4%
(5.5%)
5.6%
1. This report includes a number of non-GAAP measures and alternative performance measures. Adjusted results are consistent with how business performance
is measured internally and presented to aid comparability of performance. See more information within the glossary and reconciliations to statutory measures
within this report.
2. Following the completion of the demerger, we have concluded that THG Ingenuity meets the criteria of being classified as a discontinued operation
(IFRS 5: Non-current Assets Held for Sale and Discontinued Operations). See note 12.2 to the financial statements for more information. FY 2023 has been
restated to reflect certain leased assets and operational activities of THG Experience within THG Ingenuity which had previously been reported within
THG Beauty.
Reconciliation to statutory revenue
2024
£m
2023
£m
THG Beauty
1,108.5
1,073.3
THG Nutrition
579.8
657.9
Post-demerger revenue
1,688.3
1,731.2
THG Ingenuity (external)
191.9
165.5
Pre-demerger revenue
1,880.2
1,896.7
Discontinued categories
63.1
148.6
THG Ingenuity (external) – classified as discontinued operations for statutory presentation
(191.9)
(165.5)
Statutory continuing revenue
1,751.4
1,879.9
The demerger completed on 2 January 2025. Therefore, the results of THG PLC for FY 2024 include THG Beauty, THG Nutrition
and THG Ingenuity, reflecting performance prior to the demerger.
The segmental reporting and categories in this report (and the table above) are summarised as follows:
Post-demerger – this represents the streamlined Group moving forward, comprising THG Beauty and THG Nutrition, net of central
costs and excluding THG Ingenuity and discontinued categories, and will constitute the underlying results of THG PLC reported
from FY 2025.
Pre-demerger – includes THG Beauty, THG Nutrition and THG Ingenuity as have previously been reported in prior years (excluding
discontinued categories); following the completion of the demerger, THG Ingenuity is now a private company and its results will
not be reported within the results of THG PLC after FY 2024.
Discontinued categories – as part of our focus on continually improving the business and responding to the economic backdrop,
several non‑core brands and product offerings identified as loss-making or non-cash generative were exited across FY 2023
and FY 2024 improving the margin potential of the business. These categories have been removed from the post-demerger and
pre‑demerger result as an adjusted performance measure to provide a comparable basis going forwards.
“ With prudent cash
management and a
reduction in gross leverage,
we have navigated a
year of strategic change
with robust financial
discipline, positioning
ourselves for sustainable
growth and margin
recovery.”
Damian Sanders
Executive Director and Chief Financial Officer
Chief Financial
Officer’s Review
All numbers and tables subject to rounding
throughout this report.
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Additional Information
The USA is a growing market for the Group with 19.9% of revenue (2023: 17.7%). Dermstore is our primary beauty fascia in the
US and sells over £170m annually, whilst roughly half of THG Beauty manufacturing sales are generated in the US from our New
Jersey labs facility.
Europe and the rest of the world both saw sales decline year on year in 2024 driven by both the prioritisation of higher margin
sales in THG Beauty which lead to a conscious pull back on some sales activity in Europe and Asia, and the exchange rate on the
Japanese Yen which adversely impacted on our ability to compete in THG Nutrition in Japan, which is one of Myprotein’s biggest
markets.
Discontinued
Discontinued operations – THG Ingenuity
Total revenue of £654.8m (2023: £685.4m), a decrease of -4.5%. This is due to the reduction in internal revenue of 11.0%, partially
offset by the increase in external revenue of 16.0%.
The investments made across the THG Ingenuity offering over a number of years, alongside advancing strategic priorities, have
positioned THG Ingenuity for success as a standalone private company. This, combined with the ongoing focus on higher-value
and higher-margin clients, has started to deliver, particularly across fulfilment services. This enabled THG Ingenuity to deliver
Adjusted EBITDA of £31.0m (2023: £11.0m) with a margin of 4.7% (2023: 1.6%), an increase of 310bps YoY.
Internal revenue of £462.9m (2023: £519.9m) relates to services provided to the wider THG Group, including platform
infrastructure and services, warehouse fulfilment, courier services and marketing services. Internal revenue declined due to the
Group exiting loss-making categories and territories along with lower D2C sales in THG Nutrition, which in turn has generated
lower volumes for THG Ingenuity.
Discontinued categories
During 2023, the Group announced its intention to simplify and streamline its operations, undertaking a strategic review of
loss‑making categories and territories. Given the size and complexity of the Group, this exercise has continued during 2024,
leaving the continuing Group in a streamlined, strong market position, driving positive cash flow.
Several small, non-core brands and product offerings were exited during FY 2024. These brands generated £63.1m of revenue
(FY 2023: £148.6m) and contributed an Adjusted EBITDA loss of £8.7m (FY 2023: £8.2m). These losses will not continue into
FY 2025.
The prior year discontinued categories have been restated to include consistent categories disclosed in FY 2024 to provide
a like‑for-like comparison. (See note 2 within the financial statements.)
Group financial review
Statutory results
Year ended
31 December
2024
£m
Year ended
31 December
2023 (restated)1
£m
Continuing operations
Revenue
1,751.4
1,879.9
Cost of sales
(1,057.8)
(1,082.5)
Gross profit
693.6
797.4
Distribution costs
(231.0)
(277.3)
Administrative costs
(610.5)
(559.4)
Operating loss
(147.9)
(39.2)
Finance income
9.0
12.9
Finance costs
(63.6)
(65.9)
Loss before tax
(202.4)
(92.3)
Income tax credit/(charge)
21.9
(15.7)
Loss for the financial year from continuing operations
(180.6)
(108.0)
Discontinued operations
Loss for the financial year, net of tax
(145.6)
(140.4)
Loss for the financial year
(326.1)
(248.4)
1. Restated for the impact of THG Ingenuity being classified as a discontinued operation.
Headlines
– Post-demerger Group revenue of £1,688.3m (2023: £1,731.2m) and Adjusted EBITDA of £92.1m (2023: £111.3m) with a margin
of 5.5% (2023: 6.4%). Revenue reduction of 2.5% driven by a revenue performance within THG Beauty of +3.3%, offset
by a decrease in THG Nutrition of -11.9%. Significant 310bps improvement in THG Beauty margin reflecting the continued
prioritisation of more profitable sales and exiting loss-making and low-margin territories and brands, partially offsetting the
challenging trading environment for THG Nutrition, most notably the record high whey prices.
– Pre-demerger Group revenue of £1,880.2m (2023: £1,896.7m) and Adjusted EBITDA of £123.1m (2023: £122.3m) with a margin
of 6.5% (2023: 6.4%) with both metrics remaining broadly stable.
– THG Beauty result driven by strong performance driven by the UK (with 53% of revenue generated outside of the UK). THG
Nutrition by contrast experienced a more challenging year, primarily as a result of weaker online sales, a result of the rebrand
and lower than expected Asia performance.
– Operating loss of £147.9m (2023: £39.2m) increased due to the combination of the weaker performance in THG Nutrition
combined with increased costs recognised within adjusting items in the year. These costs primarily relate to the decision made
to exit loss‑making categories which led to one-off costs for impairment of related assets and an inventory provision and the
clearance of old brand stock following the rebrand within THG Nutrition.
THG Beauty
Standout adjusted EBITDA performance from THG Beauty
Revenue increased by +3.3% to £1,108.5m (2023: £1,073.3m) driven by retail and own brand performance. Revenue increased
in core territories of the UK and US, offset by strategic reductions in sales across Europe and Asia to ensure a focus
on higher‑margin customers.
Drivers were skincare, cosmetics and fragrance, with fragrance proving in high demand throughout the year.
Adjusted EBITDA delivered of £79.8m (2023: £44.1m). Adjusted EBITDA margin of 7.2% (2023: 4.1%) has almost doubled YoY
following a return to revenue growth, the positive impact of the strategy to focus on higher-margin sales and the normalisation
of manufacturing profitability.
THG Nutrition
Continued evolution of strategy following a challenging year
THG Nutrition reported revenue of £579.8m (2023: 657.9m) being a -11.9% decrease. Whilst the business reported a revenue
decline, this has been primarily driven by the one-time average selling price reduction of 11.0% due to clearance on old brand
product online. Good momentum is being seen in categories outside of core protein powders, especially in activewear, vitamins,
and bars and snacks alongside the offline market.
Adjusted EBITDA margin of 6.0% (2023: 13.5%) was principally as a result of the challenging sales performance, heavily influenced
by the record high input whey prices, persistent weakness of the Japanese Yen and increased promotional activity to clear old
brand stock following the rebrand. The strategy continues to evolve with continued growth in our offline business comprising
manufacturing, retail and licensing, enabled by the rebrand.
Central costs
Central costs relate primarily to the PLC Board remuneration, insurance, professional services fees, Group finance, M&A and
governance costs that are not recharged to the businesses as they principally relate to the operations of the PLC holding
company. The costs remained largely consistent with FY 2023.
Geographical review of revenue
The following table provides an analysis of revenue by region (by customer location):
2024
£’000
2023
£’000
Movement
UK
795.1
773.1
+2.8%
USA
336.6
306.3
+9.9%
Europe
357.9
377.0
-5.1%
Rest of the world
198.7
274.8
-27.7%
Post-demerger revenue
1,688.3
1,731.2
The UK continues to be the largest market for the Group with 47.1% (2023: 44.7%) of revenue generated within the UK. The UK
is the biggest market for the Group in both THG Beauty and THG Nutrition.
Strategic Report
Chief Financial Officer’s Review continued
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Financial Statements
Additional Information
Group financial review continued
Adjusted profit measures with reconciliation to statutory result
Management have presented alternative performance measures to provide stakeholders with additional helpful information on
the performance of the business. These alternative performance measures are consistent with how the business performance is
monitored and reported through internal Management reporting to the Board. To ensure that stakeholders can reconcile this to
the statutory information presented, the below table has been included:
Year ended 31 December 2024
Management
adjusted view
£m
Adjusted
items
£m
Amortisation
and
depreciation
£m
Discontinued
categories
£m
Share based
payments
£m
Statutory
£m
Revenue
1,688.3
—
—
63.1
—
1,751.4
Cost of sales
(983.4)
(33.6)
(0.4)
(40.4)
—
(1,057.8)
Gross profit
704.9
(33.6)
(0.4)
22.7
—
693.6
Distribution costs
(216.9)
(1.3)
(0.2)
(12.6)
—
(231.0)
Administrative costs
(395.8)
(89.6)
(89.6)
(18.9)
(16.6)
(610.5)
Operating profit/(loss)
92.2
(124.5)
(90.2)
(8.8)
(16.6)
(147.9)
Year ended 31 December 2023
Management
adjusted view
£m
Adjusted
items
£m
Amortisation
and
depreciation
£m
Discontinued
categories
£m
Share based
payments
£m
Statutory
£m
Revenue
1,731.3
—
—
148.6
—
1,879.9
Cost of sales
(975.9)
(15.3)
(0.5)
(90.8)
—
(1,082.5)
Gross profit
755.4
(15.3)
(0.5)
57.8
—
797.4
Distribution costs
(246.7)
(2.2)
(0.2)
(28.2)
—
(277.3)
Administrative costs
(397.3)
(14.2)
(93.3)
(37.9)
(16.7)
(559.4)
Operating profit/(loss)
111.3
(31.6)
(94.0)
(8.2)
(16.7)
(39.2)
Revenue
Group statutory continuing revenue decreased by -6.8% to £1,751.4m (2023: £1,879.9m). This performance reflects the decrease in
THG Nutrition revenue of -11.9%, offset by a +3.3% increase in THG Beauty revenue plus discontinued categories. Detailed analysis
is included earlier in this report.
Gross profit
Adjusted gross profit was £704.9m (2023: £755.4m) equating to an adjusted margin of 41.8% (2023: 43.6%), a reduction of 190bps
compared to 2023.
The reduction YoY has been driven by the decrease in the THG Nutrition margin, largely discounting to clear old stock following
the rebrand rollout. Within THG Nutrition, the challenging top-line performance was compounded by higher YoY input costs, primarily
whey. The Japanese yen has been particularly challenging in 2024, peaking at 207Y/£ vs c.181Y/£ at the same point last year, and 135Y/£
at IPO (a c.47% devaluation since IPO in September 2020). This has all but eliminated profitability in Myprotein’s second largest market
and we have had to reduce promotional activity as a result, impacting Myprotein’s competitiveness within the region.
Gross profit has strengthened in THG Beauty through online retail sales growth (principally Lookfantastic, Cult Beauty and Dermstore) as
previous actions to prioritise higher-margin sales and promotional strategies have come to fruition.
Gross profit on a statutory basis totalled £693.6m (2023: £797.4m) delivering a decreased margin of 39.6% (2023: 42.4%). In addition
to the above, the statutory position was also impacted by the increase in adjusted items, the loss on disposal of luxury websites, an
outcome of the strategic review and inventory provisions post rebrand.
Distribution costs
Pleasingly, adjusted distribution costs of £216.9m (2023: £246.7m) equate to 12.8% (2023: 14.2%) of revenue. This significant
improvement of 140bps is a result of the exit of those operations that generated lower profits, which were generally those sales to
territories further from our distribution network (which consequently had a higher distribution cost). Distribution costs also benefited
from improving AOVs in THG Beauty as well as a higher beauty mix, with THG Beauty distribution costs are lower than THG Nutrition
as a percentage of sales.
Distribution costs on a statutory basis further reduced as a percentage of sales by 160bps compared to 2023, culminating in a cost
of £231.0m (2023: £277.3m), being 13.2% (2023: 14.8%) of revenue aided by lower adjusted items than in the prior year.
Administration costs
Adjusted administrative costs as a percentage of revenue totalled 23.4% of revenue (2023: 22.9%). During H2 2024, the Group
focused on cost rationalisation to right-size the cost base of the business post demerger; this resulted in reductions across
administrative costs where the benefit will annualise in FY 2025, albeit these will be offset by the national insurance and national
minimum wage changes outlined by the government in the autumn of 2024. Following the exit of the discontinued categories, further
cost reductions have also been implemented. While administrative costs reduced on an absolute basis, driven by cost savings which
more than offset inflationary pressures, the percentage to sales increased YoY, owing to the challenging top-line sales performance in
THG Nutrition.
Administrative costs on a statutory basis totalled £610.5m (2023: £559.4m), increasing due to the increase in adjusted items as
explained later in this report.
Adjusted EBITDA and Adjusted EBITDA margin
Reconciliation from operating loss to Adjusted EBITDA
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Operating loss
(147.9)
(39.2)
Adjustments for:
Amortisation
19.9
21.0
Amortisation of acquired intangibles
45.5
49.0
Depreciation
24.8
24.1
Adjusted items – cash
24.6
10.4
Adjusted items – non-cash
42.4
21.2
Adjusted items – non-cash impairment
57.5
—
Share-based payments
16.6
16.7
EBITDA from discontinued categories
8.7
8.2
Adjusted EBITDA (post-demerger)
92.1
111.4
Adjusted EBITDA (post-demerger) %
5.5%
6.4%
EBITDA from discontinued operations (THG Ingenuity)
31.0
11.0
Adjusted EBITDA (pre-demerger)
123.1
122.3
Adjusted EBITDA (pre-demerger) %
6.5%
6.4%
Depreciation and amortisation
Statutory depreciation and amortisation costs were £24.8m and £65.4m respectively (2023: £24.1m and £70.0m). Included within
amortisation is £45.5m (2023: £49.0m) of amortisation on acquired intangibles (see below).
Depreciation remained largely consistent, reflective of the current asset base.
Amortisation on acquired intangibles £45.5m (2023: £49.0m)
When an acquisition is made, the accounting standards (IFRS 3: Business Combinations) require that an exercise is undertaken to
value any brands, trade names or other intellectual property (such as customer lists). Following recognition of these assets, they are
amortised over a period of 2-20 years.
Given the number of significant acquisitions made in recent years, primarily within THG Beauty, we consider this amount should be
viewed separately to other amortisation totalling £19.9m (2023: £21.0m) to ensure comparability to those who undertook fewer or no
acquisitions. This is a non-cash cost.
Other amortisation, outside of amortisation on acquired intangibles remained largely consistent YoY.
Operating profit/(loss)
Adjusted operating profit totals £92.2m (2023: £111.3m). The reduction YoY is a result of the above-mentioned factors. The actions
taken to exit loss-making categories and territories and an anticipated improvement in consumer spending are expected to increase
the operating profit position in the medium term, alongside an improvement in the THG Nutrition D2C sales performance.
The Group incurred an operating loss in the year of £147.9m (2023: £39.2m). This is primarily driven by adjusted items increasing by
£92.9m in FY 2024, being the one-off costs associated with losses on disposal of discontinued categories including impairment of
associated assets, onerous contracts and costs related to the completion of the Myprotein rebrand which will not recur.
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Governance
Financial Statements
Additional Information
Group financial review continued
Finance costs net of finance income
Finance costs net of finance income have remained stable at £54.5m (2023: £53.0m) driven principally by higher interest rates, which
have been caused by the higher interest rate environment. Were it not for the comprehensive hedging programme in place, this increase
would have been more material. The inherent cost increase is offset by a reduction in interest expense following the partial repayment of
bank borrowings in H2 2023.
Loss before tax and tax rate
Reported loss before tax was £202.4m (2023: £92.3m). The effective tax rate is -0.9% (2023: 1.4%), based on a total tax credit of £21.9m
(2023: tax charge £15.7m). The effective tax rate differs from the average statutory rate of 25.0% (2023: 23.5%). This is primarily due
to amounts not recognised and a write down of previously recognised deferred tax assets. These items have both arisen as part of the
demerger and reflect the split between continuing and discontinued operations leading to a change in profile for tax losses and deferred
tax recognition. More information is included within note 9 to the financial statements.
Earnings per share
Loss per share on continuing operations was £(0.13) per share (2023: £(0.08) per share).
Statutory cash flow statement
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Pre-demerger Adjusted EBITDA
123.1
122.3
Adjusted EBITDA – discontinued categories
(8.7)
(8.2)
Working capital movements
22.0
48.2
Tax paid
(0.6)
(5.4)
Adjusted items
(39.3)
(15.0)
Net cash generated from operating activities
96.5
141.8
Purchase of property, plant and equipment
(31.7)
(46.3)
Purchase of intangible assets
(69.6)
(79.4)
Proceeds from sale of non-core freehold assets
—
55.5
Finance costs and lease repayments
(83.2)
(84.0)
Free cash flow
(88.0)
(12.4)
Acquisition of subsidiaries net of cash acquired
—
(20.3)
Repayments of bank borrowings
(23.8)
(25.0)
Share placing, net of directly attributable costs
93.3
—
Net decrease in cash and cash equivalents
(18.6)
(57.6)
Cash and cash equivalents at the beginning of the year
416.2
473.8
Cash held for distribution (THG Ingenuity)
(89.0)
—
Cash and cash equivalents at the end of the year
308.6
416.2
Free cash flow for the total Group was an outflow of £88.0m (2023: outflow of £12.4m). This includes £101.3m (2023: £125.7m) of
capital expenditure, cash adjusting item payments of £39.3m (2023: £15.0m) and finance costs and lease repayments totalling
£83.2m (2023: £84.0m).
There was a decrease in cash and cash equivalents for the year of £18.6m (2023: £57.6m) driven by the above cash outflows
which were partially offset by the equity raise which completed in October 2024 raising proceeds net of costs of £93.3m (£89.0m
of cash left the Group with THG Ingenuity). The Group ended the period with c.£550m cash and available facilities at the end
of the year, ahead of demerger, being cash and cash equivalents of £397.6m (including £89.0m within THG Ingenuity) (2023:
£416.2m) and the undrawn RCF totalling £150m.
There has been a reduction in the cash spend of £24.4m on capital expenditure in 2024, consistent with the large scale
investment projects completing in the year. Finance costs and lease repayments remained consistent YoY.
Cash flows in respect of adjusting items largely relate to the demerger and onerous contracts which are not expected to recur.
Repayments of the Term Loan A facility in the year totalled £23.8m (2023: £25.0m). Loans and other borrowings at 2024 were
£604.6m (2023: £650.0m). Details of the post year end refinancing are included on the following page.
Post-demerger cash flow – for illustrative purposes
The table below details the cash flows for the year for THG Beauty and THG Nutrition only to show the cash flows for the Group
excluding THG Ingenuity; this has been prepared consistently with the information published in the circular previously released to
the market.
2024
£m
2023
£m
Post-demerger Adjusted EBITDA
92.1
111.3
Adjusted EBITDA – discontinued categories
(8.7)
(8.2)
Working capital movements
17.9
75.3
Tax paid
(1.3)
(5.1)
Adjusted items
(21.2)
(11.3)
Net cash generated from operating activities
78.8
162.0
Purchase of property, plant and equipment
(7.5)
(12.5)
Purchase of intangible assets
(13.6)
(20.9)
Proceeds from sale of non-core freehold assets
—
8.5
Finance costs and lease repayments1
(57.4)
(56.9)
Free cash flow2
0.4
80.2
Acquisition of subsidiaries net of cash acquired
—
(16.4)
Repayments of bank borrowings
(23.8)
(25.0)
Share placing, net of directly attributable costs
93.3
—
Net increase in cash and cash equivalents
79.8
38.8
1. Lease repayments include expected outflows for subleases entered into on 2 January 2025. This is a per annum cash cost of c.£10m.
2. Free cash flow is defined as cash flow before the impact of acquisitions, bank borrowings and share placings.
On a post-demerger basis, free cash flow is neutral with an inflow of £0.4m (2023: inflow of £80.2m) and a net increase in cash
and cash equivalents of £79.8m (2023: £38.8m). Excluding one-off cash adjusted items, a cash inflow of £21.6m would have been
generated.
In the prior year there was a one-off working capital inflow of £75.3m as inventory levels normalised. In FY 2024, the inflow of
£17.9m was lower than anticipated due to a delay in a VAT payment of over £20m received in January 2025.
The post-demerger cash flows differ to the pre-demerger basis as a result of reduced capital expenditure totalling £21.1m (2023:
£33.4m), lower cash adjusting items to exclude those relating to THG Ingenuity and lower finance costs and lease repayments
given many of the Group’s leases relate to THG Ingenuity.
Repayments of bank borrowings and share placing proceeds remain the same on a pre and post-demerger basis.
Adjusted items
In order to understand the underlying performance of the Group, certain costs included within cost of sales, distribution,
administrative and finance costs have been classified as adjusted items.
The largest category of costs included within adjusted items are those relating to loss on discontinued categories of £24.7m
(2023: £10.5m) along with the impairment of its associated brands and other intangibles of £57.5m (2023: £nil) as the Group
progressed its strategic review of loss-making non-core brands and product offerings.
For full details on each category of adjusted item see note 4 to the financial statements.
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Governance
Financial Statements
Additional Information
Balance sheet
Cash and cash equivalents and net cash before lease liabilities
2024
£m
2023
£m
Loans and other borrowings
(604.6)
(650.0)
Lease liabilities1
(41.4)
(345.0)
Cash and cash equivalents
308.6
416.2
Sub-total
(337.3)
(578.9)
Adjustments:
Retranslate debt balance at swap rate where hedged by foreign exchange derivatives
(8.3)
15.7
Net debt
(345.6)
(563.2)
Net debt before lease liabilities – post demerger
(304.3)
n/a
Net debt before lease liabilities – pre demerger2
(215.3)
(218.2)
1. Following completion of the demerger, subleases were entered into by THG PLC generating c.£80m of new lease liabilities, therefore we expect the lease
liabilities of THG PLC to increase in FY 2025 reflecting the subleases.
2. Being the net debt less lease liabilities – post demerger of £304.3m plus the £89.0m of cash that was included within the held for distribution group.
At 31 December 2024, the Group held £397.6m in cash and cash equivalents (2023: £416.2m) split between cash of £308.6m
within the post-demerger Group and £89.0m included within the held for distribution group (within THG Ingenuity and which left
the Group following the demerger).
At the year end, the Group held a €600m Term Loan B due to mature in December 2026 and a £109m Term Loan A facility
maturing in Q4 2025. The undrawn RCF totalled £150m.
Post year end, on 4 April 2025, the Group announced the completion of its debt refinancing to 2029. As part of a plan to delever,
the refinancing reduced the Term Loan B from €600m to €445m with maturity extended by three years to December 2029. The
Term Loan A was partially repaid with a final stub of £35m maturing in Q4 2025. The undrawn RCF totals £150m. The reduction
in facilities was partially funded by an equity raise on 28 March 2025, with gross proceeds of £95.4m. The demerger of THG
Ingenuity will materially reduce the cash outflows of THG PLC with substantial reductions in lease commitments (of c. £20m cash
saving per annum) and capex requirements, which in turn means that the Group requires smaller banking facilities.
Net debt before lease liabilities on a pre-demerger basis was consistent year on year at £215.3m (2023: £218.2m). The small
decrease is driven by net impact of the equity placing less cash spent on repayment of borrowings, lease repayments, finance
costs and cash adjusting items.
Non-current assets
Property, plant and equipment totalled £64.9m (2023: £273.2m) with £177.0m being held for distribution to THG Ingenuity.
Intangible assets totalled £958.3m (2023: £1,207.4m) with £149.5m being held for distribution. Decreases in the year are driven
by the depreciation and amortisation charge (see earlier). Following the demerger, the capital expenditure is expected to reduce
significantly given the previous additional costs were primarily in respect of the platform which belongs to THG Ingenuity.
Damian Sanders
Executive Director and
Chief Financial Officer
28 April 2025
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Chief Financial Officer’s Review continued
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Governance
Financial Statements
Additional Information
34
THG PLC Annual Report and Accounts 2024
Stakeholders
Shareholders
Suppliers
Customers and
Consumers
Society and
Communities
Our People
Partners
With a focus on providing a high-quality
retail experience and promoting trust, we
continue to make progress in how we
directly engage with our consumers and
our customers. Engagement has taken
place through a variety of channels,
including social listening, social media
activity, a review of customer and
consumer insights analysed by Senior
Management and further development of
our Beauty loyalty programme, alongside
tactile retail experiences.
Regular Senior Management updates
are designed to ensure that strategic
priorities are focused on better
understanding the wants and needs of
customers and consumers, and that we
are well positioned to execute on these.
Outcomes from engagement
– An enhancement for the customer
through the development of the
delivery experience leading to record
low contact rates.
– Allowing THG brands to connect more
effectively with customers and provide
a competitive advantage against their
respective competitors.
– 4.4 ‘Excellent’ average rating across
THG Ingenuity managed Trustpilot
reviews.
– Greater accuracy in order and
quicker delivery times in addition to
proactive customer communications,
reducing the requirement for
post‑order support.
Section 172 Statement:
Stakeholder Engagement
Section 172 of the Companies Act requires that our Directors
act in a way which they consider, in good faith, will be
most likely to promote the success of the Company for the
benefit of its Shareholders as a whole, having regard to the
prescribed stakeholder considerations.
Our vision is to be the global online leader in beauty and
sports nutrition, and we have identified six stakeholder
groups that are vital to achieving this objective. Active
engagement between the Board and these stakeholder
groups is underpinned by our values and purpose. It is
therefore critical to ensure that Board decision-making
is appropriately informed by the relevant section 172
stakeholder considerations. Such engagement will, in turn,
support the successful delivery of the Group’s strategic
priorities and thus promotes sustainable value creation.
In addition to the engagement outcomes summarised in this
statement, the table which follows details other areas of this
Annual Report which contain section 172 related information.
Customers and Consumers
How THG engages
How the Board engages
– Through its brands via social media
– Physical shopping experience through the Lookfantastic
flagship store and various pop-ups
– Creating global digital content including Lookfantastic’s ‘What
the SPF?’ campaign and Myprotein HYROX event engagement
– Customer and consumer insights provided to and analysed by
Senior Management
– Continued expansion of loyalty programmes across THG Beauty
– Award-winning customer contact centre and customer
advisory teams
– Industry-leading service to our customers through extended
1am next-day delivery
Indirect
– Monthly updates from Senior Management on strategic
priorities, including brand partnerships and new product
development with a focus on meeting the ever-changing
needs of customers and consumers
– Monthly review by COO of operational performance to
consistently deliver and improve the customer experience
– Board presentations from Senior Management on customer
satisfaction scores, brand perceptions and process
improvements
– Monthly updates from the Chief Technology Officer on key
cyber‑security enhancements and regulatory compliance
Section 172 consideration
Further information can be found on
(a) The likely consequences of any decisions in the long term
Principal risks – page 75
(b) Interests of employees
Our people – page 44
(c) Fostering business relationships with suppliers, customers and others
Our strategy – page 10
(d) Impact of operations on the community and environment
Sustainability – page 46
(e) Maintaining a reputation for high standards of business conduct
Supply chain standards – page 55
(f) Acting fairly between Shareholders
Chair’s introduction – page 4
Market-leading 1am next-day delivery
According to data from THG Fulfil,
more than 82% of all next-day delivery
orders are placed after 2pm and more
than a quarter are placed after 10pm,
offering a clear incentive for both
customers and retailers to extend
next-day delivery order periods as
late as possible. We leveraged the
operational capacity of THG Ingenuity’s
UK fulfilment network and control of
the delivery experience to offer greater
flexibility for customers.
The development of the delivery
experience has enhanced the
customer journey, enabling THG
brands to connect more effectively
with their customers and gain a
competitive edge.
This improvement has driven a 7%
increase in orders placed between
10pm and 1am, alongside an 8% rise in
customers choosing next-day delivery
during the same period.
The Board gained valuable insights
into evolving customer behaviour and
spending habits by reviewing Senior
Management response strategies.
By engaging with the Chief Operating
Officer and Chief Technology Officer,
the Board was able to monitor the
rollout of the extended 1am cut-off,
impact on relationships with couriers,
and customer retention and acquisition.
Strategic Report
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Governance
Financial Statements
Additional Information
Suppliers
How THG engages
How the Board engages
– Annual anti-bribery training undertaken by procurement function
– Risk assessment undertaken for all suppliers and processes in
place for reviewing and enhancing audit for higher-risk suppliers
– Strategic suppliers identified and engaged on carbon
reduction matters
– Risk assessments undertaken for all suppliers for reviewing
CSR alignment
– We operate under the THG Supply Chain Standards applicable
to all supplier relationships
Indirect
– Regular review of key raw material prices and buying strategy
– Site visits undertaken by Risk Committee Chair on an ad hoc
basis as and when considered appropriate
– Members of the Executive Leadership Team available to meet
major suppliers
– Regular review of supplier payments metrics
Partners
How THG engages
How the Board engages
– Quarterly business reviews with partners to assess sales
pipeline, new product development and joint marketing strategy
– Strategic partners identified and engaged on carbon
reduction matters
– Due diligence undertaken on all potential partners to ensure
alignment with brand strategy
Indirect
– Members of the Executive Leadership Team available to meet
major partners
– Regular review of partnership revenue and
performance metrics
– Regular review of partnership and licensing commercial
arrangements
As a global business, it is essential
that we hold ourselves to the highest
ethical standards when dealing with
our suppliers to ensure business is
conducted with complete integrity and
in a manner which ensures compliance
with all applicable laws and regulations.
The Board is dedicated to building
supplier relationships that support our
brands while addressing societal and
environmental challenges, following the
THG Group’s Supplier Manual to ensure
high standards of business conduct.
We strive to build productive, fair and
lasting partnerships with suppliers,
ensuring long-term value creation for
Shareholders while respecting suppliers’
business needs.
Shareholders
How THG engages
How the Board engages
– Annual Report and Accounts
– RNS announcements
– Shareholder notices and circulars, including re: demerger of
THG Ingenuity
– Scheduled investor presentations and conference calls
– Corporate website
– Head office and site tours
– One-to-one and group investor meetings on site and attendance
at investor conferences
– Regular engagement through meetings with analysts and
across THG’s coverage base
Direct
– General meetings, including the Company’s annual
general meeting
– The CEO and CFO have an ongoing programme of meeting
institutional Shareholders, supported by Senior Management
– The Chair and SID are available to meet Shareholders
upon request
– The CEO and CFO host webcasts following trading statements
and other significant/business strategic updates to the market
Indirect
– The Board reviews and approves material market
communications, such as the Annual Report and Accounts and
trading and other updates
– The Board reviews media coverage and investor feedback
provided by THG’s advisers
Active engagement with our Shareholders
ensures they are aware of the Group’s
financial and strategic priorities,
performance, market environment and
sustainability commitments. The views
of our Shareholders are considered
extensively and support in informing the
strategic decision-making of the Board.
Regular dialogue took place with the
investment community during 2024,
in particular around the release of the
Group’s preliminary and interim results
and following the announcement of the
proposal to demerge THG Ingenuity from
the Group.
The Company has communicated in a
variety of ways including virtual roadshows
and in-person meetings and we have the
opportunity to share a detailed overview
of financial performance and progress
against strategic objectives within our
Annual Report and Accounts. As a publicly
listed company, our purpose, vision,
values and strategy are directed towards
the objective of creating long-term and
sustainable value for our Shareholders.
Outcomes from engagement
– Received Shareholder approval for the
demerger of THG Ingenuity following
extensive consultation.
– Enhanced Shareholder perception by
effectively communicating the Group’s
strategy and addressing concerns
if raised.
– Kept Shareholders informed through
financial and strategic RNS updates,
and direct engagement.
– Analysts and investors have the
opportunity to provide feedback on
trading performance and strategic
direction through interactions during
each financial year.
As our strategic direction evolves,
partnerships have become a key
driver in strengthening customer
connections and fostering mutually
beneficial relationships through product
development and brand synergies.
In 2024, THG Nutrition, through
Myprotein, entered into a number of
high‑profile strategic partnerships,
including product collaborations
with Müller, Jimmy’s Iced Coffee and
Kirsty’s Food, alongside growing brand
partnerships with Marvel and HYROX.
We ensure that all partnerships align
with our strategic objectives and values,
fostering brand synergies that benefit both
parties while preserving Myprotein’s brand
image and reputation. Once partnerships
are established, quarterly reviews are
conducted to evaluate performance and
joint marketing efforts. This process informs
decisions on extending agreements and
refining collaboration strategies.
Outcomes from engagement
– Partnerships enhance our ability to
engage with customers through product
and brand collaborations.
– Ensuring partner brands align with our
values helps maintain Myprotein’s brand
image and reputation.
We engage through a number of ways
to ensure professional integrity when
working with external suppliers. This
includes risk assessments for all
suppliers and a process for reviewing
and enhancing audits for higher-risk
suppliers. We aim to listen to feedback
from suppliers to understand their
challenges and to seek to continuously
improve relationships. We have
implemented appropriate internal
controls to ensure that suppliers abide by
our Ethical Code of Conduct and operate
with integrity. These controls ensure that
a professional relationship is maintained
between each party and allows us to
work effectively to deliver value to our
customers.
THG Ingenuity is a key third party
supplier of the Group across a number
of services with multiple levels of
stakeholder interaction to ensure the
relationship remains commercially sound
and productive (more information in
principal risks).
Outcomes from engagement
– Improvements to stakeholder
engagement and relations.
– Increased transparency in
procurement decisions, including in
contractual terms, sustainability claims
and onboarding.
– Improved supplier on-time payment
performance.
– Significant cost savings per unit and
maintenance of delivery standards
throughout peak trading periods.
– Quarterly reviews assess marketing
efforts, partnership performance and
inform future collaboration decisions.
– The Board indirectly engages with
partners through meetings, revenue
reviews and agreement assessments
to ensure sustainable and profitable
partnerships.
Müller, Europe’s largest dairy brand,
is renowned for its diverse product
range, including yogurts, milk drinks,
butter and plant-based options and
through extensive market analysis they
recognised the global megatrends
towards health. In response to these
findings, Müller joined forces with
Myprotein through a long-term
partnership spanning across the UK
and Europe.
With Myprotein’s expertise in sports
nutrition, the new range has been
carefully crafted to meet the needs of
an active lifestyle.
The partnership aims to introduce
delicious options into the high-protein
category and provide additional touch
points for Myprotein customers,
with products stocked across major
UK supermarkets and convenience
channels.
With the potted protein segment
growing at four times the rate of the
overall segment, this collaboration is
set to tap into the high growth potential
and bring a unique solution to new and
existing Myprotein customers. Senior
Management engage with partners
on an ongoing basis through regular
communication and review of joint
activities including marketing spend and
reviewing NPD. The Board continues to
monitor the performance of the Müller
partnership on a regular basis.
Müller partnership
Strategic Report
Section 172 Statement: Stakeholder Engagement continued
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Strategic Report
Governance
Financial Statements
Additional Information
We aim to build skills and develop talent
to promote greater social mobility, while
protecting the environments we operate
in and source from. From operating at
a global scale, it is critical that we take
responsibility for the communities we
interact with and must ensure that we
limit our negative impact and use our
scale for good. Throughout 2024 we have
engaged with society and its communities
in a variety of ways, including through:
the Group’s Social Impact Strategy, our
charity partnerships with The Christie
Charity (The Christie NHS Foundation)
and the expansion of our partnership
with TechSheCan and TalentTap to
provide work experience to students from
socio‑economically deprived areas. Each of
these initiatives has helped us to engage
with our communities in a responsible
and meaningful way. In order to support
these engagements, the Board reviews
the progress of the 2030 Sustainability
Strategy and its objectives, and through
discussing ESG matters in Sustainability
Committee meetings.
Outcomes from engagement
– You can read more about the
outcomes from our engagement work
in Society and Communities on the
Sustainability section on page 59.
In 2023 we announced a new
fundraising partnership with The
Christie Charity to support one of
Europe’s leading cancer treatment
centres.
The partnership, a first for THG, forms
part of our Social Impact Strategy,
THG in the Community, which centres
around plans for creating social change
in local communities.
During 2024 employees were
invited to participate in a series of
fundraising events, including the
Manchester Marathon and Dragon
Boat races. We were very proud that
our colleagues raised £55,332.80, and
with THG matching this sum, our total
donation was £110,665.60.
These funds will enable The Christie to
offer wraparound support for patients
and families navigating a cancer
diagnosis, and support the building of
an Advanced Scanning and Imaging
Centre (“ASIC”).
This will be a new scanning facility
to future-proof the service and
provide patients with the very best
care and treatment, including a new
state‑of‑the-art, high-tech 4D CT
scanner.
The Christie has more than 100 years of
expertise in cancer care, research and
education. As one of Europe’s leading
cancer centres, it annually treats over
60,000 patients and handles more
than 100,000 outpatient appointments
from 14 sites across Salford, Oldham,
Macclesfield, Stockport, Bolton, Bury,
Wigan, Tameside, Leighton and New
Mills, as well as in patients’ homes. It
is the largest provider of radiotherapy
in the NHS and is home to the largest
chemotherapy unit in the UK.
Society and Communities
How THG engages
How the Board engages
– Implementation of the Group’s Social Impact Strategy
– Charity partnership with The Christie
– Continuation of strategic partnership with TechSheCan
– Supported TalentTap, providing work experience to students
from social mobility cold spots
– Supported men’s health charity Movember
Indirect
– Quarterly review of progress against the 2030
Sustainability Strategy
– ESG matters discussed in Sustainability Committee meetings
and thereafter updates provided at monthly Board meetings
Our People
How THG engages
How the Board engages
– Development of employee networks with support from dedicated
Executive Sponsors
– Colleague engagement and culture surveys
– Evolution of Learning and Development offering including
introduction of in‑house management programme and
continuation of upskilling programme including the Data Academy
– Regular leadership town hall meetings
– Launch of parents’ network to support working families
– Continuation of partnership with Change 100
Direct
– End-of-year colleague presentation delivered by
Executive Directors
– Annual business strategy updates with Senior Management
Indirect
– Regular reviews of attrition and key recruitment matters by the
Chief People Officer at monthly Board meetings
– Reviewed and approved updated role profiles of
Board Members
We aim to foster a supportive environment
for all our colleagues. We’re incredibly
proud to celebrate a global and diverse
workforce and the unique skills and
qualities that it brings to the table. As
our most valuable asset, we provide our
people with opportunities for personal and
professional development, with a particular
focus on building the skills for tomorrow
and go further, faster.
One way in which we have supported our
people is through the development and
expansion of employee networks (including
the launch of the Women in Business
Network) and the introduction of Executive
Sponsors.
Through the evolution of these
programmes, we have been able stay at
the forefront of digitally skilled workforces
and gain a competitive edge in attracting
and retaining talent.
The Christie Charity partnership
THG also engages its people through:
– Introduction of the Leadership Townhall.
– Expansion of Emerge, Beyond,
Inspire and HoRizons learning and
development programmes.
– Introduction of the workplace
nursery benefit.
– Early careers programmes.
The popularity and subscription rates
of these schemes provide valuable
insight into how our people value these
programmes and the skills they develop.
The success and development of our
Senior Management acts as testament to
our focus on our people and the emphasis
on learning and growth.
Our Senior Management engage on an
ongoing basis through reviewing feedback
from networks and the development of
schemes to refine our offering. By doing
so, we ensure a supportive environment is
maintained while ensuring the skills being
developed meet the changing needs of
the business.
The Board engages in a variety of ways
to drive the success of these initiatives
and ensure that our people have
every opportunity to succeed. Through
end-of‑year colleague presentations,
employees are recognised for their efforts
through equity awards, which also provide
an opportunity for Board members to
engage with staff and gain feedback.
Strategy updates with Senior
Management are undertaken on a regular
basis to allow the Board to engage
and provide feedback and guidance to
the Chief People Officer. Indirectly, the
Board also engages through reviews of
recruitment and attrition matters with the
Chief People Officer.
Outcomes from engagement
– Employees gain access to networks,
training and leadership opportunities.
– Fostering a culture of hard work and
recognition.
– Managers enhance critical skills such
as communication, negotiation and
performance management.
– Sponsorship from senior leaders
provides employees with valuable
networking opportunities and
career insights.
– Recognition programmes and benefits
improve morale and commitment.
– Leadership Townhalls and Executive
Sponsors provide coaching and careers
guidance.
– Monthly reviews on attrition and
recruitment help refine people
strategies.
– The Board’s involvement ensures
alignment with the Group’s strategic
aims and objectives, supporting its
long-term success.
Strategic Report
Section 172 Statement: Stakeholder Engagement continued
View online
Talent
“We are delighted to partner with
The Christie Charity – our first ever
charity of the year. This is a cause that
hits home for many THG employees
and their families. We have a huge
opportunity to help The Christie Charity
raise awareness, and support with
much‑needed funding.”
Matthew Moulding, Chief Executive Officer of
THG, said:
40
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THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Principal
decisions
Below are examples of the key
discussions and principal decisions
taken by the Board during 2024,
alongside relevant strategic priorities
and stakeholders considered.
Demerger of Ingenuity
Stakeholders considered:
Strategic priorities considered:
In September 2024, the Board announced
it was progressing options to demerge
THG Ingenuity. The demerger facilitates the
simplification of THG’s business model as a
global consumer beauty and nutrition group,
with an improved balance sheet, capex and
cash flow profile. Extensive discussions with
Shareholders were undertaken ahead of the
announcement, building upon the previously
communicated Group strategy to provide
each business with its own growth and
capital platform.
In October 2024, it was announced that
THG Ingenuity was to be demerged into
a standalone independent private entity,
facilitated by a fundraise, which was
executed successfully, raising gross
proceeds of £95.4m. The net proceeds
of the fundraise, alongside a debt facility,
are expected to provide THG Ingenuity
with sufficient medium-term funding as
the business approaches positive cash
generation on a standalone basis.
The Directors considered that the proposed
demerger was in the best interest of
Shareholders and the Company as a
whole and the Board was pleased by the
strong support received from both existing
Shareholders and new investors.
Regular communication to the investor
community was undertaken via the RNS and
the Company website to inform Shareholders
of the options made available to them.
Throughout this period, Shareholders were
able to consult with the Senior Management
team on matters pertaining to the demerger.
THG Beauty own brand portfolio
management
Stakeholders considered:
Strategic priorities considered:
In December 2023, THG Beauty acquired
US-based prestige skincare brand
Biossance into its portfolio of owned brands.
During 2024 the brand was successfully
integrated, building upon its strong brand
awareness to reach a wider consumer base.
As part of the ongoing strategic review
of loss-making categories and territories
announced in January 2023, during 2024
we took the decision to withdraw from own
brand cosmetics and masstige products
to focus on the more prominent growth
opportunities in prestige skincare, spa and
specialist products.
This strategy is delivering margin
enhancements from a more focused,
relevant consumer offering.
The Executive Leadership Team considered
the financial impact of the discontinued
categories and updated Company guidance
for its continuing businesses.
Disposal of luxury websites
Stakeholders considered:
Strategic priorities considered:
In June 2024, the Group announced a
multi‑faceted partnership with Frasers
Group plc. This partnership included the sale
of THG Beauty’s portfolio of luxury goods
websites, including www.coggles.com.
The sale completed on 11 September 2024,
with the results presented as discontinued
categories.
From a standing start almost 11 years ago,
THG’s luxury division grew to c.£43m sales
and was broadly break-even for FY 2023,
despite a broader challenging luxury
market. The decision to dispose of the
luxury websites considered the Group’s
financial priorities and its stated intention
to simplify and streamline its operations.
As part of the sale agreement, THG
Ingenuity will continue to support the
brand portfolio across technology, digital
marketing and fulfilment services for a
period post disposal.
Transfer to Equity Shares
(Commercial Companies)
category
Stakeholders considered:
Strategic priorities considered:
In September 2024, the Group announced
its appointment of a Sponsor in order
to facilitate the transfer of its Ordinary
Shares from the Equity Shares (Transition)
category of the Official List maintained
by the Financial Conduct Authority to the
ESCC category.
While no Shareholder approval was
required, the Board consulted extensively
with Shareholders and concluded that it
would be in the best interests of THG and
its Shareholders to effect the transfer.
The Board believes the transfer will:
– enable the Ordinary Shares to be
considered for inclusion in the FTSE
UK Index Series, which is expected to
improve passive investment flows and
liquidity;
– support the execution of the Group’s
strategy, through raising its visibility;
– afford increased protection for investors
under the UKLRs as a result of the
higher standards placed on companies
admitted to the ESCC category,
including in relation to significant
transactions and Related Party
Transactions; and
– benefit its Shareholders by making
THG’s previously voluntary adherence
to certain ESCC category standards of
corporate governance, and regulatory
and reporting compliance, compulsory.
The Group confirmed the transfer
was effective in January 2025 and
subsequently entered the FTSE 250 index
in March 2025.
Strategic Report
The table below sets out where stakeholders can find information relating to the non‑financial matters as required under the
Non‑Financial Reporting Directive:
Reporting
requirements
Our approach
Relevant policies
and statements
Where to read more
Environmental
matters
Page 78
THG is committed to doing business responsibly
and reducing any adverse impacts of our
operations on the environment. Our Environmental
Policy was implemented as part of our THG
Sustainability Strategy (THG x Planet Earth) to drive
positive change in our business, supply chains,
communities and for the planet.
– Environmental
Sustainability Policy
– Sustainability Committee Report
– TCFD disclosures
– Principal Risks – Climate
Change, Environmental and
Social Responsibility, Legal and
Regulatory Compliance
Employees
Page 59
THG strongly believes that having a diverse
workforce and an inclusive workplace creates a
more innovative and successful business. This
commitment to diversity and inclusion is a key part
of our strategy and reflects our ongoing dedication
to equal opportunity.
– Diversity & Inclusion
Policy
– HR Handbook
including all
people‑related policies
– People and diversity – Chair’s
Introduction
– ‘Our Strategy’ and ‘Our People’
– Section 172 Statement
– Diversity – Nomination
Committee Report
– Principal Risks – Talent, Culture,
Health & Safety
Human rights
Page 56
THG has a zero-tolerance approach to modern
slavery, and we are committed to acting ethically
and with integrity in all our business dealings and
working relationships.
– Modern Slavery
Statement
– Supply Chain Standards
– Health and Safety Policy
– Whistleblowing Policy
– HR Handbook
– Section 172 Statement
– Strengthening our supply chain
and circularity
– Principal Risks – Climate
Change, Environmental and
Social Responsibility, Culture,
Health & Safety, Product Quality
and Safety
Social matters
Page 59
We invest our time and energy into the people and
communities who need our help the most.
– HR Handbook
– Environmental
Sustainability Policy
– Social Impact
Strategy – THG in the
Community
– Section 172 Statement
– ‘Our People’
– ‘Empowering people and
communities’ – Sustainability
– Principal Risks – Climate
Change, Environmental and
Social Responsibility
Anti-bribery
and corruption
Page 56
THG is committed to conducting its business with
complete integrity and in a manner which ensures
compliance with all applicable laws and with
the highest ethical standards. As a company, we
use our best endeavours to ensure that all those
acting on our behalf, whether they are employees,
contractors, third-party intermediaries or agents,
are aware of and share our commitment to
conducting business ethically.
– Anti-Bribery Policy
– Gifts and Hospitality
Policy
– Principal Risks – Culture
– For our business model – see page 8
– For Sustainability and TCFD – see pages 46 to 71
– For Principal risks and uncertainties – see page 75
A review of each of the above policies is considered on an annual basis and updates made where appropriate.
An integrated training and policy platform continues to be maintained, which facilitates the rollout of policies to appropriate audiences. This platform allows subsequent
monitoring of completion rates for the reading and acceptance of these policies at an individual level, promoting awareness and conformance to our policies.
Non-Financial and Sustainability
Information Statement
Section 172 Statement: Stakeholder Engagement continued
Link to strategic priorities key:
Build leadership positions in core territories and categories
Deliver innovative and relevant products to global consumers
Develop Active Customer base and drive loyalty
Enhance brand equity through D2C channels
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THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
In 2024, we continued to streamline and
automate our global people processes to enhance
the employee experience and establish strong,
consistent foundations across the Group.
Operational excellence
In anticipation of the upcoming
changes in UK employment law, we
have consulted externally and begun
training and briefing our People teams
on what to expect and how we will
manage regulatory changes when they
come into force. We rolled out proactive
sexual harassment training, conducted
risk assessments, and updated our
Bullying, Harassment and Discrimination
Policy in line with legislative changes
implemented in autumn 2024.
Following the launch of our Parenthood
Programme in 2023 which offers up
to six months’ full pay for parents and
paid time off for fertility treatments,
we introduced the Workplace Nursery
scheme, a new benefit for our UK
colleagues to help colleagues save on
their monthly childcare bills.
We were also incredibly pleased to be
shortlisted in the Best Place to Work
category in the Drapers awards. This is a
testament to the enhancements we have
made to our Employee Value Proposition
over the past two years.
Career development
We pride ourselves on creating
career‑defining opportunities for
ambitious talent in a meritocratic way,
and our Learning & Development offering
is vital to this, with our people front
and centre. It’s ‘learning owned by you,
supported by your manager, and backed
by THG’.
In 2024, we delivered a variety of
sessions to thousands of colleagues.
From leadership programmes and
e-learning modules to technical
sessions and professional skills, we
have confidently uplifted the capability
of our people.
Three initiatives stand out as having
considerable impact:
1. Beyond programme: 45 leaders
completed the five-month Beyond
programme. These managers now
have better strategies to effectively
lead their teams and the tools to build
stronger relationships, resulting in
higher performance.
2. Interviewing the THG Way: 300
managers attended this training.
We focused on improving our hiring
managers’ skill sets to secure the right
talent through effective questioning
based on divisional needs and our
core values.
3. Building Impactful Teams: 40
teams attended this workshop, which
explored how understanding each
other as individuals results in better
collaboration, culture and output.
In 2025 we are launching a
comprehensive job architecture
framework to provide clear pathways
for progression and help colleagues
understand and achieve their
career goals.
Culture and engagement
We introduced an employee voice
platform to track sentiment across the
business and quantify the employee
experience. This tool will enable us to
make data-driven decisions that reflect
the needs and perspectives of our
people, creating a thriving, productive
and positive work environment.
To foster a connected, informed and
empowered leadership population, we
launched the Leadership Townhall. This
is a quarterly forum for leaders across
all business units to discuss strategic
priorities, hear the latest business news,
and share their ideas and feedback.
Recognising the role that managers play
in employee engagement, development
and retention, we introduced Manager
Toolkits, a monthly resource to provide
targeted support to help managers
effectively lead their teams, navigate the
complexities of their role and understand
and relay key business updates.
In collaboration with our in-house GP,
we organised a series of talks and events
on health topics such as mental health,
men’s health and menopause to educate
and inform our colleagues on things that
could impact their wellbeing. All these
initiatives highlight our commitment
to creating a workplace where every
colleague feels valued, heard and
empowered to contribute to the Group’s
success.
Strategic Report
Our people
Mission: “To value every
voice and celebrate unity.
Through collaboration, cultural
exchange and shared purpose,
we foster belonging, innovation
and a commitment to diversity
at THG.”
Mission: “To create a safe
space for all employees,
neurodivergent and
neurotypical, to learn, share
and join a community.”
Mission: “To support
colleagues with disabilities
by removing barriers, raising
awareness and making
accessibility inclusion integral
to all we do.”
Mission: “To create an
inclusive and empowering
community where women from
all backgrounds come together
to thrive.”
Mission: “To create a
supportive and inclusive
environment for all parents
and carers at THG.”
Mission: “To educate those
outside the LGBTQIA+
community on important
topics and issues, promoting
understanding and
acceptance.”
Black Community Network
Neurodivergent Network
Accessibility Champions
Network
Women in Business
& Women in Tech
Parents Network
Pride Collective
Equity, Diversity & Inclusion
THG was built on the belief that anything is possible, and we want our people to believe that too. That’s why we’re breaking down
the barriers that stop our people, customers and communities from achieving their full potential. To learn more about our progress,
visit page 59.
Employee and Board diversity information as at 31 December 2024 was as follows:
2024 Gender
Male
Female
Not
disclosed
Total
Board
6
3
0
9
Senior leadership
10
4
0
14
Other
3,337
3,376
55
6,768
Total
3,353
3,383
55
6,791
2024 Ethnicity
BAME
Non
BAME
Not
disclosed
Total
Board
0
9
0
9
Senior leadership
3
11
0
14
Other
1,157
2,421
3,190
6,768
Total
1160
2,441
3,190
6,791
Our employee networks
We continued to invest in and support our employee networks, each of them guided by an Executive Sponsor to amplify the voices
of underrepresented groups across the business.
View online
THG Stories: Robin
Barayuga
View online
Sharon’s blog post,
Feel the Fear and
Do It Anyway
View online
Finding the Balance:
Career and Parenthood
View online
Breaking Taboos:
Beck’s Journey with
Ulcerative Colitis
View online
THG Stories:
Neha Sawant
View online
2024 Pride Panel
with Ryan Atkin
44
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THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
Our 2024 report
In 2024 we made continued progress against our THG x Planet
Earth strategy across all three pillars and were proud to
be recognised within Sustainability Magazine’s Top 250
companies across the globe.
We are ahead of our trajectory for our Scope 1 and 2
associated net zero targets, which is, in the main, a result of a
26% increase in renewable purchased electricity. In addition,
THG’s award for the Supply Chain Initiative of the Year for our
THG PACT programme is further evidence of our progress to
reduce emissions. More details on our progress towards our
science-based targets can be found on pages 50 and 51.
Looking into 2025 we will continue to focus on driving
progress against all our sustainability goals and will re-evaluate
our targets to reflect the changes in our business following the
demerger of Ingenuity at the start of the year.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Strategic Report
Key achievements in 2024
Sustainability
THG x Planet Earth is our strategy for a better, sustainable future together. Guided by the
United Nations’ Sustainable Development Goals (“SDGs”), our plan focuses on three key pillars:
Protecting climate and nature, Strengthening our supply chain and circularity, and Empowering
people and communities. We have set ambitious goals and targets under the key priorities, that
we aim to achieve by 2030. We are pledging to use our global scale, our world-class talent and
our dedication to innovation, to act as a force for good.
Protecting climate
and nature
Strengthening our supply
chain and circularity
Empowering people
and communities
Climate
Operate net zero greenhouse gas
emissions across our operations.
Nature
Have a positive impact to biodiversity
and nature ecosystems across our
own brands.
Water
Use water sustainably in high water
impact areas of our value chain.
Responsible supply chain
Protect human rights and work
to eliminate modern slavery in our
supply chain.
Circularity
Transform all of our waste into resources
for our value chain.
Employee wellbeing
and development
Create a workplace culture
which brings out the best in all.
Equity, Diversity and Inclusion
Promote policies and practices that
are inclusive for all at THG.
Investing in our communities
Support our communities and lead
initiatives to teach tech and life skills.
UN SDGs our goals are addressing:
Named one of the Top
250 companies globally
by Sustainability
Magazine
Awarded Supply
Chain Initiative of the
Year, EMEA at the
Environmental Finance:
Sustainable Company
Awards 2024
Ahead of science‑based
target trajectory
for Scope 1 and 2
emissions
Materiality assessment
The field of sustainability is constantly
evolving, with new data and innovations
emerging all the time. Given this rapidly
changing environment, it is important
to assess and understand the potential
challenges and opportunities, as well as
the topics most important to THG and its
stakeholders. To do this we undertake a
materiality assessment to provide insight
into which issues we should focus on,
and where the greatest impacts lie both
from an environmental and societal point
of view as well as financial implications
of sustainability risks and opportunities.
This can then inform business strategies,
such as our 2030 Sustainability Strategy,
THG x Planet Earth. In defining the topics
within the assessment, we engage with
both internal and external stakeholders,
to understand how the most material
issues may affect our business in the
short and long term. We can then monitor
these issues in our day-to-day operations
to manage risks and assess opportunities
for the future. This assessment takes
place every two years and, in 2023, we
undertook a ‘light’ materiality assessment.
THG has acknowledged that the
proposed Omnibus changes removes
our business from the scope of CSRD
reporting for FY25 and based on the
current business metrics will be in scope
FY28 for reporting in 2029 instead. In the
interest of compliance THG will complete
a CSRD aligned Double Materiality
Assessment in 2025, acknowledging
the importance of the legislation and
relevance to our business’s strategy.
1.
Water stewardship
2. Sustainable product
innovation and technology
3. Product transparency
and labelling
4. Living wage
5. Waste
6. Nutritional value
7. Stakeholder engagement
8. Community investment
9. Pollution
10. Health and safety
11. Governance and ethics
12. Animal welfare and testing
13. Talent, attraction, retention
and growth
14. Diversity and inclusion
15. Sustainable sourcing
16. Packaging recyclability
17. Data privacy
18. Responsible marketing
and advertising
19. Climate and emissions
20. Human rights
21. Product safety and quality
Importance to internal stakeholders
Importance to external stakeholders
Medium
High
Highest
Medium
High
Highest
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THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Protecting climate
and nature
We plan to leave the world a better place than
we found it. A code red alert has signalled to
the world that action needs to be accelerated
to protect the planet’s climate and natural
ecosystems.
And we need to act fast.
Our targets
Our progress
THG commits to reduce absolute Scope 1 and 2 GHG emissions
42% by 2030 from a 2020 base year.
In 2024 THG’s market-based emissions stood at 7,110 tCO2e which
is a 38.33% reduction against our base year.
THG commits to reduce absolute Scope 1 and 2 GHG emissions
97.7% by 2040 from a 2020 base year.
THG commits to reduce absolute Scope 3 emissions 90% by
2040 from a 2020 base year.
Scope 3 emissions now stand at 938,801 tCO2e.
THG commits that 85% of its suppliers by spend covering
purchased goods and services and upstream transportation and
distribution will have science-based targets by 2027.
Through our Partnership in Action (THG PACT) programme, we are
working with suppliers on the journey to net zero.
Powering all our geographical operations with 100% renewable
electricity by 2030.
In 2024 we are at 92%; we expect to be at 100% in 2025.
Accelerate decarbonisation of supply chain electricity through
100% carbon-free electricity (“CFE”) by 2030.
Achieve 6% carbon intensity reduction YoY of suppliers’ full
product carbon footprint, beyond just electricity, by 2030.
We continue to work with suppliers to gather the data via
THG PACT. Progress will be assessed through our supplier
scorecard process.
All own brand key commodity1 raw materials to be deforestation
free by 2030.
Engagement with suppliers under way.
1. Palm, soy, cocoa and paper.
Key achievements in 2024
92%
of purchased electricity
was renewable
38.33%
reduction of Scope 1 and 2
emissions against 2020 baseline
The following table details our energy
consumption and GHG emissions,
fulfilling our obligations within the
Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013
and the Streamlined Energy and Carbon
Reporting Regulations, March 2019. We
report our GHG emissions in accordance
with the GHG Protocol.
During 2024 we reviewed our Scope 3
calculation process and found sufficient
efficiencies to be able to report Scope 1,
2 and 3 emissions for the same financial
year for the first time.
THG emissions and energy reporting
Energy and emissions
Unit
20241
2023
2022
20214
2020
Location based
Scope 12
Tonnes of CO2e
5,332
5,520
5,194
2,309
1,946
Scope 2
Tonnes of CO2e
12,648
12,369
13,248
11,605
9,584
Scope 3
Tonnes of CO2e
938,801
813,439
780,027
—
620,518
Total Scope 1 & 2
Tonnes of CO2e
17,980
17,889
18,442
13,914
11,530
Scope 1 & 2
GHG intensity per £1m revenue
Tonnes of CO2e/
£m revenue
9.25
8.75
8.23
6.39
7.14
Total Scope 1, 2 & 3
Tonnes of CO2e
956,781
831,328
798,469
—
632,048
Scope 1, 2 & 3
GHG intensity per £1m revenue
Tonnes of CO2e/
£m revenue
492
406
357
—
392
Total Scope 1 & 2 UK3
Tonnes of CO2e
9,080
9,273
—
—
—
Total Scope 1 & 2 Rest of the World3
Tonnes of CO2e
8,899
8,616
—
—
—
Market based
Scope 12
Tonnes of CO2e
5,332
5,520
5,194
2,309
1,946
Scope 2
Tonnes of CO2e
1,778
9,060
9,157
11,605
9,584
Scope 3
Tonnes of CO2e
938,801
813,439
780,027
—
620,518
Total Scope 1 & 2
Tonnes of CO2e
7,110
14,580
14,351
13,914
11,530
Scope 1 & 2
GHG intensity per £1m revenue
Tonnes of CO2e/
£m revenue
3.66
7.13
6.41
6.39
7.14
Total Scope 1, 2 & 3
Tonnes of CO2e
945,911
828,019
794,378
—
632,048
Scope 1, 2 & 3
GHG intensity per £1m revenue
Tonnes of CO2e/
£m revenue
487
405
355
—
392
Total Scope 1 & 2 UK3
Tonnes of CO2e
4,015
4,114
—
—
—
Total Scope 1 & 2 Rest of the World3
Tonnes of CO2e
3,095
10,467
—
—
—
Energy consumption
Natural gas
kWh
20,713,666 20,434,090 23,275,342
12,051,833
9,943,330
Fleet & onsite fuel
kWh
6,471,301
7,476,557
3,889,419
590,717
488,578
Electricity
kWh
39,053,203 38,905,822 39,358,032 28,653,493
19,649,394
Total energy use
kWh
66,238,170 66,816,530 66,522,793 41,296,043 30,081,302
Total energy intensity
kWh/£m revenue
34,085
32,673
29,707
18,952
18,638
Total energy UK
kWh
44,293,613
45,084,421 42,682,049 23,332,220
16,833,917
Total energy Rest of the World
kWh
21,944,557
21,732,108
23,840,744
17,963,822
13,245,455
Renewable purchased electricity
Renewable
%
92
66
63
—
—
1. Assured by Forliance – for further details please see below and our Basis of reporting document.
2. Work to collate F-gas data from across the Group in 2024 and is still being gathered, and as such, no fugitive emissions are captured above. We intend to have
all data collated ready to re-baseline in 2025.
3. Data split not available for 2020, 2021 and 2022. The reduction YoY is a result of renewable energy certificates purchased for non-UK sites.
4. 2021 Scope 3 data has not been reported as this was not included in the scope of assurance.
External assurance
Forliance were appointed to undertake limited assurance of selected GHG and energy data
points contained in this disclosure using the assurance standard ISAE 3000. Forliance issued
an unqualified opinion on the data and their full assessment can be found in the Basis of
Reporting document which is on our website.
View online
Basis of Reporting
document
48
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Strategic Report
Governance
Financial Statements
Additional Information
Scope 1
Scope 2
Target
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
0
2,000
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Scope 3
Target
1,000,000
800,000
600,000
400,000
0
200,000
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Renewable electricity
The majority of our energy comes from
purchased electricity from the grid.
Our goal is that by 2030 100% of the
electricity we purchase will be covered by
a form of Renewable Energy Certificate
(“REC”) or Guarantee of Origin (“GoO”).
During 2024 the Group also launched
an Energy Strategy Working Group. This
group supports the Scope 1 and 2 Working
Group by devising actionable plans for
achieving 100% renewable electricity
across the Group and also manages the
energy procurement strategy.
In 2023 our renewable electricity
procurement stood at 66%, in 2024 this
increased to 92%. Plans and contracts are
now being put in place to close the gap and
it is forecasted that all sites which will be
part of THG as of 1 January 2025 will have
100% of their purchased electricity covered
by a form of REC or GoO.
This will result in THG achieving its
target five years ahead of schedule.
Strategic Report
Science-based targets – progress report
During 2023, the SBTi validated our near
and long-term targets. These targets are
informed by climate science and provide
a data-driven pathway for THG to reach
net zero. Our targets are set against a
2020 baseline, and this section provides
an update on our progress against the
targets as required by SBTi. The targets
we have committed to are:
Near-term – THG commits to
reduce absolute Scope 1 and 2
GHG emissions 42% by 2030 from
a 2020 base year.
Near-term – THG commits that
85% of its suppliers by spend
covering purchased goods
and services and upstream
transportation and distribution
will have science-based targets
by 2027.
Long-term/net zero targets
– THG PLC commits to reduce
absolute Scope 1 and 2 GHG
emissions 97.7% by 2040 from a
2020 base year. THG PLC also
commits to reduce absolute Scope
3 GHG emissions 90% within the
same timeframe.
THG commits to reduce absolute Scope 1
and 2 emissions 42% by 2030 – progress
During 2024 we took significant steps forward in
our renewable electricity purchasing strategy, with
both our Poland and Bentley Laboratory operations
now purchasing 100% renewable electricity, taking
the total across the Group to 92%. As can be seen
from the graph, this step forward in procurement
has moved us ahead of our science‑based target
trajectory in 2024. For 2024 our Scope 1 and 2
market-based emissions totalled 7,109.98 tCO2e
against our 2024 target of 9,195.10 tCO2e.
This equates to a 38.33% reduction in Scope 1 and 2
emissions by THG from our 2020 baseline.
Governance
To ensure we continue to make progress
on these targets, they are reported
to the Sustainability Committee who
maintain oversight. We also have a
Scope 1 and 2 Working Group, made up
of representatives across sustainability,
procurement, projects, property and
travel. During 2024, to connect this
working group to our operational sites,
we introduced site-level quarterly
meetings for our most material sites in
relation to their emissions and energy.
The purpose of these meetings is to
translate our Group-level SBTi targets
into site-level targets and then track
progress against these. This includes
a thorough assessment of the asset
lists of each site, which are rated
according to emissions potential, ease
of change, energy efficiency and cost.
The assessment will then feed into the
development of THG’s Transition Plan
Taskforce-aligned Transition Plan and
a site-level action plan which will be
supported by the working group.
THG commits that 85% of its
suppliers by spend covering
purchased goods and services
and upstream transportation
and distribution will have
science‑based targets by
2027 – progress
THG PACT was launched in December
2023 to support the delivery of THG’s
Scope 3 decarbonisation efforts, an
integral component of achieving our
SBTi-validated net zero targets. The
supplier engagement programme sought
to enhance transparency throughout our
supply chain, while fostering a culture of
sustainability with our suppliers.
In the past year, we’ve contacted over
300 of our strategic suppliers, with
positive results. Feedback has included
some of the world’s leading beauty brands
acknowledging THG as being a leader
in the Scope 3 space, highlighting our
detailed and pragmatic plans to tackling
this challenge.
Additionally, we have requested suppliers
to share their historical, THG-allocated
carbon emissions data with us, with
some of our suppliers being influenced
by THG PACT to begin their sustainability
journeys. The data collected from suppliers
has provided a dual benefit: (1) setting
a baseline to track supplier emission
reductions; and (2) third-party validated
data has replaced average spend-based
emission factors in our annual GHG report,
providing a more accurate view of our
environmental impact.
THG PACT has provided visibility of
progress towards our near-term targets,
with 36% of our suppliers by spend
covering purchased goods and
services and upstream transportation
and distribution reporting they have
science‑based targets.
The success of THG PACT has also been
recognised by Environmental Finance,
who awarded THG their 2024 EMEA
Supply Chain Initiative of the Year award.
In 2025, our focus is on maintaining
and nurturing the strong relationships
that were developed throughout 2024,
while significantly expanding the reach
of THG PACT. We are more than doubling
the scope of the programme, including
suppliers from our five satellite sites.
We will also encourage suppliers to
increase the quality of data provided, with
specific focus on limited assurance and
setting science-based targets.
THG PLC also commits to reduce
absolute Scope 3 GHG emissions
90% by 2040 – progress
Scope 3 emissions contributed 99.25%
of THG’s 2024 total carbon footprint,
with the biggest areas continuing to be in
category 1 (purchased goods and services)
and category 4 (upstream transport
and distribution).
In 2024, we saw a 15% increase in total
Scope 3 emissions compared to 2023,
driven in the main, by our category 1 due
to higher purchased goods volumes.
In addition to the THG PACT programme,
we continue to identify further ways
to reduce emissions across the 12
applicable Scope 3 categories. We have
seen a 25% decrease in category 3 (fuel
and energy-related activities) and a 9%
decrease in category 6 (business travel)
emissions. While these cover a smaller
proportion of our Scope 3 emissions,
they still contribute towards our drive
to net zero.
We are actively working to minimise the
impact of upstream transportation and
distribution by optimising the locations of
our fulfilment centres.
As a result, our category 4 emissions
have decreased by 4% compared to
last year and by 12% compared to the
baseline year.
As we continuously work on improving
data quality, in 2024 we enhanced the
accuracy of emission factors across key
products and suppliers; this includes
updating our emissions accounting for
whey protein following industry best
practices in the dairy sector. Please
see THG’s Basis of Reporting 2024 for
details about these changes. These
methodological changes, along with
increased purchases, have led to a
significant increase in Scope 3 emissions
in comparison to our baseline year.
Our Scope 3 emissions intensity
increased by 26% from the 2020
baseline, alongside a 20% revenue
growth. While this reflects business
expansion, part of the increase is also
due to the methodological changes
that provide a more accurate and
comprehensive assessment.
Due to these changes, and following
the demerger of THG Ingenuity, we will
review our baseline data in 2025.
Scope 1 & 2 progress against target (metric tonnes of CO2e)
Progress
Goal
100%
2024
92%
2023
66%
2022
63%
2021
0%
2020
0%
Scope 3 progress against target (metric tonnes of CO2e)
Emission source
Category
tCO2e
% of Scope 3
Purchased goods and services
1
803,360.11
85.6%
Capital goods
2
8,328.35
0.9%
Fuel and energy-related activities
3
2,887.41
0.3%
Upstream transportation and distribution
4
92,407.95
9.8%
Waste generated in operations
5
83.02
0.0%
Business travel
6
1,647.15
0.2%
Employee commuting
7
14,408.99
1.5%
Upstream leased assets
8
381.48
0.0%
Downstream transportation and distribution
9
55.50
0.0%
Processing of sold products
10
—
0.0%
Use of sold products
11
10,413.35
1.1%
End of life treatment of sold products
12
2,885.43
0.3%
Downstream leased assets
13
—
0.0%
Franchises
14
1,942.72
0.2%
Investments
15
—
0.0%
Total
938,801.47
100%
50
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Strategic Report
Governance
Financial Statements
Additional Information
Key
Raw material acquisition
0.32
Production
0.14
Distribution and storage
1.69
Use
15.19
End of life
0.2
Key
Raw material acquisition
0.95
Production
0.5
Distribution and storage
1.19
Use
18.99
End of life
0.16
Strategic Report
Product LCAs
During 2024 we continued to
pursue better data to make
more informed decisions and
drive action by undertaking Life
Cycle Analysis (LCA) across key
products. These LCAs allow us
to move away from spend-based
emissions factors to more accurate
activity-based numbers, which
also enable the identification of
opportunities to reduce impact.
THG Nutrition completed LCAs
on six of its key products (protein
shakers and protein powders)
to better understand the carbon
emission hotspots across each
of the products’ life cycles. These
LCAs have developed a wealth of
insights that are being incorporated
into how we actively continue to
decarbonise our supply chain.
Shaker LCIA
The shaker Life Cycle Impact Assessment
(LCIA) mapped out a cradle‑to-grave
analysis to consider each of the key
carbon-intensive impact areas in the
product’s life cycle, including raw material
acquisition, production, distribution and
storage, consumer use (washing), and end
of life recycling/disposal.
The LCIA exercise established the
consumer use phase is responsible for the
highest carbon impact for both plastic and
metal shakers, accounting for 86.6% and
87.2% respectively.
This is primarily driven by handwashing
being the cleaning method typically
selected by customers, which incurs a
high footprint versus, for example, using
a dishwasher.
While these areas are not totally within
THG’s direct control we are committed
to using the data from this analysis to
shape our decisions going forward to
reduce the total carbon footprint of these
products from material inputs through to
end-of-life treatment.
Superblend
Vegan Protein Blend
Impact Whey Protein
Impact Whey Isolate
Poultry meat
Eggs
Beef
500
400
300
200
0
498.90
42.10
57.00
14.47
16.08
6.11
4.78
100
kg CO2e/kg of protein
Protein LCA
In December we completed our LCA on
four of our bestselling protein powders,
Impact Whey Protein, Impact Whey
Isolate, Impact Vegan Protein, and our
Plant Protein Superblend. Being able
to quantify the carbon footprint of our
finished products is essential to being
able to support customers in better
understanding the carbon footprint
of the products they purchase and
consume. Our cradle‑to-gate analysis
showed all had a significantly lower
carbon footprint per 1kg of protein
versus traditional protein sources
such as poultry, eggs and beef.
While Myprotein advocates our protein
products be consumed responsibly
as part of a balanced diet, the LCA
illustrates the carbon efficiency of
our protein powder. Internally, we will
continue to make informed decisions
regarding new formulations and improve
our product footprints based on the
findings from material acquisition to
end‑of-life treatment of packaging.
Scoop removal trial
In July 2024, we ran a successful trial with our Myprotein Plant Protein Superblend, where the product was sold without a plastic scoop
included. We tracked the organic consumer sentiment and were encouraged by the positive response, and so we are now actively
exploring how to continue scaling up this change across the Myprotein range. Scoopless products would not only deliver a significant
reduction in our plastic consumption, but the change could also reduce THG’s carbon footprint by up to 300 tonnes of CO2e per year.
Responsible sourcing
and deforestation
Nature forms an important part of the
Group’s THG x Planet Earth Sustainability
Strategy. Deforestation and forest
degradation continues to be a central
topic in the global discourse on climate
change and biodiversity. We recognise the
importance of addressing this risk and
minimising our nature footprint, which
is represented by our target to ensure
that all own brand key commodity raw
materials are deforestation-free by 2030.
During 2024 we launched our Sustainable
Sourcing Framework which covers direct
procurement of key commodities that
are associated with high deforestation
risks and are material in THG’s sourcing
strategy. These are paper, cocoa, soy and
palm oil.
On the back of this launch the Group
Sustainability Team also ran training
sessions with THG’s procurement teams
to upskill them on the requirements
within the framework, to ensure
deforestation prevention measures are
implemented in our sourcing practices.
During 2024 THG progressed its
Group‑wide membership with the
Roundtable on Sustainable Palm Oil
(“RSPO”). During 2025 we will continue
with our data-led approach to form a
complete baseline and set an internal
target to improve on this as part of
our progress towards the wider 2030
goal. Our HQ and two THG Nutrition
manufacturing sites have successfully
completed Rainforest Alliance audits.
During 2025 we will also submit our site
in Poland for audit to continue our efforts.
Despite the EU Deforestation Regulation
(“EUDR”) implementation being delayed
by 12 months, we continue to engage
with our supply chain and collate data
across the seven commodities covered
by the regulations and this will continue
into 2025.
Energy efficiency case study
THG LABS UK develop and
manufacture skincare, haircare,
suncare and fragrance products for
THG and third-party beauty brands
from our best-in-class facilities in
South West England.
This year they searched for a
solution to reduce the energy
required to manufacture emulsion
cream formulations. This is an
energy‑intensive process which
requires rapid heating to create the
emulsion, before cooling to allow the
addition of temperature‑sensitive
ingredients such as plant‑based
extracts, fragrances and preservatives.
From here, the product is cooled
a further 10°C.
The team trialled a range of methods
to increase energy efficiency
throughout the production process.
New methods were analysed using
an energy scoring system, devised to
identify where efficiencies were made,
and a new cold-water quench process
was discovered which requires less
energy in heating the water and
cooling the emulsion.
We have adopted this process in
current formulations where it is
possible, and it will be used as
standard practice in new formulation
development to ensure energy
efficiency underpins all processes
at THG LABS UK.
Plastic and metal shaker LCIA results – kgCO2e
Comparative protein LCA per kg of protein (Cradle to Gate)
Plastic
Metal
52
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Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
We approach our responsibilities with
utmost dedication, recognising the
impact of everything we create and
the livelihoods of those touched by
our business. It is our obligation to
uphold a supply chain that is not only
responsible and ethical but also one
that does not harm other individuals
or the environment.
Our targets
Our progress
All suppliers to commit to THG’s Supply Chain Standards
by 2025.
This was achieved in 2023 when we made our Supply Chain
Standards a part of our contracts.
100% of Tier 1 and Tier 2 suppliers complete Sedex audit
by 2025.
94% of in-scope suppliers are compliant.
THG will disclose 100% whistleblowing reports YoY on the
number of cases raised and closed within our agreed service
level agreement (“SLA”).
Ten whistleblowing cases were raised in 2024. All ten cases have
been closed within the agreed SLA.
100% of own brand packaging to be recyclable and/or reusable
by 2025.
Our own brand beauty packaging is 98.3% recyclable (with the
inclusion of recycle:me). All other THG own brand packaging
recyclability to be assessed.
100% of THG operations and Tier 1 suppliers to achieve zero
waste across operations by 2030.
First THG sites to be audited in 2025.
Key achievements in 2024
Social responsibility
Supply chain
We are proud to continue our
transformative journey with Sedex,
reinforcing our commitment to social
responsibility and promoting sustainable,
ethical practices across our supply chain.
In 2024, we advanced our supply chain
outreach programme by strengthening
our Social Responsibility Strategy,
refining our supplier tiering approach, and
updating internal guidelines to implement
a geographical risk-based method
for categorising suppliers. The Sedex
ethical audit platform has been pivotal
in enabling THG to map its global supply
chain and identify non-compliances
within our supply chain. SMETA (Sedex
Members Ethical Trade Audits) provides
a comprehensive overview of supplier
performance, covering labour standards,
health and safety, environmental impacts,
and business ethics.
Over the past year, we engaged with Tier
1 suppliers essential to THG’s production.
The outreach process involved
requesting suppliers to align with THG’s
Supply Chain Standards, become Sedex
members, and complete an active 4-pillar
SMETA audit. For suppliers within scope
for 2024, we achieved a compliance rate
of 94%.
Our geographical risk-based approach
has been key in refining our supply chain
mapping strategy, enabling us to target
compliance efforts in a more focused
and tactical manner. While achieving
social audit compliance with suppliers
can be challenging, THG’s strong
cross‑functional relationships have
been instrumental in ensuring alignment
towards our shared goals.
Thanks to our diligent outreach
programme, we have successfully
maintained our target of zero tolerance
violations among in-scope suppliers.
In 2025, we plan to expand our mapping
strategy to include Tier 2 manufacturing
and fulfilment sites. This ambitious
goal builds on this year’s progress,
demonstrating that transparency in
the supply chain is achievable through
collaboration. We will continue to support
our suppliers in their sustainability
journey through our award-winning PACT
programme, making continued strides in
the social sustainability arena.
Supply Chain Standards
In 2023 we introduced our Supply
Chain Standards, which set out our
stance on issues such as human rights,
and to detail our expectations for our
supply chain on setting science-based
targets and disclosing emissions data.
The Supply Chain Standards form part
of our contracts, making compliance a
binding part of doing business with THG.
During 2024 we undertook a review
of the standards and updated them
to include such topics as the introduction
of a new standard for raw materials,
ensuring compliance with relevant
standards of the country of origin
to reduce the threat of food fraud.
View online
Supply Chain Standards
View online
Modern Slavery Statement
Responsible marketing
We recognise the importance of
responsible marketing and take our
commitment seriously. That’s why we
want to guide our employees, brands,
customers and partners on responsible
marketing. To do this we launched our
Responsible Marketing Code during
2024. In doing so, we can ensure we
comply with relevant local, national and
international marketing standards, laws
and regulations. This includes being
guided by industry self-regulatory best
practices, drawing from the International
Chamber of Commerce (“ICC”) Advertising
and Marketing Communications Code.
The scope of our Responsible Marketing
Code covers all forms of marketing
communications across THG Beauty, THG
Nutrition and THG Ingenuity, and extends
to our external media partners. It applies
globally, and covers all THG employees,
contractors and sub-contractors, including
third-party marketing agencies and
influencers.
Strengthening our supply
chain and circularity
– recycle:me relaunched to empower consumers to recycle
hard‑to‑recycle plastic beauty packaging
– Sustainable Sourcing Framework launched
– Sedex audits completed at 7 UK and 3 international THG sites
View online
Responsible Marketing Code
54
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Strategic Report
Governance
Financial Statements
Additional Information
Own brand packaging
We are committed to reaching our target for all own brand packaging to be recyclable or reusable by 2025. In 2023, we reported
that 91% of our own brand packaging was recyclable. This was calculated in alignment with the UK Plastics Pact (“UKPP”)
definition of ‘recyclable’ plastic packaging. However, from 2024 onwards, THG is aligning its definition of ‘recyclable’ with the UK
Government’s Recyclability Assessment Methodology (“RAM”), which was developed as part of the packaging Extended Producer
Responsibility (“pEPR”) regulations, and was published in December 2024. In 2025, we will continue to invest in available and
practicable solutions to increase the recyclability of all our packaging types, finding recycling pathways for any packaging where
solutions are not currently available.
Our newly redeveloped recycle:me scheme will play an integral part in helping us to achieve our recyclability targets. Through
working closely with our recycling partner, the scheme is able to collect ‘hard-to-recycle’ plastic beauty packaging, as well as
fragrance bottles which are not widely collected by local authorities. Due to the extensive capabilities of our recycling partner,
our own brand beauty packaging is 98.3% recyclable across the range, with the few remaining packaging formats undergoing
redesign in 2025.
Improving recyclability
Since 2022, we have been re-developing
the packaging format of our THG
Nutrition protein pouches, changing them
from a hard-to-recycle mixed material
format to a mono-material flexible
plastic, which can be recycled alongside
other widely used soft plastics such as
bread and vegetable bags. In 2024, 96%
of all pouches placed on the market were
made from recyclable mono-PE and we
are confident that this will reach 100%
in 2025.
Increasing recycled content
Increasing the recycled content in
our packaging is one of the ways we
are supporting a circular economy.
Throughout 2024, we continued to
increase the use of recycled plastic
across our THG Nutrition packaging
portfolio.
Our vitamins, gummies, spreads, syrups
and protein bottles all now include 50%
PCR (post-consumer recycled) plastic.
In addition, our flavour drops bottles
transitioned to 35% recycled plastic in
2024, and will be further increased to
50% PCR in 2025.
OPRL
In 2024, THG became a member of OPRL
(On Pack Recycling Labelling), adopting
clear and recognisable recycling labelling
to help our UK customers to recycle their
packaging responsibly. The labels have
been rolled out across THG Nutrition
products, with plans to increase usage
across the entire THG Nutrition range
in 2025.
Zero waste to landfill
In 2023 we committed to aligning our zero waste efforts to the US Green Building Council’s TRUE standard. In 2024 we rolled out
the programme across all THG sites in the UK and internationally. Using a data-led approach, we evaluated every operational site
in the THG portfolio to understand the waste streams and processes in detail, to identify opportunities to reduce waste across
the Group. A key success from the programme saw one of our main fulfilment centres in Manchester introduce new, simplified
and clearer signage at waste stations. This supported a reduction in contamination rates for cardboard waste, from 79% in May
to 0% in November.
THG Nutrition also continued to support the conversion of their food waste into fish feed, avoiding landfill and incineration.
Furthermore, in 2024 they made a 58% reduction in surplus food products between 2023 and 2024. We have continued to
transform our waste into resources for our value chain and have benefited from our own internal recycling capabilities at Indigo
Environmental. In 2024, Indigo’s recycling centres recycled 53 tonnes of plastic from THG’s own operations, and we have since
begun trials to turn the recycled material into totes for our fulfilment centres, providing a circular solution for our plastic waste.
Throughout 2024 we have continued to improve the quality and availability of data across the Group. In 2025, we expect to submit
our first sites for TRUE Zero Waste certification and aim to report waste data across the entire Group in our 2025 disclosure. The
table below is our first disclosure of waste data, focusing on four key sites across the UK and Poland which are essential in THG
manufacturing and fulfilment operations.
Waste data summary from four key THG sites (UK and Poland)
Description
Unit
2024
Total waste produced
Metric tons
5,050.6
Material recovery rate
%
73.7
Energy recovery rate
%
26.1
Landfill and incineration without energy recovery rate
%
0.2
Strategic Report
Our workforce
While ensuring our supply chain is free
from unethical practices we must lead by
example. THG is committed to upholding
internationally recognised human rights
in line with The Universal Declaration of
Human Rights; the International Labour
Organization’s (“ILO”) Core Conventions;
and the UN’s Guiding Principles on
Business and Human Rights, both in our
supply chain and our own operations.
To make this commitment explicit we
updated our Modern Slavery Statement
in 2024 to state this. During 2024 we
also undertook SMETA audits at THG’s
owned manufacturing and fulfilment
sites. We have worked closely with these
sites to ensure full compliance, 7 UK and
3 international THG sites now hold a valid
four‑pillar audit.
Whistleblowing and anti-bribery
Our aim is to operate properly,
responsibly and ethically while
encouraging a free and open culture
in dealings between employees and
all people with whom we engage. In
order to protect our people, assets and
information, we recognise that effective
and honest communication is essential
if concerns regarding breaches or
failures are to be effectively dealt with
and the Company’s success ensured.
THG’s whistleblowing service is a free
and professional service that enables
all employees to raise their concerns
confidentially. The service is available
to all THG staff, agency workers and
contractors.
This process is covered by our internal
Whistleblowing Policy. As part of our
Supply Chain Standards we also state
our suppliers must have whistleblowing
processes in place and ensure that any
whistleblowers are protected against
retaliation.
To ensure the Group’s integrity is
protected we have an Anti-Bribery
Policy in place to ensure employees,
contractors, third-party intermediaries
or agents are aware of and share our
commitment to conducting business
ethically. Our Anti-Bribery Policy
summarises the Company’s position
in relation to ethical standards,
including bribery.
recycle:me scheme
According to the British Beauty
Council, the beauty industry generates
an estimated 120 million units of
packaging per year, with only 9% of
this being recycled by consumers.
THG Beauty is deeply committed
to acting as a force for good and
helping its customers to reduce their
environmental impact. To enable
customers to recycle more of their
packaging, recycle:me was relaunched
in 2024, offering nationwide doorstep
collections of hard-to-recycle beauty
and cosmetic packaging.
The scheme leverages the THG
Ingenuity infrastructure to provide an
efficient and convenient take-back
scheme that diverts packaging waste
from landfill or incineration. recycle:me
is Extended Producer Responsibility
compliant and is unique in the fact
that it is the only nationwide take‑back
scheme that recycles plastic decorated
fragrance packaging.
The scheme was initially launched
through THG’s leading brands
Lookfantastic and Cult Beauty, but
accepts beauty packaging from
any brand, regardless of where it
was purchased. THG Beauty’s brand
partners contribute towards the
operational cost of the scheme, and the
collective aim is to recycle at least 1
million units of packaging every year.
The scheme is free for customers to
use and they are rewarded with £5
in credit, that can be spent at either
Lookfantastic or Cult Beauty, for
each return of at least five qualifying
products. The data gathered is fully
auditable and collected at product level
to give us a clear understanding of how
the scheme is performing. Due to our
partnership with our recycling partner,
we are able to provide due diligence to
ensure that the materials are recycled,
and we are exploring ways to turn the
plastic into circular solutions for caps
and closures that can be used again by
the beauty industry, or used for furniture
in our Lookfantastic stores.
As well as increasing the recycling rate
of beauty packaging, this unique and
market-leading scheme has multiple
opportunities:
1. It aids the retention of eco‑conscious
customers who are becoming
cognisant of the beauty industry’s
waste footprint.
2. It provides valuable insight into
consumer behaviour.
3. The reward scheme encourages
customer retention.
4. We can offer brands the opportunity
to pay to access data, allowing them
to offset their own packaging waste
fees as well as reducing THG’s own
liability.
5. We are already exploring the
possibility to expand the recycle:me
model into other markets as a
revenue-generating service.
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Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Empowering people
and communities
Our people are our greatest asset. We nurture
world‑class talent from all over the globe and
create career-defining opportunities for people
at all levels. We’re proud to drive progression at
an exceptional rate so that our people can go
further, faster.
Our targets
Our progress
Achieve 50% female representation and 20% ethnic minority
representation across the entire workforce by 2030.
50% female
17% ethnic minority (53.02% disclosure rate)
Achieve 50% female representation and 15% ethnic minority on
the Board and senior leaders by 2030.
30.4% female
13% ethnic minority
Eliminate gender and ethnicity pay gaps across all THG
businesses by 2030.
Target in progress, see page opposite.
Pay all employees and agency workers a Real Living Wage
(“RLW”) by 2030.
Target in progress. see page opposite.
Achieve at least 15% improvement in employee engagement
score by 2025.
Target achieved in 2023, engagement scores monitored in 2024.
Two days volunteering per year for every THG employee by 2025.
Formally launched in 2024.
Provide 10,000 people in the community with technology and
life skills training by 2030.
Target under review following demerger of Ingenuity
To design, develop and maintain a THG Privacy Information
Management System (“PIMS”) aligned to ISO 27701 by the end
of 2025.
The THG PLC ISO 27001 accreditor exited the UK market in 2024
and as part of onboarding a new accreditor for the existing ‘Good’
ISO 27001 accreditation, we will add ISO 27701 to the portfolio of
accreditations. Post the demerger of Ingenuity Ltd from THG PLC
(quarter 1 2025), the ISO 27001 and ISO 27701 accreditations will be
held and maintained by Ingenuity Ltd and THG PLC will place reliance
upon these Ingenuity Ltd accreditations in its role as the material
provider of infrastructure and computer services to THG PLC.
Key achievements in 2024
2 days
volunteering days per year
granted to THG employees
4,000+
volunteering hours provided
by THG to the community
£110,665.60
raised for The Christie
Charity including matched
donation
Entire workforce
We continued to achieve our goal of
having 50% female representation
across the business. Ethnic minority
representation decreased from 28% to
17%, creating an opportunity to introduce
additional diverse hiring initiatives in
2025. Voluntary gender and ethnicity
disclosures demonstrated that our
gender disclosure rate is 99.19% and
our ethnicity disclosure rate is 53.02%.
During 2025, we will be running a data
disclosure campaign, #CountMeIn, to
encourage colleagues across the UK to
disclose their diversity data to reduce the
number of ‘unknown’ designations and
enable us to make further data-driven
people decisions.
Board and senior leaders
During 2024 ethnic minority
representation across the Board and
senior leaders decreased from 17% to
13% temporarily due to changes in the
Board composition.
Gender and ethnicity pay gap
We report via the UK Government gender
pay gap service every year, and in our
2023 report, we reported that the mean
average pay gap was 21.67% in favour
of males, while the median pay gap was
14.07%. Where 38% of males, and 34% of
females received a bonus in 2023, the
mean average pay gap was 33.1% with
the median pay gap being 0%.
Real Living Wage
During 2024, we saw an increase in
colleagues receiving a Real Living Wage,
from 66.8% in 2023 to 69.3% in 2024.
This metric currently covers UK-based
staff directly employed by THG. In
2025 we are exploring options to close
this gap.
Employee engagement
After achieving our goal to increase
employee engagement by 15% in 2023,
we continued to monitor and track
employee engagement through employee
surveys in 2024. Using the data from
the surveys, we identified three areas of
focus to enhance engagement in 2025:
1. Compelling Company vision.
2. Clear, regular and transparent
communication.
3. Developing leadership behaviours at
all levels.
Volunteering
We launched our volunteer leave scheme
to allow all THG colleagues globally to
take two days’ paid leave each year to
donate their time and skills to charities
and good causes. Over 4,000 hours of
volunteering were completed, supporting
our sustainability mission to act as a
force for good in leaving the world a
better place than we found it.
Fundraising
Together, our colleagues chose our
Charity of the Year – The Christie Charity
– and raised £55,332.80 to help the
charity fulfil their ambition of providing
a state-of-the-art scanning experience
for cancer patients within an Advanced
Scanning and Imaging Centre. With THG’s
match funding, the total amount raised
was £110,665.60.
“Without help from
organisations like THG,
The Christie simply
couldn’t do the lifesaving
and life-changing work
that it does every day.
Thank you once again
on behalf of Christie
patients.”
Anna MacIntosh
Corporate Fundraising Manager
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Strategic Report
Governance
Financial Statements
Additional Information
Health & Safety
Environmental
Strategic Report
Health, safety and environment
(‘HSE’)
THG takes a proactive approach to
managing health, safety and environment
(HSE), and has outlined the commitment
of THG and the expectations to
managers, the leadership team and all
colleagues. Our approach is for ‘Zero
Harm, Zero Compromise’, to achieve a
lost-time injury-free state.
In 2024, we experienced a rise in the
lost-time accident-frequency rate
from 0.33 to 0.761. This change can be
attributed to the adjustment of core office
hours from 42.5 to 37.5 hours per week
and the implementation of standardised
accident reporting and analysis across
our operations. Importantly, despite these
adjustments, there was no increase in
lost-time accidents compared to the
previous year.
The implementation of leading indicators
as part of our 2024 KPIs has helped the
businesses to understand their position
in relation to legal compliance. This has
resulted in the early identification of
legal non-compliance and proactive
decision‑making to ensure appropriate
corrective actions are taken.
1. The increase in the accident-frequency rate (“AFR”) in 2024 is primarily influenced by the change to a 200,000-hour multiplier. This adjustment aligns our
reporting with a globally recognised universal benchmark, commonly used in international frameworks. THG clients also expect this format for enhanced
benchmarking and transparency.
We have maintained a strong
commitment to our lost-time injury-free
strategy, strategically reinforcing five
key focus areas: advancing workforce
health and safety upskilling, optimising
and evolving our operational practices,
enhancing governance and oversight,
prioritising occupational health and
wellbeing, and driving ongoing cultural
improvements.
Leadership, recruitment
and upskilling
We have strategically expanded our
recruitment of HSE professionals both
in the UK and internationally.
Additionally, we have successfully
implemented new global health and
safety standards and transitioned the
overall leadership of the HSE function
to the security team to drive greater
integration and alignment with our
broader organisational goals. By aligning
the HSE function with the security team,
we have enhanced cross-functional
collaboration, ensuring a more cohesive
approach to risk management and
operational safety. This integration
enables a unified strategy that not only
strengthens our security measures but
also improves the effectiveness and
efficiency of our HSE initiatives across
the Group.
UK occupational health
provision
In 2024, we placed focus on
occupational health surveillance
through our occupational health provider.
The HSE team has commenced the
development of the health and safety
SharePoint, to align with ISO 45001.
Our 2025 HSE targets are set out below:
Injury free
We aspire towards a zero-injury state across the THG portfolio through the use of good governance and oversight, HSE leadership,
leading indicators, education and influence.
Transformation ten-step pathway: to a safe, mentally healthy and culturally engaged workforce
Why HSE compliance supports our licence to operate
Raise levels of HSE
competency and upskill
the workforce.
Ongoing evaluation and
enhancement of our ways
of working – technical and
process.
Develop the process for
identifying opportunities
for joined-up governance
and oversight.
Focus on health
and wellbeing.
Continue our cultural
orientation improvements.
Why? To drive and improve
standards of HSE worker
competence, supervision
capability and leadership
across projects.
Why? We have the most
effective and efficient risk
management systems to
enhance ways of working
and raise levels of hazard
awareness.
Why? Good governance adds
value. It is lean, transparent
and ethical, focused on
tackling operational challenges
in ways that complement the
big picture vision.
Why? Promoting wellbeing
at work can help create a
positive working environment
that helps minimise stress
levels, improving employee
satisfaction and engagement,
ultimately helping our
employees thrive at work.
Why? Improve capability to
rapidly engage the workforce
who can have a short exposure
time to our injury-free culture
standards and values.
Step 1:
Q1 24 to Q2 25 HSE
Compliance and
Licence to Operate
conditions met.
Step 2:
Mature Supervisor
HSE competencies
and leadership skills.
Step 3:
All THG businesses have
common work planning
and risk management
processes.
Step 4:
All THG businesses have
common HSE leading
performance dashboard
metrics to ensure lean and
Human and Organisational
Performance HSE
management.
Step 5:
THG has a Management
Standard in place
– supporting HSE
leadership, culture and
risk management.
Step 10: A safe, mentally
healthy and culturally
engaged workforce and
supply chain supported
by the best technology
and ways of working to
deliver HSE governance
and leadership that is
injury free.
Step 9:
Contractor passports
scheme put into place.
Step 8:
All THG suppliers have
a common workplace
standard for ensuring an
injury-free environment.
Step 7:
THG suite of onboarding
tools developed to
introduce suppliers
into our injury-free
HSE culture.
Step 6:
All THG projects have
common health and
wellbeing programmes.
Boosting company reputation
and trust, compliance plays
a crucial role in enhancing
a company’s reputation and
establishing trust among
stakeholders.
Compliance is vital in
mitigating potential legal
and financial risks for
organisations.
Increasing operational
efficiency.
Enhancing employee
satisfaction and retention.
Driving business growth and
competitive advantage.
100%
Safety audits scheduled vs.
completed (2024: 10%)
-20%
Annual accident-frequency rate
(4.4)1 (new base rate metric)
-20%
Lost time accident-frequency rate (0.61)1
(new base rate metric)
0
7-day RIDDOR injuries
(2024: Ingenuity 6, PLC 2)
0
Immediately reportable RIDDOR
injuries (2024: Ingenuity 5, PLC 0)
100%
Completion of aspects and impacts
register (2024: 10%)
100%
Environmental compliance audits
(2024: 90%)
0
Actual discharges to surface water
(2024: 0)
0
Actual statutory nuisance complaints
(2024: 0)
0
Accidental spillages (discharges
to ground) (2024: 2)
1. The accident frequency rate currently reflects THG Ingenuity and THG PLC. This shall be separated
during 2025.
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Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
The role of the Task Force on
Climate‑related Financial Disclosures is
to improve transparency of organisations’
climate-related risks and opportunities
so that investors can make informed
decisions.
The TCFD recommendations are
structured around four themes:
Governance, Strategy, Risk Management,
and Metrics and Targets, and we have
structured our disclosure in line with
these. There are 11 recommendations
within these four themes which set
out the expectations of a disclosure.
2024 represents THG’s first disclosure
which is fully aligned with these
11 recommendations.
THG acknowledges that a changing
climate brings with it exposure to
physical and transition risks, with
opportunities also available if a
business can adapt to this changing
reality. Physical risk at THG includes
our operational sites’ exposure to
climate‑related weather perils and
the impact this weather can have on
the yields of THG Nutrition’s key raw
materials. Transition risk is focused
on how the transition to a low carbon
economy will impact businesses through
economic, technological and regulatory
changes. For THG, the transition risks and
opportunities are within carbon costs,
litigation, market shift and reputation,
which are explored further within this
disclosure.
During 2024 the Group completed
modelling work across THG operations
to determine unmitigated climate
risks our sites could be exposed to
as the climate changes. The following
disclosure is consistent with all of the
four TCFD recommendations and the
11 recommended disclosures of TCFD
(see table 1), as required by Listing Rules
9.8.6R and 14.3.27R. This disclosure
also meets the requirements of the
Companies Act regulations.
Governance
Table 1 – TCFD recommendations
TCFD recommendations
Consistent with
TCFD framework?
Page
number
Governance
a. Describe the Board’s oversight of climate-related risks
and opportunities.
Yes
63
b. Describe management’s role in assessing and managing
climate-related risks and opportunities.
Yes
63
Strategy
a. Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and
long term.
Yes
64
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and financial planning.
Yes
64 to
70
c. Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.
Yes
64 to
70
Risk management
a. Describe the organisation’s processes for identifying
and assessing climate-related risks.
Yes
71
b. Describe the organisation’s processes for managing
climate-related risks.
Yes
71
c. Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management.
Yes
71
Metrics and targets
a. Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
Yes
71
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
Yes
49 to
51, 71
c. Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets.
Yes
71
Task Force on Climate-related Financial Disclosures (TCFD)
The Board
The Board is responsible for the overall
execution of the THG x Planet Earth
strategy, which covers climate‑related
issues and includes the progress towards
our climate change goals and targets. The
Board also approved our Net Zero Strategy
in 2023 as well as the disclosures made in
the Annual Report.
The Sustainability Committee, chaired
by our SID Sue Farr, meets at least three
times a year. The Sustainability Committee
was established to ensure that the Group
has appropriate and effective strategies,
policies and operational controls in place
to conduct its business in a responsible
manner, ensuring accountability for
sustainability targets. Key duties include
reviewing and monitoring the Group’s
systems, strategies, policies and targets in
relation to, amongst other things, energy
and carbon management, and climate
change. The Chair will communicate
relevant ESG matters up to the Board
through shared minutes and summarised
updates. The Group Sustainability Team
(“GST”) also provides updates to this
Committee towards the targets set in THG
x Planet Earth. You can find further details
on the Committee within the Sustainability
Committee Report on pages 108 and 109.
The Audit Committee monitors the
effectiveness of the control environment
through the review of internal audit
reports and other assurance activity, while
also considering relevant reporting from
management and the external auditor.
Management
Group Sustainability Team
The GST, which feeds up to the
Sustainability Committee, manages
the assessment and tracking of
climate‑related risks to THG. The GST
has set up working groups comprising
of management from the necessary
functions, described below, to provide
resource and governance over delivery
of this TCFD disclosure. The GST also
manages key metrics and mitigation
measures, such as the reduction of
Scope 1 and 2 emissions and ensuring
compliance with ESG regulations.
Scope 1 and 2 Working Group
This working group brings together
management representatives from
the sustainability, property, projects,
procurement and travel teams. The aim
of this working group is to ensure we are
taking steps to achieve our science‑based
targets, which in turn protects our
reputation and reduces our exposure to
financial risk such as carbon taxation.
ESG Working Group
To enable THG to undertake TCFD and
ESG-related work, we created a working
group that consists of representatives
from sustainability, finance, risk and
internal audit.
The role of this group is to manage ESG
horizon scanning and devise appropriate
plans to ensure THG complies with
upcoming legislation.
Sustainability Forum
The Sustainability Forum met once
a month in 2024 bringing together
managers and directors from relevant
business areas to review climate change
and sustainability‑related topics and
projects. The Forum provides a platform
for the sustainability team to ask
management from across the business to
aid in overcoming barriers. It also enables
management to raise any climate change
and sustainability-related issues that may
come to light.
The Risk Team
The Risk Team holds monthly risk update
meetings with key business areas to ensure
the risk register continues to reflect current
risk exposure (you can find more details on
risk and the risk register on pages 72 to 81).
Within the monthly meetings, any material
risks identified by the GST are escalated to
the Risk Team. The risk register is reviewed
and confirmed to be up to date. Similar risk
updates are held with other key business
areas and are reviewed and escalated to
the Risk Committee as appropriate.
Figure 1. Governance Structure
Scope 1 and 2
Working Group
The Board
Sustainability
Forum
Group Sustainability
Team
Sustainability
Committee
ESG Working
Group
Audit
Committee
Risk
Team
Risk
Committee
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Financial Statements
Additional Information
Strategic Report
Strategy
Climate change, environmental and social responsibility are managed as one of our principal risks and are a core consideration in
business strategy and decision‑making. Within this principal risk THG identified three key areas of materiality: physical risk to raw
materials, physical risk to operations, and transitional risk (see table below). Since 2023 THG has partnered with Marsh to develop
a climate change impact modelling methodology to be run across the short term (up to 2030), medium term (2040), long term
(2050) and very long term (2100 – only used for physical risk to operations). This development process was used to assess each
risk and scope out the required analysis, the methodology and results of which is evidenced within this disclosure.
Table 2 – Overview of the climate risks and opportunities THG have identified, along with mitigation
efforts and time horizon the impacts might be realised
Climate risk
Potential
impacts
High-level mitigation
Time
horizon
Physical risk
Supply chain disruption to raw
material availability
Increased
cost of
supply or
inability to
source
– extensive and up-to-date knowledge of supplier base to understand
sourcing regions
– continuous monitoring and forecasting of demand and availability to
adjust intake accordingly
– continuous monitoring of supply chain activity and news through
advanced web-scraping functionality
M to L
Damage to physical assets
caused by increased frequency
or severity of climate perils
Cost of
repairs and
damage to
stock
– properties are screened before they are purchased/a lease is signed
– increase climate resiliency of infrastructure at high risk if required
– robust business continuity plans are in place as well as insurance coverage
M to L
Transition risk
Litigation brought by plaintiffs
against ecommerce or health
and beauty companies for
their liabilities in causing harm
through climate change or
making misleading claims
Increased
cost
– set science-based targets and continue to make progress against these
– created PACT, our supplier outreach programme, to ensure suppliers are
setting science-based targets and making progress towards net zero
– increasing the use of recycled materials in our packaging
– launching recycle:me to offer customers a way to return hard-to-recycle
plastic packaging to us so we can recycle
– internal green claims process and partnership with Provenance to
ensure only substantiated claims are made
M
Carbon costs due to legislation
enacted by national and local
governments to price and
penalise GHG emissions
Increased
operating
cost
– set science-based targets and continue to make progress against these
– progressing towards our goal of 100% renewable purchased electricity
– created THG PACT, our supplier outreach programme, to ensure suppliers
are setting science-based targets and making progress towards net zero
M
Additional economic
depreciation impacts
and resulting investment
requirements on assets in
response to changing energy
needs and to reduce emissions
Increased
capital and
operating
cost
– continuing with identification and roll-out of energy efficiency measures,
both in improving processes and by transitioning to lower energy
consuming equipment
– creating a TPT-aligned transition plan in 2025 to build a longer-term
capital expenditure plan
M to L
Market change due to a
company’s perceived inaction
to limit climate change
Loss of
market
share and
revenue
– creating sustainability pages on our brand websites to ensure active
communication with our customers on our commitments
S
Opportunities
Market disruption, changes in
consumer preference trends
and demand projections
caused by shifts towards green
products
Increase
of market
share and
revenue
– undertaking product-level LCAs to understand hotspots so we can
reduce the impact of our products
– using innovation to develop new product ranges, such as Myprotein’s
Superblend, and changing product formulation materials and processes
– ensuring customers can find products which align with their priorities
through our Provenance programme
S
Market change due to a
company’s perceived action
to limit climate change
Increase
of market
share and
revenue
– creating sustainability pages on our brand websites to ensure active
communication with our customers on our commitments
S
Key: S = short term M = medium term L = long term
Scenario analysis inputs – raw materials
Figure 2. RCP Scenarios
Key ingredients
Climate scenario
Time horizon
Whey
Cocoa
Broad bean
Oat
Pea
Soybean
Paris-aligned – RCP 2.6 – +1.0
Rapid, global move to decarbonise with aggressive climate
action implemented. Likely temperature increases ranging
from 0.3°C to 1.7°C.
‘Most probable’ – RCP 4.5 – +1.8
Global move towards decarbonisation with a less aggressive
pace and intensity. Likely temperature increases ranging from
1.1°C to 2.6°C.
‘Moderate mitigation’ – RCP 6.0 – +2.2
Moderate global effort to limit climate impacts. Likely
temperature increases ranging from 1.4°C to 3.1°C.
‘Worst case’ – RCP 8.5 – +3.7
Limited climate action taken by both government and
businesses globally. Likely temperature increases ranging
from 2.6°C to 4.8°C.
5 years
10 years
20 years
30 years
Physical risk – raw materials
Modelling process
One primary climate-related impact
material to THG Nutrition is how
a changing climate will affect the
availability of raw materials used
in our products. As weather patterns
become more extreme this may disrupt
our sourcing regions. Where our regions
are well insulated from climate impacts,
global changes in availability may restrict
availability in our sourcing regions and
cause price increases.
To gain an understanding of our
exposure, we devised a bespoke
approach to modelling our key
ingredients. Our detailed modelling
approach incorporated their constituent
characteristics into the climate
assessment and a comparison to the
global reality to support the identification
of risks and opportunities.
We identified six key commodities
during the scoping exercise, comprising
five crops (cocoa, soybean, pea, broad
bean and oats) and whey. For the crops,
we researched optimal conditions for
temperature and precipitation using
relevant academic literature, which
informed the optimal yield curve for
each ingredient. For whey, we produced
a bespoke model, whereby heat stress
was tied to the wet-bulb temperature
(a function of temperature and humidity),
which influences the efficiency
of sweating from dairy-producing
livestock. Therefore, the optimal
conditions for whey yield production
were given parameters by wet-bulb
temperature rather than temperature
and precipitation.
During the modelling, we used
Intergovernmental Panel on Climate
Change (“IPCC”) Representative
Concentration Pathways (RCP scenarios
– See figure 2), which provided different
emission-intensity forecasts, to gain a
range of climate-change eventualities
extending from now to 2050 in 5, 10,
20 and 30-year time-steps. For whey,
due to limitations of the source data, we
used only one RCP scenario (4.5 – ‘Most
Probable’ scenario), but applied the same
time horizons. Analysis was completed
based on the current sourcing regions
for each commodity to understand the
forecast changes in yield at all of these
locations. The modelling work for RCP
4.5 by 2050 was chosen as the most
appropriate scenario for this analysis,
as this is the only one covering all six
raw materials and represents the ‘most
probable’ scenario.
TCFD continued
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Financial Statements
Additional Information
Strategic Report
Strategy continued
Physical risk – operational sites
Modelling process
As our climate changes and extreme
weather events become more common or
more severe, physical assets face greater
risk from acute and chronic weather
events. The purpose of our analysis was
to model seven climate change perils to
understand how the potential long-term
impacts could affect our sites.
Each of THG’s assets was assessed to
identify the building type, and modelling
ran across two climate scenarios. The
model ran across ten-year time intervals
up to 2100 and calculated the financial
cost of damage arising from climate
change-based physical risk for every site
(expressed as an annualised damage that
is a proxy for insurance risk).
As opposed to the 2050 timeframe used
in the raw materials climate modelling,
we have modelled the assets to 2100,
due to the longer-term investment
physical assets can represent.
See figure 3 below.
Results
The modelling was undertaken in 2023
across the THG portfolio. The make-up of
our portfolio is continually changing and
the analysis here covers the 86 sites that
remained part of our portfolio at the end
of 2024. Of these 86 sites, there were
eight identified as being at ‘high’ or ‘very
high’ risk today from an unmitigated risk
perspective. The source of risk for six of
these was surface water flooding and
the other two were coastal inundation.
We conducted a review of the three sites
in the UK and the three sites in the US
using the Environment Agency (“EA”) and
the Federal Emergency Management
Agency (“FEMA”) respectively flood
mapping resources.
From this further investigation it was
determined that the UK sites were judged
to be at ’low’ or ‘very low’ risk from a
mitigated perspective. FEMA showed the
sites in the US to be at a ‘0.2% annual
chance of flood hazard’ or below. In 2025
we will continue to investigate the two
other sites, which are in China and Japan.
Once we have established a baseline for
these two sites we will investigate all
eight sites further to understand if there
is any additional mitigation required for
the longer term.
When looking out to 2050 and 2100, no
additional sites enter the ‘high’ or ‘very
high’ category, however three sites noted
as being at ‘high’ risk today progress
to being at ‘very high’ risk in 2100, thus
increasing the potential financial risk.
All eight sites flagged are either leased or
third-party sites and as such we are not
tied to these sites in the long term.
Table 5 on the following page, shows the
outputs of the modelling. Each impact
has been scored from one to five based
on the potential financial impact to THG.
The score applied is consistent with how
the business scores impacts of all other
risks. One is considered to be low impact
with five being high impact.
Figure 3. Modelling criteria used
Modelling criteria used for analysis
Climate perils
Climate scenarios
Time scenarios
Risk definition
– Coastal inundation
– Extreme wind
– Forest fire
– Freeze thaw
– Riverine flooding
– Soil movement
– Surface water
flooding
– RCP 2.6 – Rapid,
global move to
decarbonise with
aggressive climate
action implemented.
Likely temperature
increases ranging
from 0.3°C to 1.7°C.
– RCP 8.5 – Limited
climate action
taken by both
government and
businesses globally.
Likely temperature
increases ranging
from 2.6°C to 4.8°C.
2020 (today)
2030 (short term)
2040 (medium term)
2050 (long term)
2100 (very long term)
Very Low – Negligible
damage
Low – Superficial
damage, minor cost
impact
Medium – Possible
superficial damage,
minor cost impact
High – Expected cost
of damage notable,
potential cost impact
Very High – Widespread
damage/disruption
THG
30 years –
worst case
Cocoa
Broad bean
Oat
Pea
Soybean
THG
5 years
10 years
20 years
30 years
Whey
Cocoa
Broad bean
Oat
Pea
Soybean
Global
5 years
10 years
20 years
30 years
Whey
Cocoa
Broad bean
Oat
Pea
Soybean
Results
The results suggested that the buying strategy is well insulated from climate risks if the ‘most probable’ scenario is realised.
To understand the resiliency of our current sourcing against how the rest of the globe purchases on average, we ran a
comparison. Table 3 below shows a comparison of the changes in yield expected at 5, 10, 20 and 30-year time intervals in an
RCP 4.5 scenario. The top table shows the expected yield changes in THG’s sourcing regions whereas the bottom table shows
yield changes for global-sourcing regions. This analysis suggests that THG’s current procurement strategy is expected to be more
resilient than the global average.
Table 3. Comparison of yield changes in the regions THG sources from compared to where the globe
sources the raw materials from
Table 4. Yield changes based on RCP 8.5
Key
>9% increase
6%-9% increase
3%-6% increase
0%-3% increase
In addition, the table below shows the
‘worst case’ scenario for the five crops
which were modelled for this pathway.
This table suggests that even under
the worst case climate scenario our
sourcing strategy is well insulated from
climate risk.
The results of this modelling suggest a
low risk of the ‘most probable’ climate
scenario impacting the availability of
key raw materials to THG. It is however
important to recognise that this analysis
only measured expected changes in
yield, and that there are additional
factors that could affect the availability
of raw materials.
For this reason it is essential that we
continue to review this as a risk to
the business as part of our Group risk
management processes. Geopolitical
and economic uncertainty, and
infrastructure and supply chain are
identified principal risks (see Risk
section pages 78 and 80) and are
managed as part of the risk structure
discussed in the Governance section.
TCFD continued
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Strategy continued
Transition risk continued
Table 6 (below) details the three climate scenarios we have modelled transition risk against. These scenarios were chosen as they
provided a clear view of exposure across a wide range of eventualities. ‘Current policy’ is expected to be the most likely to occur.
Table 6: Climate Scenarios used in risk modelling process
Decarbonisation
pathway
Corresponding Shared
Socioeconomic Pathway (“SSP”)
Global temperature rise by 2100
above pre‑industrial levels
Description
No policy
SSP5-85
>4°C
Assumes policy reversals and increased
energy consumption and emissions
Current policy
SSP3-70
3°C
Continuation of current trend, without any
further or additional change in policy
Stated policy
SSP2-45
2.5°C
Incorporates today´s policy intentions and
targets i.e. those defined by countries’
Nationally Determined Contributions
Paris aspiration
SSP1-19
1.5°C
Radical and urgent policy response
requiring rapid and systemic energy and
behaviours shifts and major technology
innovation
Carbon and litigation
Table 7 (below) demonstrates the outputs
of the carbon policy and litigation
modelling, demonstrating the potential
cost to the business through taxation or
litigation. THG begins to potentially see
carbon taxation costs under the ‘Stated
policy’ and ‘Paris aspiration’ scenario,
with the majority of risk sitting in Scope
3. Given over 99% of our emissions
are Scope 3 this is unsurprising. While
taxation is unlikely to be applied directly
to THG, it is expected that suppliers
would pass this cost on and as such
is considered material to THG. To aid in
the mitigation of this risk, THG launched
the award-winning PACT programme
in 2024 to engage with suppliers and
ensure they have science-based targets.
More details on this programme can be
found on page 51. While Scope 1 and 2
carbon taxation exposure is minimal, THG
continues to make progress against our
science‑based targets and, as reported
on page 50, we are ahead of target in
achieving net zero, thus reducing our
exposure.
Litigation covers three definitions of
litigation:
1. Greenwashing – litigation brought
against companies that overstate
the sustainable or ‘green’ nature of
their products/services, commitment
to climate change and net zero
transition plans.
2. Directors and officers – litigation
brought against directors and
officers for failing to account for
climate‑related risks, misleading
stakeholders or failing to deliver on
climate commitments.
3. Public nuisance and pollution –
litigation is brought against companies
for their polluting impact and the
public nuisance faced by society due
to climate.
The expected exposure is non-linear
as the public nuisance litigation is
more likely in the ‘No policy’ scenario.
Reduction in Scope 1 and 2 emissions
will aid in the reduction of our exposure
under litigation risk. THG has also put in
place a green claims governance process
where guidance is issued to the business
on approved green claim language,
evidence of which must be collected to
support claims made. This process has
been put in place to reduce the likelihood
that THG will be subject to greenwashing
litigation and maintain consumer trust.
THG has extended this good governance
process to our third-party beauty sites
through our partnership with Provenance.
Provenance have been validating
sustainability‑related claims for Cult
Beauty since 2019 and the partnership
was extended to Lookfantastic in 2024.
Table 7. Impact scores for each transition risk with 1 = low impact and 5 = high impact
Decarbonisation pathway
Carbon policy
Litigation
Scope 1 & 2
Scope 3
No policy
0
0
2
Current policy
0
0
1
Stated policy
1
4
1
Paris aspiration
1
5
2
Table 5. Impact scores for each climate peril at each time step with 1 = low impact and 5 = high impact
Peril
Scenario
Today
2030
Short term
2040
Medium term
2050
Long term
2100
Very long term
Coastal inundation
2.6
2
2
2
2
2
8.5
2
2
2
2
2
Extreme wind
2.6
1
1
1
1
1
8.5
1
1
1
1
1
Forest fire
2.6
1
1
1
1
1
8.5
1
1
1
1
1
Freeze thaw
2.6
0
0
0
0
0
8.5
0
0
0
0
0
Riverine flooding
2.6
1
1
1
1
1
8.5
1
1
1
1
1
Soil movement
2.6
1
1
1
1
1
8.5
1
1
1
1
2
Surface water flooding
2.6
2
2
2
2
2
8.5
2
2
2
2
2
Transition risk
Transition modelling quantifies the
business impacts associated with the
global economy’s transition to a lower
carbon-intensive world. The transitioning of
the global economy carries with it several
risks and opportunities that can affect
THG. For instance, should governments
introduce carbon taxes, this can pose a
risk of increased costs if we are slow to
reduce our footprint.
Equally, it can be an opportunity if we move
to net zero ahead of our competitors and,
as such, have lower operating costs. During
2023, our net zero GHG targets were
approved by SBTi, helping ensure THG is
resilient to policies such as carbon taxes.
We modelled using the Resilience model,
provided by the Cambridge Centre for
Risk Studies and used by numerous
multinational companies in the past
to assist with their TCFD reporting.
We ran modelling from 2024 to 2029 due
to the greater forecasting certainty of
the shorter time horizon. We can use the
insights gained to determine and prioritise
appropriate mitigation strategies to reduce
the impact of risks and capitalise on
opportunities presented by the transition.
We separated the modelling methodology
into four components: Digital Twin,
Transition Modules, Climate Scenarios, and
Analysis (see figure 4).
Figure 4. Modelling criteria used
Modelling process
TCFD continued
Step 1: Digital Twin
A digital copy of THG
is created based on
financials, products
and our carbon
footprint.
Step 2: Transition
Modules
Modules relevant
to THG’s business
model were selected.
We mapped each
model to the
business-value chain
and assessed how
it will materialise.
We segmented
the modules
depending on how
the financial impact
will materialise: cost
impacts and revenue
impacts.
Step 2a: Cost Impacts
i. Liability – Litigation brought by plaintiffs
against ecommerce or health and beauty
companies for liabilities in causing harm
through climate change.
ii. Carbon policy – Carbon costs due
to legislation enacted by national and
local governments to price and penalise
GHG emissions – the Resilience model
contains carbon pricing for various
countries, which will measure our
exposure.
Step 3: Climate
Scenarios
We evaluated the
impacts of the
transition modules
on THG’s digital twin
for three potential
climate scenarios
or ‘decarbonisation
pathways’, which
represent potential
courses by which the
global economy’s
transition may
materialise in the
future.
Step 4: Analysis
Once all data was
collected in the
required format, we
created the digital
twin in the Resilience
tool, replicating THG’s
business model,
set up the relevant
transition scenarios,
and ran the model to
assess the financial
impact over five
years and under the
five climate change
scenarios.
Step 2b: Revenue Impacts
i. Market shift – Market disruption,
changes in consumer preference trends
and demand projections caused by
shifts towards green products.
ii. Reputation – Market change due to a
company’s perceived action or inaction
to limit climate change.
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Analysis
THG division
Product/company
No policy
Current policy
Stated policy
Paris aspiration
Plant-based
product demand
Beauty
Hair care
Skin care
Fragrance
Toiletries
Colour
Nutrition
Proteins
BSFD
Vitamins
THG brand
reputation
Beauty
– Cult Beauty
– Lookfantastic
– Glossybox
– Dermstore
– Mankind
Nutrition
– Myprotein
– Myvegan
– Myvitamins
Potential revenue
increase
Key
0-1%
1-2%
2-3%
3-4%
4-5%
Strategic Report
Strategy continued
Risk Management
Metrics and Targets
The identification and management of
climate-related risks follow the Group’s
existing risk management framework.
However, the methodology applied to
climate risk themes differs as follows.
To reflect the nature of climate change,
the time horizon applied to velocity was
short term at 2030, medium term at 2040
and long term at 2050. Our assessment
of ‘likelihood’ is incorporated into the
different climate scenarios that we analyse.
For example, where there is a similar
outcome under all scenarios, the likelihood
of the risk or opportunity is deemed high.
Conversely, where the outcome is only
expected under stress scenarios the
likelihood or opportunity is deemed low.
The standard Group approach in
considering risks and future prospects is
an assessment period of up to three years
(aligned to the viability assessment period).
When assessing the likelihood of risk, we
measure this as a percentage of possible
occurrence in the next 12 months.
The Directors consider these deviations
from the standard risk framework to
be appropriate given the nature of this
specific risk.
Additionally, for our climate-related risks
and associated disclosures, the Group
engaged several external partners during
the year to assist with risk assessment over
the parts of the business over which THG
has operational control.
The Risk Committee remains responsible
for providing oversight of the Group’s risk
management, but for climate‑related risks is
supported by the Sustainability Committee.
Climate‑related presentations provide
the Committees with the opportunity to
perform more in‑depth reviews of the
associated risk. The updates received by
the Sustainability Committee during 2024
are detailed in the Sustainability Committee
Report on pages 108 and 109.
Physical risk – raw materials
The modelling undertaken suggests that
THG’s sourcing strategy is resilient to
climate risk. However, there is a need to
compare this with qualitative information
from our supply chain and factor in other
connected risks, such as agricultural
taxation, concentrated sourcing regions,
emission hot spots and social risks.
During 2025 THG Nutrition will undertake
workshops to connect these elements
together to form a holistic picture of
supply chain risk. This evolution will
enable our climate risk to expand beyond
the single lens currently applied in this
disclosure. During these workshops it
will be assessed whether any formal
metrics or targets are required to track
our exposure.
Physical risk – operational sites
The modelling performed on our
operational sites will be reperformed
whenever there is a material change to our
portfolio to ensure we continue to monitor
our exposure here. During 2025, as part
of our work to disaggregate the THG PLC
risk from the Ingenuity risk, we will also
undertake modelling of the sites we have
entered since the first round of modelling
was done to update our risk profile.
Transition risk and opportunity
During 2022, we submitted our
science‑based targets to the SBTi,
and they were approved in September
2023. You can find the targets we have
set ourselves for GHG emissions and
our progress against these in our SBTi
progress update on pages 50 and 51.
During 2024 we found opportunities to
expedite the calculation of our Scope 3
emissions and this report now contains
Scope 1, 2 and 3 emissions disclosed for
the accounting year as opposed to Scope
3 emissions being one year behind as they
were last year. THG will come in scope
of CSRD and EU Taxonomy regulations,
and is already preparing for these. We will
begin to report metrics and targets on
the material elements of these as they
are developed. As disclosed within the
DIrectors’ Remuneration Report, ESG
targets are incorporated within the 2023
and 2024 LTIP awards which have been
made to Executive Directors. During 2024
we began work to explore the introduction
of an internal carbon price; this work will
continue in 2025 as we look to understand
what form this mechanism could take,
how it could be incorporated into decision
making and the price we should apply.
Table 9 Summary of Climate-risk related targets
Target
Progress
Mitigation for
THG commits to reduce absolute Scope 1 and 2 GHG
emissions 42% by 2030 from a 2020 base year.
THG commits to reduce absolute Scope 1 and 2 GHG
emissions 97.7% by 2040 from a 2020 base year.
For 2024, our Scope 1 and 2 market-based emissions
totalled 7,110 tCO2e against our 2024 target of 9,195.10
tCO2e. See page 50 for further details.
Reduce exposure
for carbon taxation
and litigation
THG commits to reduce absolute Scope 3 emissions
90% by 2040 from a 2020 base year.
THG PACT was launched in December 2023 to support
with the delivery of THG’s Scope 3 decarbonisation efforts,
an integral component of achieving our SBTi‑validated net
zero targets. See page 51 for further details.
Reduce exposure
for carbon taxation
and litigation
THG commits that 85% of its suppliers by spend
covering purchased goods and services and
upstream transportation and distribution will have
science‑based targets by 2027.
36% of our suppliers by spend covering purchased
goods and services and upstream transportation and
distribution reported they have science-based targets.
See page 51 for further details.
Reduce exposure
for carbon taxation
and litigation
Powering all our geographical operations with 100%
renewable electricity by 2030.
In 2023 our renewable electricity procurement stood
at 66%; in 2024 we increased this to 92%. See page
50 for further details.
Reduce exposure
for carbon taxation
and litigation
Market shift and reputation
As the world transitions to a low carbon
economy, it is expected that consumers
will seek to purchase products that
have a lower environmental footprint.
Research was undertaken to understand
how beauty and nutrition markets might
shift during this transition. Plant-based
options were considered a good indicator
of a product with environmental benefits,
such as less resource-intensive practices
and less toxic ingredients for a transition.
Table 8 (below) demonstrates the
modelled % of revenue increase based on
market reports for plant-based products.
In addition to considering the products
themselves, customers are also likely to
think about the company itself and how it
engages with sustainability initiatives.
Marsh researched THG’s largest brands,
as well as a group of competitors, to
evaluate how their public approach to
climate change compares in the market,
and therefore how they will be perceived
compared to other brands. The output
of this research is also shown in the
table below.
To seize the opportunities identified, THG continues to evolve its offerings in this space through product innovation such as the
development of Myprotein Superblend, a product range made from upcycled barley, left over by beer brewers, turning grains that
would otherwise go unused into a high-quality protein.
Since this research was undertaken, THG brands have created sustainability pages to ensure clearer communication with our
customers on the relevant initiatives they are undertaking; examples can be seen on Myprotein (Sustainability | Myprotein) and
Cult Beauty (Sustainable Beauty | Cult Beauty).
Table 8 – Modelled % of revenue increase based on market reports for plant-based products
TCFD continued
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Risk management and
informed decision-making
THG’s risk management framework is designed to protect the interests of key
stakeholders and enhance the quality of decision-making, enabling the effective
management of our strategic, financial, operational, compliance, change and
emerging risks. The framework is integral to our day-to-day activities, helping
us achieve our strategic objectives through risk-informed decision-making and
managing risk effectively.
A changing risk landscape
The current macroeconomic and
geopolitical environment continues to
present a challenging risk landscape for
all organisations. The effects of these
conditions on the business are explained
in various sections of the Strategic
Report and consequently the narrative
included in the Chief Executive Officer’s
Review and Chief Financial Officer’s
Review. These sections should be read
together with the disclosures below to
allow for an overall understanding of the
risks and challenges which will continue
in 2025.
The demerger of THG Ingenuity completed
on 2 January 2025. Various transitional
arrangements were effective from the
date of transaction to mitigate risks and
ensure a smooth transition. However, we
acknowledge that a demerger (or such
a transaction) is often accompanied
by transformation risks (separation of
systems and processes), people risk (for
example, any employee anxiety relating
to future roles and needs) and change
risk (for example, the distraction from
day-to-day business focus). We also
acknowledge the external risks and the
potential for impact on customers and
investor confidence. As is usual for a large
transformation project, there are many
dynamic workstreams and we continue to
monitor and mitigate any risks arising as a
result of the demerger.
Our risk profile continues to evolve,
and the business updates its view on
principal risks accordingly. We have made
a number of changes to our principal
risks during the year and these are
detailed under ‘Principal risks’ below.
How we identify risks
Our risk identification process follows an
enterprise-wide ‘top-down, bottom-up’
approach, which seeks to identify:
– principal risks that may affect our
ability to achieve our strategic
objectives, or pace by which we
achieve them, with these risks
representing the risks that most
threaten the achievement of our
strategy;
– strategic, financial, operational,
compliance and change risks that
occur across all our businesses. These
risks are those that pose the greatest
threat to the success of business
activities across the Group and may
also feed into our principal risks.
The bottom-up approach involves
a rolling programme of workshops
across the business, facilitated by the
Risk team. Current and emerging risks
identified by management teams are
then added to risk registers, which are
owned by the respective divisional and
functional teams, and reviewed regularly.
These registers are consolidated and
aggregated into a Group risk register,
which provides organisational visibility
to strategic, financial, operational,
compliance, change and emerging risks.
The Group risk register underpins both
the principal and emerging risks, and the
associated Committee updates prepared
by the Risk team.
The top-down approach involves the
Board and Risk Committee assessing
these updates and outputs. At each
meeting, the Committee reviews
the principal risks, associated risk
metrics and updates presented by
senior executives, functional heads
and the Risk team. As part of the risk
identification process, the Committee will
also make reference to updates provided
by the internal and external audit teams
in the Audit Committee.
Emerging risks
We define emerging risks as
uncertainties identified through the
principal and operational risk processes,
whose full extent and associated
implications are not yet completely
clear. Emerging risks are identified using
internal and external sources, via our
rolling programme of workshops, and
through discussions with business
leaders and subject-matter experts.
By the very nature of emerging risks,
it is common to identify false leads,
and conflicting signals and messages.
Irrespective, these risks are logged and
then investigated and understood by the
allocated risk owner, working with the
Risk team.
How we assess risks
We assess all identified risks for
likelihood and impact using a range
of financial and non-financial criteria.
The assessment considers risk before
any mitigations (inherent risk) and after
current mitigations (residual risk). The key
benefit of assessing inherent risk is to
highlight potential risk exposure in the
event of control or mitigation failure.
We continue to consider risks both
individually and collectively to fully
understand our risk landscape.
By analysing the correlation between
risks, we can identify those that have
the potential to cause, affect, or increase
another risk.
This exercise informs our scenario
analysis, particularly in scenarios used
in the Viability Statement, see pages 81
and 82.
While the identification and management
of climate-related risks follows the
Group’s existing risk management
framework, the methodology applied
to the assessment of climate risk
themes differs. See ‘Identifying and
assessing climate risk’ on page 71 of
the Sustainability section.
How we manage risks
Eliminating risk is often not feasible or
desirable, so we use our risk appetite
statement and risk appetite metrics to
inform our decisions on risk treatment.
Our risk appetite reflects our ability
and desire to accept a certain level of
risk to be able to achieve our strategy.
Our overall risk appetite is approved and
measured by the Board.
We monitor each principal risk metric
against risk appetite targets and
tolerances, to ensure an acceptable
level of risk for the Group and to ensure
these remain aligned with our strategic
objectives. We monitor the current and
emerging risks identified by management
teams in their risk registers against the
same risk appetite.
Roles and responsibilities
Our Three Lines Governance Model defines clear roles and responsibilities for all employees and establishes accountability for
actions and decisions. It also describes how appropriate oversight, challenge and assurance are provided over business activities
and associated risks.
Three Lines Governance Model
Risk ownership
and control –
1st line
The first line represents all employees, who are responsible for identifying risks and procedures to maintain
effective controls day-to-day. They hold the necessary skills and knowledge to help with identifying and
managing risks within our business.
Monitoring and
compliance –
2nd line
The second line consists of teams including Risk, Technology, Health & Safety, Environmental, Legal, Regulatory,
Compliance, and Finance. These teams are responsible for establishing frameworks and policies, while also
providing the tools and techniques to enable the first line to manage risk effectively.
The Risk team has overall responsibility for facilitating and implementing a consistent risk management
approach across THG, including the provision of appropriate risk reporting for the Risk Committee, Audit
Committee and the Executive.
Independent
assurance –
3rd line
The Internal Audit team and external assurance providers give independent assurance and help to assess
whether the first two lines are operating effectively. The purpose and activities of the Internal Audit team are
set out in the relevant section of the Audit Committee Report on pages 94 to 99.
Governance and oversight
Board
The Board retains overall responsibility for setting Group risk appetite and for risk management and internal
control systems. In accordance with principles M, N and O of the UK Corporate Governance Code 2018
(“the Code”) in addition to Paragraph 58 of the Financial Reporting Council guidance (section 6), the Board
is responsible for reviewing the effectiveness of the risk management and internal control systems and
confirms that:
– there is an ongoing process for identifying, evaluating and managing the emerging risks faced by the
Company;
– the systems have developed throughout the year under review and up to the date of the approval of the
Annual Report and Accounts;
– they are regularly reviewed by the Board; and
– the systems accord with the FRC guidance on risk management, internal control and related financial and
business reporting.
There were no instances of significant control failing or weakness during the year.
We acknowledge the 2024 Code and specifically Provision 29 which will apply to financial years beginning on
or after 1 January 2026, which will ask boards to make a declaration in relation to the effectiveness of their
material internal controls. We have provided further details on how our risk management processes will evolve
to support this in the ‘Evolving our risk management processes’ section.
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Governance and oversight
Risk Committee
The Risk Committee supports the Board in setting the Group’s risk appetite and ensuring processes are in place
to identify, manage and mitigate the Group’s principal risks.
At each meeting, the Committee is provided with updates on each principal risk and reviews the associated risk
metrics to assess whether they remain aligned to risk appetite targets and tolerances. Any risk metric that is
outside of appetite and tolerance is escalated by the Committee to the Board. The Committee also considers
any relevant sources of assurance relating to the key controls and mitigations for each principal risk. These
presentations provide the Committee with the opportunity to review the overall impact on residual risk, and
whether this falls within risk appetite.
The updates received by the Committee during 2024 are detailed in the Risk Committee Report on pages 100
and 101.
Audit
Committee
The Audit Committee monitors the effectiveness of the control environment by reviewing Internal Audit reports,
relevant reporting from management and the External Auditor, and any other relevant assurance activity.
Further information on the Committee’s activity in 2024 is set out in the Audit Committee Report on pages 94 to 99.
Risk management and informed decision-making continued
Roles and responsibilities continued
Evolving our risk
management processes
In 2024, we continued to evolve our risk
management approach.
During the year we issued a risk survey
which was completed by the senior
leadership teams in each business and
functional leaders across the Group.
This process supplemented our wider
ongoing identification and assessment
of risks, identifying emerging risks
while also helping to validate that
the existing principal risks remain
appropriately focused. The outputs of the
survey were also shared with the Risk
Committee and the Executive teams.
One of our aims for 2024 was to promote
greater risk awareness across the Group
and ensure that all employees remain
clear on their roles and responsibilities.
In support of this we revisited the risk
policy and framework to ensure these
remain as concise and practical as
possible. If employees understand how to
apply risk management in a way that is
relevant to their role, they are more likely
to make risk-informed decisions which
align with our risk appetite. This theme
will continue into 2025.
As required by Provision 29 of the 2024
Code, which applies to financial years
beginning on or after 1 January 2026,
the Board will need to make additional
declarations regarding the effectiveness
of their material internal controls.
In 2025, we will therefore reassess
how we capture and present information
to the relevant Committees, in support
of the disclosures the Board will need
to make.
To facilitate the initiatives set out
above, we will be seeking to replace
our existing software and platforms to
ensure that we have a more integrated
and workflow‑driven approach to risk,
control and assurance, and an improved
line of sight through each of these
areas. Replacing our existing systems
and processes will ensure there is an
improved and more interactive process
for all stakeholders in relation to data
capture and reporting on risk.
This will streamline the process for
stakeholders at all levels, making
it easier for stakeholders to deliver
their respective responsibilities and
further improve engagement with
the risks they are responsible for. The
additional information captured as part
of the initiatives detailed above will
broaden the reach of the Risk team
and provide increased visibility to the
relevant Committees over the risks and
uncertainties facing the business.
Principal risks
The Board and the Risk Committee
carry out an ongoing assessment
of the principal and emerging risks
facing the Group throughout the year.
The assessment considers risks that
would threaten THG’s business model,
future performance, solvency or liquidity,
and ensures the risks continue to align
with our business strategy.
We previously monitored and reported
on 15 principal risks. As a result of the
demerger, we have made a number of
changes and we now monitor and report
on 12 principal risks.
Explanations are provided below for the
principal risks that have changed year
on year.
– Strategic optionality – following
completion of the demerger and
strategic reviews within THG Beauty
and THG Nutrition to streamline the
offering, we no longer consider our
strategic optionality as a principal
risk. However, our strategic optionality
remains part of the ongoing Board
agenda and discussions.
– Third-party reliance and infrastructure
and supply chain – this has been
consolidated into a broader
‘Infrastructure, supply chain and
critical partners’ principal risk.
– Ingenuity reliance – as THG Ingenuity
is now a key third-party supplier and
critical partner to THG, a new principal
risk has been recognised separate to
the Infrastructure, supply chain and
critical partners risk, reflective of the
significance of this relationship.
– Ingenuity ecommerce platform has
been removed as a principal risk and
is now replaced by ‘THG Ingenuity
reliance’.
– Innovation – this has been consolidated
into the ‘Customer needs’ principal risk.
As detailed on the following table, a
range of measures are in place, or are
being deployed or developed, to manage
and mitigate our principal risks.
Link to strategic priorities key:
Principal risks
Direction of travel
1. Cyber security and data privacy
Stable
2. THG Ingenuity reliance
New
3. Culture
Stable
4. Talent
Stable
5. Customer needs
Stable
6. Infrastructure, supply chain and critical partners
Stable
7. Climate change, environmental and social responsibility
Stable
8. Health and safety
Stable
9. Legal and regulatory compliance
Stable
10. Product safety and quality
Stable
11. Geopolitical and economic uncertainty
Increasing
12. Liquidity and funding
Stable
Cyber security and data privacy
Risk description
Risk context
Management and mitigation
Failure to responsibly
collect, process and store
data, together with not
ensuring an appropriate
standard of cyber security
across the business, will
result in us not meeting
our regulatory obligations,
and losing the trust of our
stakeholders.
Link to strategic priorities
Direction of travel –
Information is the lifeblood of
a digital company – protecting
the confidentiality, integrity
and accessibility of this data
is critical for a data-driven
business. Failure to do so can
have significant financial and
regulatory consequences in
the General Data Protection
Regulation (“GDPR”) era. In
addition, we also need to use our
data efficiently and effectively to
improve business performance.
– Continuously improving data-protection strategy, framework and
methodology, ongoing data mapping and impact assessment
procedures.
– Formally deployed information security risk management
methodology to provide objective reviews and monitoring of our
assets and systems.
– Multi-year cyber security programmes supporting continuous
improvement and reducing cyber risk across technology,
business processes and culture.
– All employees are required to undertake awareness training for
information management and data protection, with a focus on the
GDPR requirements.
– Internal and external validation of compliance through auditing,
including risk-based audits of suppliers and other third parties.
– Comprehensive disaster recovery and business continuity plans
in place across the Group.
– Robust change-management processes and incident
management protocols adhered to for all products and services.
– Our cybersecurity policies outline our approach and
commitments, detailing the expectations for managers,
the leadership team and all colleagues.
Build leadership positions in core territories and categories
Deliver innovative and relevant products to global consumers
Develop Active Customer base and drive loyalty
Enhance brand equity through D2C channels
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Risk management and informed decision-making continued
Principal risks continued
Culture
Risk description
Risk context
Management and mitigation
If we do not fully empower
our employees and enable
accountability in line with
our shared values and
behaviours, we will be
challenged to create a
culture that meets THG’s
business ambitions.
Link to strategic priorities
Direction of travel –
The development of a shared
behavioural competency that
encourages employees to
always do the right thing, put
customers at the heart of the
business and drive innovation,
is critical in THG’s success.
Devolution of decision‑making,
and the acceptance of
accountability for decisions, is
fundamental to our continued
development and to sustain our
shared values and behaviours.
THG also supports a culture
of empowered leaders that
develops ideas and solutions,
and provides employees with
a safe environment, allowing
for honest disclosures and
discussions. Such a trusting and
empowering environment can
help sustain innovation, enhance
customer success and drive
the engagement that results in
increased market share.
– Whistleblowing and incident-reporting mechanisms in place to
allow issues to be formally reported, investigated and monitored.
– We continue to invest in diversity and inclusion through
personnel, new initiatives, and inclusive recruitment to enhance
workplace culture.
– Engagement surveys to enhance workplace culture and
employee engagement.
– Ongoing refinement of processes to improve the overall
employee journey, enhance engagement, the quality of feedback
and subsequent actions.
– Integration of values and behaviours into all our core colleague
priorities including objectives, performance management,
appraisals, talent attraction, selection and development,
leadership development and onboarding.
– Training, including anti-bribery and corruption training, which
continues to be delivered across our business units based on
assessed risk.
Customer needs
Risk description
Risk context
Management and mitigation
If we fail to anticipate,
understand and deliver
against the capabilities and
experiences our current and
future customers need in a
timely manner, they will find
alternative providers.
Link to strategic priorities
Direction of travel –
As THG continues to grow
its business and brand,
an understanding of how
to continually attract new
customers while retaining our
existing customers is essential.
This requires a deep and
continuous flow of insights
supported by processes and
systems. By understanding the
needs of our customers, THG
will continue to differentiate
itself from competitors, build
compelling value propositions
and offers, use key drivers to
identify opportunities, decrease
churn and generate revenue
more effectively.
– Continuous Net Promoter Score (“NPS”) surveying allows THG
to identify customer challenges rapidly and respond in a timely
manner to emerging trends.
– Customer service levels and complaints are monitored, and
internet sites are reviewed for customer opinion.
– Use of customer activity data and insights (across acquisition,
retention, churn and satisfaction) to be more targeted and
strategic in how we gain new customers and maximise the loyalty
and lifetime value of existing customers.
– Developments in ecommerce trends are monitored through
industry horizon scanning, competitor analysis and benchmarking
to keep abreast of the latest developments and innovations.
– Highly competent buyers and merchandisers are adept at
interpreting and acquiring desirable brands.
– Investment in delivery, marketing, brand, customer experience and
growing our retail proposition to keep our customer appeal.
– Managed international customer service – 24/7 customer service
for a global audience across live chat, calls, email and social.
– Demand forecasting process and continuous monitoring of
availability to adjust intake accordingly.
– Innovation informed through demand insights, consumer data and
feedback from our global retail customer base.
– A fully vertically integrated business model, with full control over
new product development, branding and design capabilities,
which significantly reduces development timelines.
– Collaboration with partners to complement and enable
accelerated innovation.
THG Ingenuity reliance
Risk description
Risk context
Management and mitigation
If THG Ingenuity fails to
maintain service levels,
it will impact our ability
to meet demand, attract
customers and deliver on
our strategy.
Link to strategic priorities
Direction of travel –
THG is reliant on THG Ingenuity
for providing platform hosting,
warehouse fulfilment, courier
services and marketing services’
which underpin the ecommerce
offering. Any interruption to
these services could have a
profound impact and could
result in significant financial
liabilities and losses.
– Service-level agreements including uptime, responsiveness and
mean time to repair objectives.
– Comprehensive disaster-recovery and business-continuity plans
within THG and THG Ingenuity.
– Robust change-management processes and incident
management protocols adhered to for all products and services.
– Contract management and validation of compliance with
long‑term agreements and transitional services agreements.
– Assurance through internal and external compliance auditing.
Talent
Risk description
Risk context
Management and mitigation
If we fail to attract at pace,
and/or retain employees
with the critical skills,
capabilities, motivation and
capacity we need to deliver
on our strategy, we will not
be successful.
Link to strategic priorities
Direction of travel –
As we continue to evolve
our priorities, the capacity,
knowledge and leadership skills
we need will continue to change.
THG will not only need to attract
the talent and experience
required to help navigate this
change, we will also need to
provide an environment where
employees can develop to meet
these new expectations; an
environment where everyone
can perform at their very best.
By continuing to empower
employees and leaders to
make decisions, be innovative
and be bold in meeting our
commitments, THG will continue
to create an attractive working
environment, increasing
employee engagement and
aligned high-performing teams.
– Reviews of our remuneration requirements and mechanisms
designed to incentivise and drive the right behaviour, with a focus
on ensuring fair and equitable pay across the business.
– Focused development of key staff, through specific learning and
development tools, to ensure they create the environment that
enables colleagues to thrive and perform at their very best.
– Refinement of job architectures to create greater visibility of
critical talent and support our succession planning.
– Benchmarking of existing employee remuneration and benefits
using third-party industry data.
– Our people policies, updated in line with legislative changes,
outline our approach and commitments, detailing the
expectations for managers, the leadership team and all
colleagues.
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Risk management and informed decision-making continued
Principal risks continued
Infrastructure, supply chain and critical partners
Risk description
Risk context
Management and mitigation
If we fail to maintain our
infrastructure, wider supply
chain and critical partners,
this will impact our ability
to meet demand, attract
customers and deliver on
our strategy.
Link to strategic priorities
Direction of travel –
THG places reliance on its
worldwide infrastructure and
partners across the supply
chain globally.
Any interruption to these
services or relationships could
have a profound impact and
could result in significant
financial liabilities and losses.
– Oversight by projects teams to support and monitor
transformation programmes, including management of
programme risks and dependencies.
– Business continuity strategies, including dual sourcing for
most supply categories and in all business units, reducing
dependencies on sole suppliers.
– Comprehensive disaster-recovery and business-continuity plans
in place.
– Continuous monitoring of supply chain activity and news through
advanced web-scraping functionality.
– Continuous monitoring and forecasting of demand and
availability to adjust intake accordingly.
– Extensive and up-to-date knowledge of supplier base to ensure
we can scale our supply chain appropriately and quickly.
– Assurance on our key third-party suppliers and service providers
through internal and external compliance auditing.
– Ongoing development of global site standards and monitoring of
our third parties to ensure adequate standards are maintained.
– Contract life cycle management.
Climate change, environmental and social responsibility
Risk description
Risk context
Management and mitigation
Failure to achieve our
sustainability-related aims,
objectives and obligations
will impact our ability to
deliver our Sustainability
Strategy and result in
us failing to meet our
regulatory obligations
and public commitments,
losing the trust of our
stakeholders.
Link to strategic priorities
Direction of travel –
We invest in our people,
partners, technology and
communities to give individuals,
businesses and our planet the
opportunity to thrive. Our vision
is to act as a force for good in
leaving the world a better place
than we found it.
If we do not act on climate
change, associated
governmental actions and
energy transition could disrupt
our operations and increase
our costs.
– External third-party assurance of our operational energy and
emissions data.
– Oversight from our team of sustainability experts, the ESG
Working Group and independent oversight from the Sustainability
Committee.
– THG Supply Chain Standards outline the minimum expectations
for our suppliers.
– Our policy on human rights, including our Modern Slavery
Statement, outlines our approach and commitments, detailing
the expectations for managers, the leadership team, and all
colleagues.
– Multiple workstreams designed to respond to specific risks and
opportunities as part of our Sustainability Strategy.
– Climate-impact modelling in line with TCFD recommendations to
identify and manage the climate-related risks and opportunities
THG is exposed to.
– Sustainability data platform ensures regulatory compliance and
performance measurement.
Health and safety
Risk description
Risk context
Management and mitigation
Failure to implement
and monitor appropriate
policies and procedures
and support a continually
improving safety culture
across all parts of the
business could lead to
accidents or incidents
resulting in loss of life or
serious injury.
Link to strategic priorities
Direction of travel –
Health and safety is of
paramount importance, and THG
must provide a safe environment
for all stakeholders.
Failure to implement and
monitor stringent health and
safety procedures and policies
across all parts of the business
could lead to accidents or
site-related incidents, resulting
in loss of life or serious injury
to employees, subcontractors,
visitors, customers or members
of the public.
Our global footprint and evolving
infrastructure further compound
this risk.
– Oversight from our Health, Safety and Environment (“HSE”)
professionals both in the UK and internationally, with oversight
by the Board and regular review of safety reports and safety
performance.
– Global HSE Strategy and roadmaps aligned to risk and
risk appetite.
– Regular and documented engagement and training across
the Group.
– Clear, effective and regular communications of all relevant safety
updates.
– Ongoing updates to our risk assessments and safe systems of
work by trained and competent staff to raise awareness and
knowledge.
– Health and safety compliance reviews are an established part
of the annual assurance plans provided by both our second and
third lines of defence.
– Our health and safety management policies outline our approach
and commitments, detailing the expectations for managers, the
leadership team and all colleagues.
Legal and regulatory compliance
Risk description
Risk context
Management and mitigation
Failure to anticipate,
understand and implement
our legal and regulatory
requirements will result
in us failing to meet our
obligations, impacting
our ability to deliver our
strategy and losing the
trust of our stakeholders.
Link to strategic priorities
Direction of travel –
We continue to operate
in a global market with
numerous legal and regulatory
requirements. Remaining aware
of changing regulation, and
ensuring compliance, is key to
ensuring we protect THG and
our customers and partners.
– Defined risk-appetite metrics and key risk indicators which are
monitored and updated at each Risk Committee meeting.
– Oversight from our extensive team of legal and regulatory
compliance experts.
– Emerging risk processes, including horizon-scanning, to
anticipate potential changes in the legal and regulatory
landscape.
– Legal and regulatory compliance reviews are an established
part of the annual assurance plans provided by our third line
of defence.
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Risk management and informed decision-making continued
Principal risks continued
Product safety and quality
Risk description
Risk context
Management and mitigation
Failure to manufacture and
provide safe, compliant
and quality products
to our consumers may
prevent them from making
informed purchasing
decisions, compromise
their safety and result
in us failing to meet our
obligations, negatively
impacting our brand and
reputation.
Link to strategic priorities
Direction of travel –
Ensuring the ongoing quality and
safety of our product portfolio
is vital for our brands and our
reputation.
The quality and safety of the
products within our portfolio
are at risk of becoming
compromised at any stage
in the supply chain if we fail
to adequately monitor the
associated processes.
– Product safety and quality is established in our processes and
controls, from product design to customer.
– Product safety, quality and regulatory compliance training
programme for all relevant employees.
– Oversight from our extensive team of product quality, regulatory
compliance and technical experts across each of the markets we
operate in.
– Rigorous testing and regularly monitoring performance indicators
that support improvement activities.
– Regular monitoring and quality controls over material received to
ensure that it meets THG product safety and quality standards.
– Activation of incident management teams in the event of an
incident relating to the safety of our consumers or the quality of
our products.
– External certification and auditing of key suppliers and other third
parties consistent with our own standards and risk appetite.
Geopolitical and economic uncertainty
Risk description
Risk context
Management and mitigation
Failure to anticipate,
understand and
successfully respond to
changes in geopolitical and
economic uncertainly on
a timely basis may impact
our ability to meet our
strategy.
Link to strategic priorities
Direction of travel –
Adverse changes to economic
conditions could affect one or
more countries and result in
reduced customer spending,
higher interest rates, adverse
inflation in our cost base,
adverse FX movements and
limited debt refinancing options.
All the above could negatively
affect our operating cash flow.
– Diverse product portfolio and geographic reach that mitigates our
exposure to any localised risks and uncertainties.
– Adaptable portfolio of existing products and an ability to develop
new products that suit consumers’ and customers’ changing
needs when economic conditions change.
– An ability to respond to the inflationary pressures on both inputs
and product pricing.
– Financial resilience and liquidity with significant cash on hand at
year end and our undrawn revolving credit facilities.
– Regular reforecasting of business results and cash flows, and
rebalancing of investment priorities where necessary.
– Currency and interest rate hedging arrangements in line with the
Group’s Treasury Policy.
Liquidity and funding
Risk description
Risk context
Management and mitigation
Failure to adequately
manage our cash, debt
and overall liquidity and
funding requirements over
the short, medium and
long term could negatively
impact our ability to deliver
our strategy.
Link to strategic priorities
Direction of travel –
Our ability to generate and
manage our cash, control
expenditure and other expenses
underpins our ability to repay
debt and fund working capital
investment.
– Maintenance of cash reserves and equivalents, together with
access to undrawn revolving credit facilities.
– Broader working capital management to continually improve
cash flow and reduce reliance on bank facilities, while meeting
our risk-appetite metrics.
– Frequent engagement and dialogue with the market and rating
agencies.
– Through our Profit Improvement and Capex Committees, there is
ongoing scrutiny and challenge of discretionary expenditure and
capital spending.
– Treasury operations are managed and monitored in line with a
Board-approved Treasury Policy.
– Close monitoring and stress-testing of projected cash, debt
capacity and overall liquidity, including sensitivity analysis, to
assess the impact of the changing economic environment.
Assessment of the going
concern assumption
The business has maintained a strong
liquidity position throughout the year.
As at the balance sheet date, the Group
had a total of £150m in an undrawn
Revolving credit facility (“RCF”), along with
£309m readily available cash held on the
balance sheet (note this excludes the cash
that left the Group following the demerger
of THG Ingenuity).
Net debt at 31 December 2024 was
£346m (31 December 2023: £563m),
with net debt of £304m (£215m on a pre
demerger basis adjusting for the cash held
within THG Ingenuity) (31 December 2023:
£218m) before the inclusion of IFRS 16
lease liabilities that mature over a period of
up to 25 years.
Post year end, On 4 April 2025 the
Company announced the completion
of its debt refinancing through to 2029.
As part of a plan to delever, an ‘amend
and extend’ refinancing was agreed that
reduced the Term Loan B from €600m to
€445m with maturity extended by three
years to December 2029. The Term Loan
A was partially repaid with a final stub
of £35m maturing in October 2025. The
undrawn RCF totals £150m and has also
been extended to 2029. The reduction
in facilities was partially funded by the
equity placing and equity raise referred to
above. The demerger of THG Ingenuity will
materially reduce the cash outflows of the
Company with substantial reductions in
lease commitments (c. £20m per annum)
and capex requirements, which in turn
mean that the Group requires smaller
banking facilities.
Additional liquidity was also obtained
through asset backed lending facilities.
There are no key covenants attached to
the Term Loan B or Term Loan A facilities
which are drawn down. Covenants
attached to the RCF are linked to net
debt leverage and only become effective
when the facility is drawn above 20%,
which is not anticipated to occur on test
dates (biannually).
This covenant requires the Group to
maintain the ratio of net debt over
adjusted EBITDA to below 4.50 – 3.50
(over the course of the term), which is
reviewed regularly, although as noted the
facility is not drawn. This facility provides
the Group liquidity optionality to manage
seasonal working capital movements.
These covenants are effective from
31 December 2025, prior to this the
existing covenants remain in place (gross
debt over adjusted EBITDA below 7.60
only in respect of the RCF).
The going concern assessment period
is the twelve months from the date of
this report to 30 April 2026. In order to
satisfy the going concern assumption,
the Directors of the Group review its
Budget periodically, which is revisited
and revised as appropriate in response to
evolving market conditions. The Directors
have considered the Budget and forecast
prepared through to 30 April 2026.
Refer to the Viability statement for
further information on the stress test
scenarios that have been applied to the
Group’s forecast.
Going concern statement
As a result of the analysis performed,
including potential severe but plausible
downside scenarios, the Board believes
that the Group is able to adequately
manage its financing and principal
risks and that the Group will be able to
operate within the level of its facilities
and meet the required covenants for the
going concern assessment period. Based
on the above activity, the Directors are
satisfied that it is appropriate to prepare
the financial statements of the Group on
a going concern basis.
Viability statement
The Directors have voluntarily adopted
the UK Corporate Governance Code,
in which the Directors are required to
issue a Viability Statement declaring
whether they believe the Group is able
to continue to operate and meet its
liabilities for the period to December
2027, taking into account its current
position and principal risks. The Directors
assessed the prospects of the Group
by reference to its current financial
position, its recent and historical financial
performance, its forecasts for future
performance, its business model (pages
3, 8 and 9, 14 to 23), strategy (pages
10 and 11) and its principal risks and
mitigating factors (pages 74 to 81).
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Viability assessment period
In considering the viability of the Group,
the Directors felt that an appropriate
period of time was the three-year
period between 31 December 2024 to
December 2027 over which to assess
the Group’s prospects. This is consistent
with the Group’s business model and
strategic planning period approved by the
Board. A roll forward from the three year
assessment period is performed for the
purposes of impairment.
The Group has applied financial
modelling to the assessment of going
concern and viability to assess the base
case and apply stress testing.
The base case
The Group’s strategic planning cycle
includes an annual Budget process,
which is reviewed by the Board. This
planning process involves modelling
under a series of assumptions. Severe
but plausible downside scenarios were
also modelled setting out impacts of a
combination of the principal risks, as
well as a reverse stress test to identify
what would be required to either breach
covenants or run out of liquidity. This
process is led by the Group CFO and
Deputy Group CFO along with the Board
and Chair and CEO providing further
direction to align strategic initiatives.
Forecasts have been prepared on a
divisional level. The Directors of the
Group review its Budget periodically,
which is revisited and revised as
appropriate in response to evolving
market conditions.
In considering the Group’s financial
position the Directors have considered:
– Expected future growth of trading
businesses;
– Margins expected to be achieved in
the future; and
– Wider market and industry specific
factors.
There is sufficient liquidity throughout the
forecast period in respect of the base
case. This is even before any mitigating
actions which could be implemented
by management and excludes a full
drawdown of the RCF facility.
Stress tests
Several stress test scenarios have been
applied to the Group’s forecast, including
but not limited to:
– THG Beauty revenue declines by 10%;
and
– THG Nutrition revenue declines by 15%.
A severe but plausible downside
modelled the impact of all scenarios
above occurring simultaneously.
From this scenario, the Directors have
assessed two key metrics to ensure that
the Group has the ability to continue
to trade, alongside complying with its
banking facilities.
– Cash headroom: The Group’s forecast
shows material cash headroom, that
management are confident give the
Group the ability to continue to trade
and capitalise on market opportunities
as they develop; and
– Leverage (defined as net
debt/adjusted EBITDA). If the Group
was to draw over 20% of its currently
undrawn RCF, it would be required to
maintain a leverage ratio of less than
4.50 – 3.50 times at the testing dates
of 30 June and 31 December. The
forecasts reviewed suggest that while
the facility is not required, if it were
there would be enough headroom to
satisfy this covenant.
The Directors note that while the wider
global economy is suffering as a result
of high inflation and various global
recessions, the Group has a number
of mitigating actions available to it
such as reducing its fixed cost base,
reducing stock levels and reduction in
new customer marketing investment
which are not factored in to the scenario
above but would provide additional
cash headroom in the event of a further
declining in sales and depressed
margins.
Reverse stress test
A reverse stress test was modelled to
identify the point at which liquidity is
exhausted. The model would have to
see a significant decline in revenue and
margins compared with the stress test
set out above.
Such a scenario, and the sequence
of events which could lead to it, is
considered to be extremely remote.
Whilst the occurrence of one or more of
the principal risks has the potential to
affect future performance, none of them
are considered likely either individually
or collectively to give rise to a trading
deterioration of the magnitude indicated
by the reverse stress testing and to
threaten the viability of the Group over
the assessment period.
Assessment of viability
In making the Viability Statement,
the Board, supported by the Audit and
Risk Committees, carried out a robust
assessment of the Group’s viability,
principal risks and uncertainties
facing THG for the next three years, as
described on pages 74 to 81, which could
impact the business model taking into
account:
Factor
Stress test scenarios involving a
depression in revenue and margins within
THG Nutrition and THG Beauty have been
run together to show an unlikely but
plausible worst case downside scenario
including an assessment of the Group’s
longer‑term prospects. We anticipate
that these scenarios would include any
further uncertainties that may come from
the impact of the current macroeconomic
with high inflation and various global
recessions.
Link to principal risks
Note associated potential impacts were
considered within the following principal
risks review.
The worst case scenario outlined above
did not include any mitigating actions
available. There are a number of actions
that management would take to protect
working capital and strengthen the
balance sheet if any of the scenarios
outlined above were encountered as
included above (See Stress test).
Based upon the assessment of the
sensitivity built into the scenarios tested,
the Directors confirm that they have a
reasonable expectation that the Group
will be able to continue in operation to
meet its liabilities as they fall due over
the period, up until December 2027.
This includes the repayment in full of the
Term Loan A banking facility (£35m due
in Q4 2025).
Approval of Strategic Report
This Strategic Report was approved and
issued by the Board and signed on its
behalf by
Matthew Moulding
Executive Director and
Chief Executive Officer
28 April 2025
Risk management and informed decision-making continued
Governance
Contents
84
Corporate Governance Report
94
Audit Committee Report
100
Risk Committee Report
102
Nomination Committee Report
106
Related Party Committee Report
108
Sustainability Committee Report
110
Directors’ Remuneration Report
124
Directors’ Report
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Governance
Financial Statements
Additional Information
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THG PLC Annual Report and Accounts 2024
Governance
Code compliance
The Board recognises the importance
of strong corporate governance and
the value of establishing a robust
governance framework which underpins
the successful delivery of the Group’s
strategic aims and objectives.
Accordingly, since Admission and prior
to its transfer to the ESCC category, the
Company elected to report against the
2018 Code despite its application being
mandatory for only those companies
with an ESCC-category classification
(previously premium-listed issuers).
With the exception of one
departure which was rectified when
non‑independent NED Iain McDonald
stood down from the Board in
March 2024, the Company complied
in full with the 2018 Code during the
reporting period (as detailed within
the Corporate Governance Statement
which follows). Upon this Board change,
an equal balance of independent and
non‑independent Directors (excluding the
Independent Chair) was achieved and, in
turn, alignment with Code Provision 11.
Board composition
As anticipated, the search to identify
suitable candidates to further enhance
Board composition remained a key
priority of the Nomination Committee
(and the Board collectively) throughout
2024, with an ongoing focus on the
need to ensure that the Board is, at
all times, appropriately constituted to
drive long‑term, sustainable growth
through delivery of the Group’s strategy
(with specific reference to its collective
balance of skills, knowledge and
experience).
Accordingly, and as highlighted in last
year’s Corporate Governance Report, not
only must we identify potential Board
candidates who demonstrate the broader
knowledge and experience expected
of plc directors, but such candidates
must possess the necessary skill sets to
both oversee the successful delivery of
THG’s strategic aims and objectives and,
more generally, support its ongoing plc
evolution.
As I have previously confirmed, the
ongoing review and enhancement of our
Board membership must therefore be a
planned, ordered and sequential process,
which ensures both the continuity of
Board effectiveness and the successful
recruitment of candidates who satisfy
the aforementioned criteria.
The promotion of diversity also
remains a key consideration in all
Board appointments, as evidenced
by the search parameters of the NED
recruitment exercise which took place
during 2024. While discussed in further
detail within the Nomination Committee
Report, the search criteria reflected
the importance of promoting diverse
and inclusive Board membership and
recognised that further progress was
required to achieve full compliance with
the FCA’s diversity targets and also meet
the Group’s own EDI goals.
Following non-independent NED Iain
McDonald stepping down from the
Board on 31 March 2024, and John
Gallemore resigning from the Board
and as COO with effect from completion
of the demerger of THG Ingenuity on
2 January 2025, we were delighted
to welcome Milyae Park onto the
Board as an independent NED on
28 January 2025.
Milyae is regarded as a key addition to
our leadership team and it is particularly
pleasing that upon making this
appointment the Company achieved
full compliance with the FCA’s diversity
targets i.e. from 28 January 2025 and up
to the date of this Corporate Governance
Report, one of our four senior Board
positions has been held by a woman
(noting that Sue Farr has been the SID
since her appointment to the Board
on 24 April 2023), over 40% of the
individuals on our Board are women and
the Board now comprises one Director
from a minority ethnic background.
Further information on these Board
changes can be found within this
Corporate Governance Report and the
Nomination Committee Report.
The year ahead
We consider that the governance
and Code improvements which took
place during 2024 both reinforce the
Company’s stated commitment to evolve
its governance framework and practices
and evidence the significant progress
which has been made by the Company
in the period since Admission.
However, noting that the Company has
only recently transferred to the ESCC
category, there will be a continued focus
on reviewing and enhancing, where
appropriate, corporate governance
arrangements within the organisation
to ensure the Board’s commitment to the
principles of good corporate governance
is appropriately upheld and THG’s
governance framework remains suitably
mature and robust for a company
included within the FTSE UK Index Series.
Such arrangements will also be viewed
through the lens of the new 2024
Code which is applicable to the current
financial year and subsequent years.
Notably, updated Terms of Reference
for each of our Board Committees were
approved by the Board in December
2024 and adopted with effect from
1 January 2025, reflecting the provisions
of the 2024 Code and the associated
FRC guidance.
We once again look forward to
welcoming and meeting with
Shareholders at the forthcoming AGM,
details of which can be found within the
Notice of Meeting. We consider this a key
opportunity to engage with our primary
stakeholder base and a suitable forum
within which ongoing and constructive
dialogue can take place.
Charles Allen
Lord Allen of Kensington. CBE
Independent Chair
28 April 2025
Corporate
Governance Report
Dear Shareholders,
Welcome to the Company’s Corporate Governance Report
for the 2024 financial year.
When I joined THG in March 2022 I was given a clear mandate
to improve governance and transparency and strengthen the
Board by enhancing its independence and diversity. While
we are pleased with the significant progress which has been
made in these areas, and the other corporate governance
enhancements which have been implemented, we recognise
that we must continue to monitor the Company’s governance
framework to ensure its evolution is appropriate for an
organisation of the size, nature and stage of development
of THG.
Indeed, in the lead up to the Company’s transfer to the
ESCC category of the Official List on 6 January 2025, the
Company’s governance infrastructure was subject to detailed
consideration to ensure the appropriate arrangements were in
place to support the transition from its voluntary adherence to
certain ESCC-category standards of corporate governance to
compulsory adherence.
Corporate Governance
Statement
The Company recognises the value
of committing to the principles of
good corporate governance and
establishing a robust governance
structure which supports the
long‑term growth and development
of the Group and promotes
sustainable value creation for
Shareholders. Therefore, in the
period between Admission and the
UK listing regime reforms coming
into effect on 29 July 2024 (the
“Effective Date”), the Company
elected to report against the 2018
Code despite this being mandatory
for only premium‑listed issuers.
On the Effective Date the Company
automatically migrated from its
standard-listed classification into
the new Transition category of the
Official List and continued to monitor
its compliance against the 2018 Code
on an elective basis. On 6 January
2025 the Company transferred to
the ESCC category of the Official List,
at which point reporting against the
2024 Code became mandatory.
The Company complied in full with
the 2018 Code during 2024, aside
from a departure from Code Provision
11 in the period from 1 January 2024
to 31 March 2024 when only four
of the nine Directors then in office,
excluding the Independent Chair (as
required by the Code), were deemed
to be independent. However, this
Code departure was rectified when
non‑independent NED Iain McDonald
stepped down from the Board on
31 March 2024.
As at 31 December 2024, and in
alignment with Code Provision 11,
at least half the Board, excluding
the Independent Chair, were
independent NEDs i.e. Gillian Kent,
Dean Moore, Sue Farr and Helen
Jones. This remains the position
as at the date of this Corporate
Governance Report, with independent
NED Milyae Park also having joined
the Board on 28 January 2025 (and
noting that John Gallemore resigned
from the Board and as COO on
2 January 2025).
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
Charles Allen, Lord Allen of Kensington, CBE, Independent Non‑Executive Chair
Matthew Moulding, Executive Director & CEO
Damian Sanders, Executive Director & CFO
Sue Farr, SID
Charles has a depth of corporate experience across a number of
sectors, including finance, media, hospitality and retail, and, having
played a key role in the creation of ITV, is recognised for his significant
contribution to the television industry. Previous positions include chief
executive of Granada Group plc and ITV plc and chair of Granada Media
plc, EMI Music, Endemol and The British Red Cross. Charles has also
served on the boards of Tesco plc, Virgin Media and Get AS and as a
senior adviser to Goldman Sachs and chief adviser to the Home Office.
Charles was vice chair of the London 2012 bid company, non-executive
director of the London Organising Committee of the Olympic and
Paralympic Games and chair of the 2002 Manchester Commonwealth
Games. In 2002 he was awarded a CBE for his services to Sport and
Community and in 2012 he was appointed a Knight Bachelor for his
services to the 2012 Olympic and Paralympic Games. Charles received
the Freedom of the City of London in 2006 and in 2013 was awarded a
peerage and now sits on the Labour benches.
Matthew has been instrumental in THG’s growth, leading its evolution
from an entertainment reseller to a global ecommerce technology
group. Prior to founding THG, he served an eight-year term as chief
financial officer of 20:20 Mobile (the Distribution Division of the
Caudwell Group) before leading its sale to private equity for £365m.
Matthew studied Industrial Economics at the University of Nottingham
before qualifying as a chartered accountant with Arthur Andersen in
1998. His deep ecommerce knowledge and insight, combined with
his proven entrepreneurial skills, ensure Matthew is well-positioned
to drive THG’s strategic direction and objectives while working in
alignment with its Shareholder base.
Damian is a member of the Institute of Chartered Accountants in
England and Wales and was a Senior Audit Partner at Deloitte LLP
for over 20 years. He has extensive knowledge of the retail and
technology sectors and has acted as an adviser and corporate
governance specialist to a number of international listed companies.
Damian brings considerable expertise to the Board across audit,
accounting, commercial and risk matters and also business strategy.
His strong financial background, depth of advisory experience and
knowledge of the Group acquired during his two-year tenure as a NED,
including serving as interim SID and as a chair/member of various
Board Committees, make him well qualified to serve as CFO.
Having enjoyed an executive career spanning a number of senior
marketing and communication positions in both agency and private
and public sector organisations, Sue brings comprehensive marketing,
branding and corporate communication knowledge and expertise to the
Board. Former roles include Marketing Director at the BBC, Corporate
Affairs Director at Thames Television, Communications Director at
Vauxhall Motors and director of Chime Communications plc. Sue has
previously served as senior independent director of British American
Tobacco p.l.c. and as a non-executive director of Accsys Technologies
PLC, Dairy Crest plc, Lookers plc, Millennium & Copthorne Hotels plc and
New Look. She is also a former trustee of the Historic Royal Palaces and
former chair of both The Marketing Society and the Marketing Group of
Great Britain. Sue was awarded an Honorary Doctorate by the University
of Bedfordshire in 2010.
Read full
biographies
Our Board
A
Audit
N
Nomination
RP
Related Party
Rem
Remuneration
R
Risk
S
Sustainability
Board Committee membership key:
Edward Koopman, NED
Gillian Kent, Independent NED
Dean Moore, Independent NED
Helen Jones, Independent NED
Milyae Park, Independent NED
Edward was a founding partner of Electra Partners/Cognetas Private
Equity (now known as Motion Equity Partners LLP) and previously a
Manager at Bain & Company, having worked in investment banking
at both Baring Brothers and BNP Paribas. He is a member of the
Leadership Council of Sofina, a family-controlled investment company
listed on Euronext Brussels, investing patient capital in growing
companies. Edward holds a degree from Ecole de Management de
Lyon (“EM Lyon”) Business School and brings a wealth of knowledge
to the Board through his international business experience and
well‑honed management skills.
Gillian has had a far-reaching career in software, internet, digital media
and mobile technology businesses and formerly held various senior
roles at Microsoft, including Managing Director MSN UK. Both here
and in other roles, including as chief executive officer of the real estate
portal Propertyfinder, she established her expertise in building markets
and brands for products and services. Gillian previously served as a
non-executive director of Ascential plc, NAHL Group PLC, Pendragon
PLC and Dignity plc and as a director of Portswigger Ltd., a leading
software solution company within the web security industry. Gillian’s
expansive executive career and broad plc experience serve to enhance
the knowledge base and overall skill sets of the Board.
Dean is a chartered accountant and, with over 35 years of public
company experience, brings a depth of City and finance knowledge
to the Board, together with significant expertise in the financial
services and retail sectors. Dean was previously chief financial
officer of N Brown Group plc, T&S Stores PLC and Graham Group plc;
interim chief financial officer of Cineworld Group plc and Dignity plc;
senior independent director of Cineworld Group plc and Volex plc;
and non‑executive chair of Tuxedo Money Solutions Limited. Dean
is a skilled and experienced financial professional who possesses
wide‑ranging technical, business and people expertise which is
founded upon a commercially oriented outlook.
Helen has enjoyed a successful executive career building premium
food and beverage brands across FMCG, retail and multi-site
hospitality, gaining over 35 years of invaluable marketing, branding
and operational experience in consumer-focused businesses. Former
positions include senior independent director of the Halfords Group
plc and vice chair of the Ben & Jerry’s Independent Board of Directors
USA, a role she undertook after having led the expansion of the
brand across Europe with Unilever. Helen brings a wealth of business
transformation and people/customer-centric skills to the Board,
underpinned by a results‑focused approach.
Milyae has extensive experience in the consumer, retail, technology
and financial services sectors, having worked as both an executive and
adviser in digital and commercial transformation and growth in more
than 40 countries. After an early career as a qualified accountant with
PwC in Silicon Valley, Milyae joined Goldman Sachs on Wall Street as an
investment banker. She subsequently moved to Accenture where she
became a Partner in its EMEA M&A and Strategy practice, before serving
as both a Business Development Director and a Commercial Director at
Tesco, latterly joining Marks & Spencer as the Director for Europe. Milyae
is a former Governor of the London Museum and the former chair of its
Trading Board. Milyae holds an MBA from Wharton.
Date of appointment
22 March 2022
Key external appointments
– Chair of Balfour Beatty plc
– Chair of Classic FM
– Chair of the Invictus Games Foundation
– Senior non-executive director of Global
Media & Entertainment Limited
– Advisory chair of Moelis & Company
Board Committee membership
N (Chair)
Date of appointment
24 June 2008
Key external appointments
None
Board Committee membership
n/a
Date of appointment
24 January 2023 (having previously served as
an independent NED from 17 November 2020)
Key external appointments
– Senior independent director of Victorian
Plumbing Group plc
Board Committee membership
n/a
Date of appointment
24 April 2023
Key external appointments
– Non-executive director of Helical plc
– Non-executive director of Ebiquity plc
Board Committee membership
A N RP (Chair) Rem R S (Chair)
Date of appointment
3 May 2016
Key external appointments
– Director of Sofina Capital
– Director of Nuxe Group
– Director of Grupo Proeduca
Board Committee membership
n/a
Date of appointment
15 September 2022
Key external appointments
– Non-executive director of Marlowe PLC
– Non-executive director of Mothercare plc
– Non-executive director of SIG plc
Board Committee membership
A N RP Rem R (Chair)
Date of appointment
15 September 2022
Key external appointments
– Interim chief financial officer of De La
Rue plc
– Non-executive director of Griffin Mining
Limited
Board Committee membership
A (Chair) RP Rem R
Date of appointment
21 June 2023
Key external appointments
– Non-executive director of Fuller, Smith &
Turner PLC
– Non-executive director of Premier Foods plc
– Non-executive director of Virgin Wines UK plc
Board Committee membership
A RP Rem (Chair) R
Date of appointment
28 January 2025
Key external appointments
– Non-executive director of Alliance Witan PLC
– Non-executive director of Fidelity European
Trust PLC
– Non-executive director of Faber and Faber Ltd.
Board Committee membership
n/a
Corporate Governance Report continued
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
Corporate Governance Report continued
Governance overview
The primary role of our Board is, as detailed within the Code, to promote the long-term, sustainable success of the Company,
generating value for Shareholders and contributing to wider society. This responsibility underpins all Board discussions and
decision‑making processes and is one which the Board seeks to discharge through the successful delivery of the Company’s
strategic priorities which, in turn, derive from its stated purpose “to create iconic retail experiences in the beauty, health and wellness
markets”. This purpose, determined with reference to the diversity of the Company’s stakeholder base, has been articulated to guide
a strategy which aims to deliver long-term, sustainable growth, while promoting environmental and social responsibility.
The Board oversees THG’s strategic aims and objectives and promotes an entrepreneurial and values-led culture which is predicated
upon the core values of ambition, collaboration, innovation, decisiveness and leadership, which, collectively, have been formulated to
support the successful delivery of the Company’s strategic priorities. Further information on THG’s culture and its purpose, vision and
values can be found within the ‘Our purpose, vision and values’ and ‘Our people’ sections of the Strategic Report.
To ensure the most robust governance framework exists within the Group to support the Board in the proper and effective discharge
of its core function, a Board-constituted Nomination Committee, Audit Committee and Remuneration Committee were established at
the time of Admission, together with a Related Party Committee, Sustainability Committee and Risk Committee (the latter two being
established during 2021). Further information on the role, composition and activities of each of these Board Committees can be found
within the respective Board Committee Report.
The Company’s governance structure during 2024 was as follows (and remains so as at the date of this Corporate Governance Report):
Board responsibilities
As required under the Code, a formal Schedule of Matters Reserved to the Board (“Schedule of Reserved Matters”) has been
published on the Company’s corporate website detailing the Board’s key responsibilities and those items of business (including
certain strategic, financial reporting and corporate and capital structure matters) which are expressly reserved for the Board’s
collective consideration, oversight and/or approval (as appropriate).
Under the terms of this Schedule of Reserved Matters, ultimate responsibility for the management of risk within the Group rests
with the Board which is required to, amongst other matters, monitor the Group’s risk management and internal control systems
(including financial, operational and compliance) and, at least annually, review their effectiveness.
In discharging such risk management responsibilities (which also include approving organisational risk appetite statements and
undertaking a robust assessment of the principal and emerging risks facing the Group), the Board was supported during 2024
by the Audit Committee and the Risk Committee (the activities of which are contained within the respective Board Committee
Reports).
Full details of the Group’s risk management framework, risk appetite and risk identification process (including in respect of
principal and emerging risks and the management/mitigation thereof) can be found within the ‘Risk management and informed
decision making’ section of the Strategic Report. This section includes confirmation that, during 2024, the Board (assisted, as
appropriate, by the Audit Committee and the Risk Committee) reviewed the effectiveness of the risk management framework and
internal control systems and identified no instances of significant control failings or weaknesses.
Board
Chair: Charles Allen
Remuneration
Committee
Chair:
Helen Jones
Sustainability
Committee
Chair:
Sue Farr
Executive Leadership Team
– Executes delivery of agreed strategic objectives
– Oversees the day-to-day management of Group operations
– Provides regular Board updates on operational performance
Audit
Committee
Chair:
Dean Moore
Related Party
Committee
Chair:
Sue Farr
Nomination
Committee
Chair:
Charles Allen
Risk
Committee
Chair:
Gillian Kent
Independent Chair
Charles Allen
– Provides leadership to the Board
– Facilitates constructive Board relations and the effective
contribution of all NEDs
– Chairs Board meetings and promotes a culture of openness
and debate
– Ensures effective and ongoing communication with
Shareholders and other stakeholders
– Sets the agenda for Board meetings, in conjunction with the
Company Secretary, and ensures Directors receive accurate
and timely information
Chief Executive Officer
Matthew Moulding
– Provides leadership to the Executive Leadership Team and
Senior Management
– Oversees the day-to-day management of Company and
Group business
– Determines the strategic direction and business objectives
of the Group
– Oversees the effective implementation of Group strategy,
with the support of Senior Management
– Engages with key Shareholders and stakeholders
SID
Sue Farr
– Acts as a sounding board for the
Chair and supports, as required, in
the discharge of their duties and
responsibilities
– Acts as an intermediary for the
Directors as and when necessary
– Available to Shareholders with
concerns which have not been
resolved through the normal
communication channels
– At least annually, meets with the
NEDs, in the absence of the Chair, to
appraise the Chair’s performance
Chief Financial Officer
Damian Sanders
– Responsible for the Group’s financial matters and
applicable legislative and regulatory compliance
– Works with the CEO to develop strategic objectives
– Monitors the Group’s financial performance
– Ensures the Group remains appropriately funded and the
capital structure is effectively managed
NEDs
Edward Koopman, Gillian Kent, Dean
Moore, Helen Jones and Milyae Park
– Provide active and constructive
challenge and contribute to the
development of strategy
– Monitor Executive Director
performance against agreed
objectives and ensure robust risk
management
– Ensure the Board and Board
Committees fulfil their
responsibilities and are ably
equipped to do so
– Ensure the Board is balanced and
appropriate succession planning is
undertaken, allowing it to provide
clear and effective leadership across
the organisation
Company Secretary
James Pochin
– Acts as secretary to the Board and
relevant Board Committees and
provides the requisite support
– Advises the Board on legislative,
regulatory and governance matters
– Ensures the Board has the
appropriate policies, procedures
and resources in place to function
effectively and align with best
practice
– Assists with communication
between the Board and
Shareholders and is responsible for
annual general meeting organisation
Board composition
Board composition remained subject to consideration throughout 2024 (and up to the date of this Corporate Governance Report),
with an ongoing focus on the Chair’s stated mandate to refresh and strengthen the Board by improving its independence and
diversity against the background of the FCA’s diversity targets and the Group’s broader EDI vision and goals. Significant progress
was made in this regard and the appointment of Milyae Park as an independent NED in January 2025 served to enhance the
Board’s skill sets and knowledge, further improve overall independence, and also secured compliance with the FCA’s targets that
at least: (i) 40% of the individuals on the Board are women; and (ii) one Board member is from a minority ethnic background. The
considerations of, and process followed by, the Nomination Committee in recommending Milyae Park’s appointment are detailed
within the Nomination Committee Report.
A summary of the principal responsibilities of Board members and the Company Secretary is as follows:
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Governance
Financial Statements
Additional Information
Governance
Corporate Governance Report continued
The following matrix sets out the key competencies of individual Board members:
Name
UK listed
plc
Technology/
ecommerce
Marketing/
branding
Retail
industries
M&A
Global
operations
Governance
Finance &
accounting
Risk
management
Strategy &
development
Charles Allen
Matthew Moulding
Damian Sanders
Edward Koopman
Gillian Kent
Dean Moore
Sue Farr
Helen Jones
Milyae Park
Board independence
As previously detailed, the Board
currently comprises two Executive
Directors (i.e. the CEO and the CFO) and
seven NEDs, six of whom (including the
Chair) are deemed to be independent
in character and judgement. Following
due consideration of his individual
circumstances against Code Provision
10, NED Edward Koopman is not deemed
to be independent. Edward Koopman
was appointed to the Board prior to
Admission to represent Sofina SA
(“Sofina”), a major Shareholder. Edward
Koopman is both an employee of
Sofina and a member of its Executive
Committee, although it is highlighted that
Edward’s continued THG directorship
is not in a Shareholder-representative
capacity despite Sofina continuing
to hold Ordinary Shares following
Admission.
As the Company has previously
disclosed, the holding of Ordinary
Shares by NEDs is not considered to
impair their independence but is viewed
as aligning their interests with those
of Shareholders more generally, and
thus with the long-term interests and
success of the Company. Consequently,
NEDs may purchase Ordinary Shares at
market value via a broker and facilitated
by the Company if required. Directors’
holdings are set out within the Directors’
Remuneration Report.
On an analysis which incorporates the
strict letter of the Code and excludes the
Independent Chair, the Code Provision
11 requirement that at least half the
Board are independent NEDs was not
satisfied in the period 1 January 2024
to 31 March 2024.
During this period the Board comprised
three Executive Directors (i.e. the CEO,
the CFO and the former COO) and seven
NEDs (including the Chair), two of whom
were not deemed to be independent i.e.
Iain McDonald and Edward Koopman.
However, this Code departure was
rectified when Iain McDonald stepped
down from the Board at the end of
March 2024, resulting in at least half
the Board, excluding the Independent
Chair, being independent NEDs in the
period 1 April 2024 to 31 December 2024
– namely, Gillian Kent, Dean Moore, Sue
Farr and Helen Jones.
Compliance with Code Provision 11
remains the position as at the date
of this Corporate Governance Report,
with John Gallemore having resigned
from the Board and as COO with effect
from completion of the demerger
of THG Ingenuity on 2 January
2025 and independent NED Milyae
Park having joined the Board on
28 January 2025.
Directors’ time commitment
Under the terms of their Letters of
Appointment (“Appointment Letters”),
and in recognition of Code Principle H
and Provision 15, NEDs must confirm that
they have sufficient time to discharge
the duties and responsibilities incumbent
upon them as THG Directors and declare
details of all significant business (and
other) interests, together with a broad
indication of the time required for such
interests. The Board must thereafter be
kept apprised of any changes to such
commitments and at least seven days’
written notice must be provided to the
Chair before a NED accepts an additional
external commitment which may impact
the time they are able to commit to their
Board role.
The Board, in conjunction with the
Nomination Committee, keeps the time
commitment expected of, and expended
by, NEDs under ongoing consideration
and, as at the date of this Corporate
Governance Report, is satisfied that
NEDs’ current external commitments,
as detailed within their biographies, do
not compromise their effectiveness or
performance.
Appointment Letters provide that, in
addition to attending standard Company
meetings (including Board meetings,
Board Committee meetings and the
Company’s annual general meeting),
NEDs are expected to commit sufficient
time to the appropriate preparation
ahead of such meetings and, overall,
devote at least two days per month to
their role. More generally, NEDs must be
prepared to commit additional time as
circumstances require, and particularly
when the Company is undergoing a
period of increased activity.
This was the case during 2024 when
a number of additional Board meetings
took place to ensure that due and proper
consideration was given to, amongst
other matters, the proposals to transfer
to the ESCC category of the Official
List, demerge THG Ingenuity into an
independent private entity and launch
the associated equity raise to facilitate
the demerger.
Further information on the additional
Board meetings which took place during
the reporting period can be found within
the ‘Board meetings and activities’
section which follows.
Board meetings and activities
While ten core Board meetings were
scheduled to take place during 2024,
additional meetings were arranged
on an ad hoc basis to ensure the
effective consideration and oversight
of time‑sensitive and key strategic and
financial performance items, including
the Company’s proposed transfer to the
ESCC category of the Official List and the
proposed demerger of THG Ingenuity into
an independent private entity (and the
associated equity raise to facilitate the
demerger). The Board ultimately convened
on 20 occasions, with Board member
attendance set out in the table opposite.
Director attendance at Board Committee
meetings is detailed within the various
Board Committee Reports.
2024 scheduled Board meetings
2024 ad hoc Board meetings
Director
Charles Allen
10/10
10/10
Matthew Moulding
10/10
10/10
Damian Sanders
10/10
10/10
Edward Koopman
10/10
9/10
Gillian Kent
10/10
10/10
Dean Moore
10/10
10/10
Sue Farr
10/10
8/10
Helen Jones
10/10
10/10
Milyae Park1
n/a
n/a
Former Director
John Gallemore2
10/10
9/10
Iain McDonald3
3/3
n/a
1. Milyae Park was not a Director during 2024 but was appointed to the Board on 28 January 2025.
2. John Gallemore was a Director throughout 2024 but resigned from the Board and as COO with effect
from completion of the demerger of THG Ingenuity on 2 January 2025.
3. Iain McDonald stepped down from the Board on 31 March 2024.
Corporate activity:
– Considering and approving:
– the sale of the Company’s
portfolio of luxury goods websites,
including www.coggles.com;
– the extension of the Company’s
RCF by 17 months to May 2026;
– the demerger of THG Ingenuity
into an independent private
company, to facilitate the
simplification of THG’s business
model as a cash generative, global
consumer beauty and nutrition
group, with an improved balance
sheet, capex and cash flow
profile; and
– the associated, and ultimately
over-subscribed and upsized,
equity raise to facilitate the
demerger of THG Ingenuity by way
of a placing, subscription and retail
offer of Ordinary Shares.
Governance:
Ongoing consideration of certain
governance arrangements within the
Group in light of:
– proposed reforms to the UK’s audit
and corporate governance framework;
– proposed changes to the 2018 Code,
and thereafter publication of the 2024
Code (applicable for financial years
beginning on or after 1 January 2025)
by the FRC on 22 January 2024;
– the FCA’s ongoing review vis‑à‑vis
reform of the listing regime and,
following completion of the review,
publication of the new UK Listing
Rules (effective from 29 July 2024);
and
– following extensive Shareholder
consultation, overseeing the
Company’s transfer from the
Transition category to the ESCC
category of the Official List, effective
from 6 January 2025.
Strategy:
– Ongoing consideration of the Group’s
strategic aims and objectives in
light of, amongst other matters,
macroeconomic conditions,
geopolitical uncertainties, high
inflation and global recessions.
– Pursuant to THG’s stated strategy
to maximise Shareholder value, and
following extensive Shareholder
engagement, reviewing potential
structures to facilitate the demerger
of THG Ingenuity from the Group.
– As part of the Group’s ongoing
portfolio management to further
streamline its businesses and
optimise margin and cash generation,
overseeing the discontinuation of
certain THG Beauty territories and
non-core services.
– Overseeing: (i) the major rebrand
of the Myprotein business (and
associated transitory disruption);
and (ii) the launch of Lookfantastic’s
first flagship retail store as part of
the Group’s targeted omnichannel
strategy to enhance brand awareness
and customer appeal and aid product
discovery.
General:
Ongoing oversight of:
– the Group’s market guidance and consensus; and
– the progress made against the stated strategies of the individual businesses to return
to sales growth and rebuild margins, supported by a programme of cost savings and
strong cash discipline.
In addition to those items of Board business which fall within the reserved parameters of the aforementioned Schedule of Matters,
certain other key topics were considered by the Board during 2024, including (but not limited to) the following:
Further information on the key discussions and principal decisions taken by the Board during 2024, including relevant stakeholder
considerations, can be found within the ‘Section 172 Statement: Stakeholder Engagement’ section of the Strategic Report.
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Governance
Financial Statements
Additional Information
Governance
Corporate Governance Report continued
Conflicts of interest
While it is accepted that NEDs may have
business interests outside those of the
Company, Appointment Letters require
that NEDs do not put themselves in a
position where their duties to any other
person, firm or company conflict with
their duties to the Company or the wider
Group. A NED must disclose any actual or
potential conflict of interest to the Board
as soon as it becomes apparent, and at
least seven days’ written notice must
be provided to the Chair before a NED
accepts an appointment as a director,
agent, employee or consultant of any
company or firm engaged in a business
competing with, or similar to that of, the
Company or any Group company.
The Group occupies and utilises
property assets which are owned by
the Propco Group, which itself is wholly
owned by the CEO (who is also a major
Shareholder). As a result of these
arrangements, the Board‑constituted
Related Party Committee was
established to oversee and approve
Related Party Transactions and provide
the requisite governance structure
within which any actual or potential
conflicts of interest could be considered
and addressed appropriately. Further
information on the responsibilities and
activities of the Related Party Committee
can be found within the Related Party
Committee Report.
Board information
Board, and Board Committee,
documentation continues to be issued
in advance of meetings via a leading
third-party governance platform which
the Company launched following
Admission. This cloud-based platform
provides a secure and efficient means by
which to manage and distribute Board
information and also serves as a secure
and centralised document storage
facility through which information can be
stored and accessed by Directors on an
ongoing basis.
To ensure Directors have sufficient time
to review and consider documentation,
papers have typically been issued no
later than three working days in advance
of a meeting, although this is currently
subject to ongoing consideration (as
discussed further within the ‘Board
evaluation’ section of the Nomination
Committee Report).
The monthly Board packs incorporate
the prior month’s financial results, on
a Group and individual business basis,
together with non-financial information
relating to key areas such as People,
Investor Relations and Sustainability.
The meeting agenda (as agreed between
the Company Secretary and the Chair)
will also be included, together with the
minutes of any previous Board meeting(s)
which will be tabled for approval.
Following output from recent Board
evaluations, the timing, format and
content of monthly Board packs and
meetings remain key areas of focus
and, while the Board acknowledges
the progress which has been made
to date following previous evaluation
results, it is recognised that further
enhancements are required. These items
are considered further within the ‘Board
evaluation’ section of the Nomination
Committee Report.
Board induction and training
A structured onboarding programme
has been developed for all new Board
members to ensure they are fully
aware of the duties and responsibilities
incumbent upon them as THG Directors
and Board Committee members. This
programme includes the provision of
internal briefing memorandums on key
regulatory and legislative items, such as
the UK Market Abuse Regulation, inside
information and insider dealing, and
face‑to-face/interactive training and
update sessions with relevant external
advisers e.g. legal and remuneration.
One-to-one sessions will also be
arranged with Executive Directors
and members of Senior Management
to provide a general introduction to
core areas of the business and its
operations; more focused sessions may
subsequently take place to support
particular interests and/or where new
Board members request more detailed
insight. Further, the deep dives which
take place at scheduled monthly Board
meetings ensure that NEDs are kept fully
up to date on key Group and individual
business matters (including strategic,
financial and operational issues and
market challenges and landscape) and
People and Sustainability items.
The Company continues to arrange
membership of the Non-Executive
Directors’ Association (“NEDA”) for all
Board members, including Executive
Directors.
NEDA is an independent organisation which
promotes and supports the day‑to‑day
needs of non-executive directors, at
all levels (whether aspiring, new or
experienced), and through this membership
Directors have access to a comprehensive
suite of technical knowledge updates and
a monthly programme of seminars and
briefings (including networking events).
Board members therefore have the
opportunity to refresh and enhance their
knowledge and skill sets, as they consider
necessary and on a ‘self‑managing’ basis,
and the Company is fully supportive of, and
indeed encourages, Directors’ attendance
at any events which may be of interest
to them and/or which address particular
training needs.
Additionally, and to address the continuing
professional development needs of the
Board, on a collective and individual basis,
the Company’s advisers may attend
Board meetings to ensure Directors are
kept suitably apprised of applicable
legislation, guidance and market practice/
developments and any changes to, and/
or proposals on, the corporate governance
landscape. In such instances, associated
briefing papers will also be included within
Board packs for Directors’ longer-term
information and reference.
During 2024 a number of broker updates
took place to: (i) ensure that Directors
had the requisite market and operational
knowledge to oversee delivery of the
Group’s strategic aims and objectives;
and (ii) support the Board on key areas of
strategic focus. Such areas included: (i) the
reforms to the UK’s listing regime which
came into effect on 29 July 2024, and the
subsequent proposal that the Company
transfer to the ESCC category of the
Official List; and (ii) the proposal to demerge
THG Ingenuity into an independent private
entity, together with potential structures to
facilitate the demerger and the associated
equity raise (including market reaction).
The Company’s legal advisers also attended
Board meetings to provide support and
advice in relation to these matters and, in
advance of the Company’s transfer to the
ESCC category, undertook a Board teach-in
session informing Board members of their
obligations and responsibilities as directors
of an ESCC-listed company (including
those incumbent upon them under UK
Listing Rules 6 to 10 which did not apply
to the Company prior to the transfer).
A Board Memorandum was also provided
which addressed the applicable duties
and liabilities of directors of an ESCC-listed
company.
Board effectiveness
In line with Code Principle I, the Company
remains committed to ensuring that
the Board, and its Board Committees,
have the necessary policies, processes,
information and resources available
to them to function effectively and
efficiently.
The Company Secretary plays a key
role in this regard, advising on legal,
regulatory and governance matters
and providing support and assistance
to Directors as required. Further, and in
accordance with Code Principle L and
Provision 21, the Company has conducted
formal Board evaluations on an annual
basis since Admission which have
considered, amongst other matters, the
effectiveness of the Board and the Board
Committees.
While the output of recent Board
evaluations is considered in more detail
within the ‘Board evaluation’ section
of the Nomination Committee Report,
results confirm that the Board is
considered to function in a collaborative
and effective manner and each Director
is regarded as making an effective
contribution.
More generally, Board relations and,
in turn, effectiveness are fostered
and nurtured through the informal
discussions and debates which occur
outwith the confines of the Boardroom,
including through the various ad
hoc conversations which take place
between the Chair and the NEDs and
the SID and the NEDs throughout each
financial year. Such unstructured, but
ongoing, interaction amongst Board
members is considered a valuable
tool via which Board relations are
cultivated and enhanced, and it is further
encouraged through, for example, the
full Board, NED‑only and Board–Senior
Management dinners which continue to
become embedded within the annual
Board planning cycle.
Workforce engagement
As a people-led business, THG
continually strives to develop and
enhance the employee journey and
workplace culture to ensure an
environment of inclusivity is promoted
and all employees have an equal voice.
Indeed, the continued development
of, and investment into, EDI initiatives
throughout 2024 ensured that EDI
remained high on the agenda as the
Company seeks to provide a truly
inclusive and diverse workplace for all
(further information on which can be
found within the ‘Our people’ section of
the Strategic Report). Notably, one of
the three key priorities under the 2030
Sustainability Strategy is ‘Empowering
people and communities’ which affirms
THG’s people-centric approach – “our
people are our greatest asset”.
The Board, and the Company more
generally, recognise the importance
of robust and consistent employee
engagement in seeking to foster a
thriving and empowered workforce;
employee engagement therefore
remained a combined priority focus of
the People team and the Sustainability
Committee (falling as it does within
the scope of the 2030 Sustainability
Strategy) during 2024 (and remains
so in 2025).
While further information on wider
stakeholder engagement measures
and progress can be found within the
‘Section 172 Statement: Stakeholder
Engagement’, ‘Our people’ and
‘Empowering people and communities’
sections of the Strategic Report, a key
initiative was the launch of an employee
engagement survey in March 2024. This
survey provided employees globally with
the opportunity to share feedback on all
aspects of life at THG on an anonymous
and confidential basis, with a follow-up
survey taking place in October 2024.
The output from these surveys is being
used to better understand the needs,
preferences and perspectives of the
global workforce and, in turn, inform
THG’s People strategy and drive positive
change throughout the business.
To ensure Directors are kept fully
apprised of all material workforce,
including engagement, matters, a People
section is incorporated within the main
deck of monthly Board packs and the
Chief People Officer, who has ultimate
oversight of the Group’s workforce
engagement initiatives, attends monthly
Board meetings to take questions,
and report to the Board, on the wider
People piece.
As Board Committee updates have
now been established as a standing
agenda item at monthly Board
meetings, this provides the NED
Sustainability Committee Chair with the
opportunity to update the full Board
on relevant workforce engagement
items. Additionally, the Group’s EDI
Committee Champions continue to
play a key engagement role, driving
general workforce EDI engagement and
representation while collaborating with,
and reporting into, Senior Management.
This reporting structure provides for
the ‘employee voice’ to be heard at an
appropriately senior level within the
Group and, with Senior Management
attending monthly Board meetings,
further facilitates regular and direct
Board updates.
The Board considers that, at the
present time, the appropriate employee
engagement arrangements are in place
to ensure that it understands the views
of the Company’s workforce and, in
turn, can appropriately factor their
interests into Board discussions and
decision‑making. Such engagement
mechanisms are kept under ongoing
review to ensure that they remain
effective, both from a workforce and
general stakeholder perspective.
Further information on how
engagement strategies positively
impact decision‑making throughout the
organisation, including at Board level,
can be found within the ‘Section 172
Statement: Stakeholder Engagement’
section of the Strategic Report.
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Governance
Financial Statements
Additional Information
Governance
Audit Committee
Report
“ The Committee, together with the Risk Committee, continues
to play a leading role in ensuring the integrity of the Group’s
financial reporting, overseeing the External and Internal Audit
functions and monitoring the Group’s control framework.
In light of the forthcoming changes to Provision 29 of the
Code, the ongoing evolution of THG’s control environment
and oversight from the Committee remain key.”
Dean Moore
Chair of the Audit Committee
As Audit Committee Chair, I would like
to welcome you to the Audit Committee
Report for the 2024 financial year. I am
pleased to confirm that, in addition
to discharging its key reporting and
controls oversight responsibilities during
the reporting period, the Committee, in
conjunction with the Risk Committee,
oversaw the ongoing evolution of the
Group’s control and risk management
framework.
Composition and meetings
In accordance with its Terms of
Reference, members of the Audit
Committee are appointed by the
Board, upon the recommendation
of the Nomination Committee and
in consultation with myself, as Audit
Committee Chair, and they are required
to possess the skills and experience
appropriate for such membership.
The Terms of Reference further provide
that the Audit Committee must comprise
at least three independent NEDs, one of
whom is, where possible, a member of
the Remuneration Committee, possessing
recent and relevant financial expertise
and experience in accounting and/or
auditing (as determined by the Board),
and one of whom is a member of the
Risk Committee.
Current Audit Committee membership
therefore satisfies the relevant provisions
of both the Terms of Reference and the
Code, comprising four independent NEDs
who have been deemed to possess the
knowledge and expertise necessary
for such membership and all of whom
are members of the Remuneration
Committee and the Risk Committee.
Member attendance at the four meetings
which took place during 2024 is set out in
the table opposite and, while attendance
is restricted to Audit Committee members
(and any individual entitled to be present
as an observer), the Terms of Reference
detail that certain individuals (including
the CFO, the Director of Risk and Internal
Audit and the External Auditor’s Lead
Partner) may be invited, and are expected,
to attend meetings on a regular basis.
These individuals may also request a
meeting of the Audit Committee should
they consider it necessary or desirable to
do so.
Throughout 2024 (and up to the date
of this Audit Committee Report), the
Audit Committee Chair (and other Audit
Committee members as appropriate)
maintained an ongoing dialogue with
key individuals involved in the Group’s
governance, including the Independent
Chair, the CEO and the Director of Risk
and Internal Audit.
Further, in addition to attending all Audit Committee meetings, the External Auditor continued to meet with Audit Committee
members in the absence of Senior Management and also privately with the Audit Committee Chair, as and when considered
necessary, to discuss the scope of the audit plan, the remit of the external audit and to challenge, as they saw fit, the findings of
the audit process, including (but not limited to) any material issues which had been identified, areas of significant judgement and
the general effectiveness of the process.
Role and responsibilities
The Terms of Reference of the Audit Committee provide that its purpose is to support the Board in fulfilling its oversight
responsibilities by reviewing and monitoring: the independence and effectiveness of internal and external audit functions; the
integrity of the Group’s financial and narrative statements; and the Group’s internal financial controls, internal controls and, as
appropriate and in conjunction with the Risk Committee, risk management framework.
The specified duties and responsibilities of the Audit Committee include, but are not limited to, the following:
– monitoring the integrity of the Group’s financial statements, including its half-year financial statements, annual report and
accounts and preliminary announcements, and reviewing and reporting to the Board on significant financial reporting issues
and judgements which those statements contain, having regard to matters communicated to it by the External Auditor;
– where requested by the Board, reviewing the content of the annual report and accounts and the interim financial statements
and advising the Board on whether, when taken as a whole, each are fair, balanced and understandable and provide the
information necessary for Shareholders to assess the Company’s performance, business model and strategy;
– assisting the Board with monitoring and reviewing the Group’s internal control systems on an ongoing basis, including
monitoring material financial, operational and compliance controls;
– monitoring and assessing the role and effectiveness of the Internal Audit function in the overall context of the Group’s risk
management system and the work of the Compliance and Finance functions and the External Auditor; and
– reviewing the Group’s procedures for preventing and detecting fraud, its systems and controls for the prevention of bribery and
the adequacy and effectiveness of its anti‑money laundering systems and controls.
Activities of the Audit Committee
The key areas of review which the Audit Committee considered during the 2024 financial year are summarised as follows:
Topic
Activity/Review
Financial
reporting
– Reviewed the Annual Report and the final half-year statement, including key accounting judgements,
materiality and the External Auditor’s report on the interim statements
– Reviewed key judgements and estimates in preparation for year-end reporting
– Reviewed year-end matters, including the draft Annual Report (and assessed the processes to ensure it is
fair, balanced and understandable), significant accounting judgements, the draft and final full-year results
announcement, the Going Concern Statement and the viability model
– Considered the impact of climate risks on the financial statements
– Reviewed other reports and papers from Senior Management around key accounting judgements and
transactions and updates relating to the changes to Provision 29 of the Code
External audit
– Reviewed EY’s plan for the audit of this Annual Report and the progress of the audit to date
– Reviewed EY’s report on the scope of the audit relating to this Annual Report, including key audit risks
– Disclosed relevant audit information to the External Auditor and the required evidence in support of it
– Reviewed the final report from EY following completion of the audit of this Annual Report
Internal control
and assurance
– Reviewed reports from Internal Audit on assurance and audit work
– Reviewed other updates from Internal Audit including the Recommendations Tracker and Whistleblowing
Updates
– Re-approved the Internal Audit annual plan on a quarterly basis
– Reviewed the outputs of the fraud risk assessment
Members and attendance
Committee member
Position
Attendance
Dean Moore
Chair1
4/4
Gillian Kent
Member2
4/4
Sue Farr
Member3
4/4
Helen Jones
Member4
4/4
1. Dean Moore was appointed as a member of
the Audit Committee upon his appointment
to the Board on 15 September 2022 and
thereafter assumed the position of interim
Audit Committee Chair on 24 January 2023.
He was appointed Audit Committee Chair on
a permanent basis on 21 July 2023.
2. Gillian Kent was appointed as a member of
the Audit Committee upon her appointment
to the Board on 15 September 2022.
3. Sue Farr was appointed as a member of the
Audit Committee on 21 July 2023.
4. Helen Jones was appointed as a member
of the Audit Committee on 21 July 2023.
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Governance
Financial Statements
Additional Information
Governance
Audit Committee Report continued
Significant financial reporting areas
A key role of the Audit Committee is to assess whether the judgements and estimates made by Senior Management are
reasonable and appropriate. To assist in this assessment, the Finance team provide accounting papers to the Audit Committee
which detail the financial aspects surrounding key accounting judgements and areas of focus for THG, including all significant
issues outlined in the table which follows.
As part of the year-end reporting process, the Audit Committee considered this Annual Report, Senior Management’s papers on
key accounting estimates and judgements, the going concern and viability review, updates provided by the External Auditor and
accounting and reporting matters (including representation letters from Senior Management in respect thereof).
The Audit Committee assessed whether suitable accounting policies had been adopted and the reasonableness of the
judgements and estimates that had been made by Senior Management.
Key accounting matters which received particular focus from the Audit Committee during 2024, and relating to the financial
statements for the period, are as follows:
Area of focus
Audit Committee considerations and actions
Impact on financial
information and disclosures
Accounting for
the demerger
of THG Ingenuity
The Audit Committee reviewed Management’s paper in detail covering the key
judgements made, being the classification as held for distribution at 31 December
2024, given the date of the demerger is post year end, and the measurement of the
dividend liability.
The Committee focused on the critical assumptions underpinning the measurement
of the distribution group (THG Ingenuity) to ensure the fair value disclosed was
appropriate and in line with accounting standards. The Committee agreed with
Management’s judgements.
The Audit Committee has reviewed the financial statement disclosures.
The Discontinued
operations note 12.2
is included within the
consolidated financial
statements.
Accounting
for platform
development
costs
THG incurred £50m in respect of additions to the platform in 2024. The carrying
value is included within the held for distribution group at 31 December 2024 and
totalled £118m. Management’s judgement is applied regarding which projects relate
to capital spend. This is reviewed with Management on a monthly basis across the
Finance and Technology teams.
The Audit Committee reviewed and acknowledged the controls in place, including
review and challenge as to the scope and extent of time capitalised.
The Intangible assets
note 11 is included
within the consolidated
financial statements.
Impairment of
goodwill and
intangible assets
for THG Beauty
CGU
The Audit Committee reviewed Management’s impairment paper in detail and
challenged key judgements, including terminal growth rate, forecast cash flows and
discount rate, and concluded these to be appropriate for THG Beauty.
The Audit Committee has reviewed the financial statement disclosures.
The Intangible assets
note 11 is included
within the consolidated
financial statements.
Presentation and
disclosure of
adjusted items
and APMs
To allow the Audit Committee to assess the policy, presentation and disclosure
applied, Management presented a detailed category-by-category analysis of adjusted
items to the Committee in the year.
The Audit Committee also considered the presentation of APMs throughout
this Annual Report and whether this enables a clear and fair understanding
of performance.
This included the separate presentation and APMs of discontinued categories
consistent with Management actions announced as part of the strategic review.
The conclusion was that the adjusted items policy was appropriate and being applied
consistently. The Audit Committee concluded that the use of APMs was satisfactory.
The Adjusted items note
4 is included within the
consolidated financial
statements.
Related Party
Transactions
The Group leases a number of properties from a related party. A Related Party
Committee is in place to review and approve any transactions in the year.
The number of leases in place with a related party has significantly reduced
during 2024.
The Audit Committee has reviewed the related party disclosure within the financial
statements to ensure this gives a true and fair view. This has included a review of
whether there are any additional related parties outside of those already identified due
to Board appointments and shareholdings in the year.
The Audit Committee satisfied itself that there were no additional related parties that
had not already been identified but noted that following the demerger THG Ingenuity
would be recognised as a related party within the FY25 financial statements. The Audit
Committee also approved the disclosure for inclusion within the financial statements.
More details on related
parties are included
within the Related Party
Committee Report.
Related party details are
included within note 27
within the consolidated
financial statements.
Area of focus
Audit Committee considerations and actions
Impact on financial
information and disclosures
Recoverability of
the Company’s
investment in
subsidiaries
The Audit Committee reviewed the judgements made by management in reviewing
the recoverability of the investment in subsidiary undertakings of £557.9m taking
into account the results of the Group goodwill impariment testing, the amount of the
parent company’s loans and receivables from subsidiaries and external bank debt. The
Committee focussed on the critical judgements being the DCF calculations used within
the goodwill impairment review. The conclusion was that given the changes in the year
to the recoverable amount as presented by management, namely the current year
assessment no longer including THG Ingenuity along with the impact of the current
year THG Nutrition performance, the impairment of £552.9m proposed by management
was appropriate.
More details are
included within note
5 within the Company
notes to the financial
statements.
In addition to these areas the Committee
also discussed revenue recognition with
the external auditors and is satisfied
that revenue has been recognised
appropriately.
The preceding table is not a complete
list of all the Group’s accounting issues,
judgements, estimates and policies, but,
in the opinion of the Audit Committee,
details the most significant items which
were considered during the 2024
financial year.
Fair, balanced and
understandable assessment
At the request of the Board and pursuant
to its Terms of Reference, the Audit
Committee has considered whether, in
its opinion and when taken as a whole,
the Annual Report is fair, balanced
and understandable and provides the
information necessary for Shareholders to
assess THG’s position and performance,
business model and strategy.
THG has established internal controls in
relation to the process for preparing the
Annual Report, including the following:
– Senior Management regularly monitors
and considers developments in
accounting regulations and financial
reporting and, where appropriate,
reflects developments in the financial
statements.
– The Annual Report is drafted by
Senior Management, with overall
coordination undertaken by a member
of the Finance team and additional
support provided by external advisers
to ensure consistency across the
relevant sections and inclusion of the
necessary information for Shareholders
to assess the Company’s position and
performance, business model and
strategy.
– Comprehensive reviews of drafts of
the Annual Report are undertaken
by Executive Directors and Senior
Management as part of an internal
verification process which is carried
out to ensure accuracy and assess
whether the Annual Report is fair,
balanced and understandable.
– The final draft of the Annual Report is
reviewed by the Audit Committee prior
to consideration by the Board.
Following its review, the Audit Committee
advised the Board that the Annual Report
was, when taken as a whole, considered
to be fair, balanced and understandable
and provided the information necessary
for Shareholders to assess THG’s position
and performance, business model and
strategy.
The Audit Committee was also satisfied
that suitable accounting policies
had been adopted, and appropriate
disclosures made, within the financial
statements.
The Viability and Going Concern
Statements are set out on pages 81
and 82 of the Strategic Report.
Risk management
and internal controls
While the Board has ultimate
responsibility for the Group’s risk
management and internal control
systems, responsibility for the ongoing
monitoring and review of these systems
(including financial, operational and
compliance controls) is delegated
to the Audit Committee, which also
assists the Board in its annual review
of the effectiveness of these systems
and determining their adequacy
(or otherwise).
The Audit Committee continues to
work in support of the Board’s risk
management strategy, in conjunction
with the Risk Committee as and when it
is considered appropriate to do so.
Information on the Group’s risk
management framework can be found on
pages 72 to 81 of the Strategic Report,
together with details of the processes
and controls which were in place
throughout 2024 to manage and mitigate
risk and provide the Board with the
required assurance that sound systems
of risk management and internal controls
exist throughout the Group.
Internal Audit
The Audit Committee is responsible for
reviewing and approving the role and
mandate of the Internal Audit function,
while monitoring and assessing the
effectiveness of its work (including in
the overall context of the Group’s risk
management systems).
To ensure the reporting line of the
Internal Audit function is independent of
Management and suitably positioned to
exercise independent judgement, it has
access to the Audit Committee, as and
when required, and the Director of Risk
and Internal Audit has a direct reporting
line into the Audit Committee Chair.
When considered necessary or desirable
to do so, the Audit Committee meets with
the Director of Risk and Internal Audit, in
the absence of Senior Management, to
discuss the effectiveness of the function
and to consider the actions taken by
Senior Management to implement
its recommendations and support
its workings.
Internal audit plans include a range of
financial and non-financial engagements,
delivered in an assurance or advisory
capacity. The internal audit plan is risk
based and due consideration is given to
each of the following areas during the
planning process: principal risks; central
functions; projects and M&A; global site
audits; and operations and commerce.
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Governance
Internal Audit continued
Audit engagements were undertaken
in each of these areas during the 2024
financial year. The annual internal audit
plan is subject to detailed review by the
Audit Committee to ensure alignment
with key business needs; regular
progress updates are provided to the
Audit Committee which oversees and
approves the scope of the plan on
a quarterly basis.
Following due and careful consideration
of all relevant factors, the Audit
Committee is satisfied that: (i) the
Internal Audit function is equipped to
properly and effectively discharge its
duties and responsibilities in accordance
with the relevant professional
standards for internal auditors; and (ii)
the internal audit plan itself provides
appropriate assurances in respect of
the financial and non-financial controls
in place to manage and mitigate the
principal and emerging risks facing
the business (further details on which
can be found on pages 72 to 81 of the
Strategic Report).
Independence, performance
and effectiveness of the
External Auditor
The External Auditor confirmed its
independence and objectivity from THG
during the 2024 financial year and both
the Audit Committee and the Board
are satisfied that the External Auditor
has adequate policies and safeguards
in place to ensure its objectivity and
maintain its independence.
When assessing the independence of
the External Auditor, the Audit Committee
considered, amongst other matters, the
value of fees received by the External
Auditor for non-audit services, the
relationship with the External Auditor as
a whole, and the annual disclosure from
the External Auditor in respect of threats
to its independence and the safeguards
applied to mitigate such threats.
In overseeing the External Auditor
relationship, the Audit Committee
is responsible for making formal
recommendations to the Board on
the External Auditor’s appointment,
reappointment and removal, and
in this regard seeks views from
Senior Management on the quality
and effectiveness of the external
audit process.
The effectiveness of the Lead Partner
and the External Auditor’s team, and
their approach to audits, including
planning and execution, communication,
support and value, were assessed
and discussed, and consideration was
given to whether the External Auditor
had achieved the agreed audit plan (or
otherwise explained the reasons for
any departures from it, including any
changes in perceived audit risks and the
work undertaken by the External Auditor
to address those risks).
The content of the External Auditor’s
Board report was also reviewed
and monitored, together with other
communications with the Audit
Committee, in order to assess whether
there was a good understanding of
THG’s business and establish whether
recommendations had been acted upon
and, if not, the reasons for this.
As part of the External Auditor
assessment, the Audit Committee
considered whether the External Auditor
had exercised professional scepticism
and an appropriate degree of challenge
to Senior Management, particularly on
key accounting and audit judgements.
Additional feedback was sought from
various participants in the process,
including the CEO, the CFO and the
Independent Chair, but primarily from
the Audit Committee itself.
Overall, the effectiveness of the
external audit process was assessed
as performing as expected. The Audit
Committee concluded that it was
satisfied with the work undertaken by
the External Auditor, including adequate
levels of challenge, during 2024.
There are independent reporting lines
from the External Auditor to the Audit
Committee and the External Auditor is
afforded the opportunity for sessions
with the Committee throughout every
financial year.
The Audit Committee is also responsible
for considering and approving the terms
of engagement with, and remuneration
of, the External Auditor, in respect of both
audit and non-audit services, in addition
to its removal.
A resolution proposing the reappointment
of EY was approved by Shareholders
at the 2024 AGM. When considering
whether to recommend the
reappointment of the External Auditor,
the Audit Committee considers a range
of factors, including the effectiveness of
the external audit, the period since the
last audit tender was conducted and the
ongoing independence and objectivity of
the External Auditor.
The External Auditor has been appointed
since the 2011 reporting period (to the
date of this Annual Report), and the Lead
Partner, Karl Havers, has been in post
since the start of the audit for the 2021
financial year. This being so, financial
year ending 31 December 2025 will
be the final year that Karl Havers can
be appointed and the Company is in
discussions with EY to ensure a smooth
transition to an appropriate successor.
While the Audit Committee is aware
that the initial engagement period for
a statutory auditor should not exceed
ten years, the Company tenure is
counted from 1 January 2021 i.e. the
first accounting period audited following
Admission. The Audit Committee
considers that it would be appropriate to
conduct an external audit tender by no
later than 2030.
The Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 did not
apply to the Company in respect of the
financial year ended 31 December 2024
as the Company was not a constituent
of the FTSE 350 Index. Having entered
the FTSE 250 Index on 21 March 2025,
a statement of compliance will, as
appropriate, be included within future
Audit Committee Reports.
Audit Committee Report continued
Fees payable to
the External Auditor
The Audit Committee has reviewed and
approved a policy regarding non-audit
work and fees, in relation to which please
see note 5 to the Group’s financial
statements.
In order to ensure that the provision
of non-audit services does not impair
the External Auditor’s independence
or objectivity, this policy requires that
the Audit Committee pre-authorises
any non‑audit work proposed to be
undertaken by the External Auditor
or, if required urgently between
Audit Committee meetings, the Audit
Committee Chair is empowered to
provide such authorisation.
There are certain services which cannot
be provided by the External Auditor,
or members of its network, due to the
possibility that they may compromise
its independence; it is therefore not
permissible for the External Auditor
to provide such services. Non-audit
services prohibited under independence
requirements will not be authorised.
The only non-audit services performed
during the 2024 financial year related to
the interim review procedures. The total
fees were £0.3m, being a 1:6 ratio to
the audit fees. It is widely accepted that
such procedures will be completed by
a group’s auditor. The Audit Committee
therefore concluded that the objectivity
and independence of the External Auditor
would be safeguarded.
Focus for 2025
During the current financial year, the
Audit Committee will continue to:
– oversee both the internal controls
and governance framework within
THG to ensure its continued evolution,
effectiveness and integrity;
– review Senior Management’s
strategy and monitor the delivery
of the required control framework
enhancements in order to comply with
Provision 29 of the Code which will
apply to financial years beginning on
or after 1 January 2026;
– oversee the use of technology to
enhance the operation of controls
and harness potential opportunities to
digitalise and automate controls as the
framework matures further; and
– ensure the provision of relevant
training, development and support
to all Directors and the Executive
Leadership Team, particularly with
respect to applicable new legislation,
regulation and guidance.
On behalf of the Audit Committee
Dean Moore
Chair of the Audit Committee
28 April 2025
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Governance
Risk Committee
Report
“The Risk Committee, together with the Audit Committee,
continues to play a key role in governing THG’s risk
management and internal control framework. The oversight
provided by the Committee remains crucial given the
challenges of the current macroeconomic and geopolitical
environment, together with the need to ensure the ongoing
evolution of the framework to establish an appropriate risk
profile post demerger and in preparation for the forthcoming
changes to Provision 29 of the Code.”
Gillian Kent
Chair of the Risk Committee
I am pleased to introduce the Risk
Committee Report for the financial year
ended 31 December 2024. During this
period, and up to the date of this Report,
the Risk Committee continued to operate
effectively and deliver against its Terms
of Reference, ensuring a robust and
effective risk governance framework was
in operation throughout the Group.
Composition and meetings
As set out in the table opposite,
membership of the Risk Committee
throughout 2024 (and up to the date
of this Risk Committee Report) was in
alignment with the relevant provisions
of the Terms of Reference which provide
that the Risk Committee must comprise
at least three independent NEDs, at
least one of whom is a member of the
Audit Committee and who each have
the requisite skills and experience
appropriate for such membership.
In accordance with the Terms of
Reference, four Risk Committee meetings
took place during 2024, at appropriate
times in the financial reporting and
audit cycle. While only Risk Committee
members (and any individual entitled to
be present as an observer) have the right
to attend Committee meetings, typically
the CFO, Deputy CFO and the Director of
Risk and Internal Audit will also be in
attendance, together with the External
Auditor, and other non-members may be
invited to attend as and when deemed
appropriate.
Role and responsibilities
The Risk Committee’s Terms of
Reference detail the specific duties and
responsibilities of the Committee and
clarify that its purpose is to:
– review and monitor the principal risks
and identify the emerging risks facing
the Group, the likelihood and impact
of such risks materialising and the
way in which such risks are managed
and mitigated (including the definition
and execution of a risk management
strategy and associated risk policies);
– review and monitor the robustness
of the Group’s risk management
framework, policies and procedures
and their fitness for purpose when
tested against the Board’s risk
strategy and appetite; and
– assist the Board in its oversight of
risk throughout the Group and advise
on its overall risk appetite, tolerance
and strategy (including the principal
and emerging risks it may be willing
to accept to achieve its long-term
strategic objectives).
In fulfilling its purpose, the Risk
Committee may seek such independent
professional advice as it considers
necessary to ensure the proper and
effective execution of its duties and
responsibilities, and it may also access
resources, such as Group Secretariat,
when other specialist support and
assistance is required.
Notably, the Risk Committee’s Terms
of Reference provide that it must work
and liaise, as necessary, with the other
Board Committees, including with
specific reference to the joint delegation
and division of responsibilities with
the Audit Committee in respect of risk
management and internal controls
(further details on which follow).
Activities of the Risk Committee
As previously detailed, four scheduled
Risk Committee meetings took place
during 2024, while one‑to‑one meetings
also continued between the Director
of Risk and Internal Audit and the Risk
Committee Chair to consider the ongoing
development, refinement and embedding
of the Group’s risk management
framework and associated processes.
The Director of Risk and Internal Audit
has open and direct access to the Risk
Committee at all times, an arrangement
which is viewed as key in maintaining
the independence of the reporting line
between the Director of Risk and Internal
Audit and Group Risk from that of
Management.
Additionally, the Risk Committee Chair,
together with other Committee members
(to the extent considered appropriate),
remained in ongoing dialogue with key
individuals involved in the oversight
of Group governance, including the
Independent Chair, to ensure the
necessary intra-function transparency
and alignment continued throughout the
2024 financial year (and up to the date
of this Risk Committee Report).
A summary of the key activities
undertaken by the Risk Committee during
2024 is as follows:
– oversight of the management,
reporting and evolution of principal
and operational risks within the Group
and application of risk appetite,
together with the outcome of principal
risk deep dives;
– consideration of principal risk owner
presentations;
– monitoring the identification and
quantification of emerging risks within
the Group;
– remaining apprised of the changes to
Code Provision 29 and understanding
relevant priorities, as applicable to
the Group’s risk landscape and risk
management framework;
– linked to the foregoing item,
developing a roadmap, with input
from appropriate advisers, to ensure
compliance with applicable disclosure
requirements at the relevant time;
– reviewing the results and remedial
actions arising from the annual Fraud
Risk Assessment, together with
any summary reports of escalated
incidents and instances of fraud;
– consideration of the role of THG
Insurance in supporting risk mitigation
activities; and
– review and update of workstreams and
risks associated with the demerger of
THG Ingenuity.
Risk management
and internal controls
In accordance with the FRC’s Guidance
on ‘Risk Management, Internal Control
and Related Financial and Business
Reporting’ (September 2014), ultimate
responsibility for the Group’s systems
of internal control and risk management
framework rests with the Board.
However, pursuant to the provisions
of the Code and as reflected in its
Terms of Reference, responsibility for
the ongoing monitoring and review
of the Group’s risk management and
internal control systems (including its
financial, operational and compliance
controls) has been delegated to the
Risk Committee, in conjunction with
the Audit Committee.
Included within this delegation of
responsibility is the ongoing monitoring
and review of the processes and
procedures in place to manage and
mitigate principal risks, identify
emerging risks and review and assess
the Group’s risk appetite (including
associated stress testing), together
with assisting the Board in its annual
review of the effectiveness of these
systems and determining their adequacy
(or otherwise).
Information on the Group’s risk
management framework can be found on
pages 72 to 81 of the Strategic Report,
together with details of the processes
and controls which were in place
throughout 2024 to manage and mitigate
risk and provide the Board with the
required assurance that sound systems
of risk management and internal controls
exist throughout the Group.
The Viability Statement is set out on
pages 81 and 82 of the Strategic Report.
Focus for 2025
During the current financial year it is
anticipated that key areas of focus for
the Risk Committee will be as follows:
– oversight of the risk management
framework, risk appetite and emerging
risk processes within THG to ensure
their continued evolution, effectiveness
and integrity and the ongoing
development of the Risk function
as the Group continues to grow and
mature; and
– remaining updated on the Company’s
response to changes to Code
Provision 29.
On behalf of the Risk Committee
Gillian Kent
Chair of the Risk Committee
28 April 2025
Members and attendance
Committee member
Position
Attendance
Gillian Kent
Chair1
4/4
Dean Moore
Member2
4/4
Sue Farr
Member3
4/4
Helen Jones
Member4
4/4
1. Gillian Kent was appointed Risk Committee
Chair upon her appointment to the Board on
15 September 2022.
2. Dean Moore was appointed as a member of
the Risk Committee on 6 December 2022.
3. Sue Farr was appointed as a member of the
Risk Committee on 21 July 2023.
4. Helen Jones was appointed as a member
of the Risk Committee on 21 July 2023.
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Governance
Composition and meetings
The Nomination Committee’s Terms of
Reference provide that the Nomination
Committee Chair must be either the
chair of the Board or an independent
NED and, in line with the relevant Code
Provision, a majority of its members
must be NEDs who are independent in
character and judgement and free from
any relationships or circumstances which
are likely, or could appear, to affect their
judgement.
Membership of the Committee, as set
out in the table opposite, therefore aligns
with these requirements; Charles Allen,
the Nomination Committee Chair, and
members Gillian Kent and Sue Farr were
all deemed to be independent upon their
appointments to the Board (as detailed
within the ‘Board independence’ section
of the Corporate Governance Report).
In accordance with the Terms of
Reference, two Nomination Committee
meetings were held during 2024 and,
while only members are entitled to attend
Committee meetings, others may attend
by invitation if considered appropriate
and necessary e.g. the CEO and/or
external advisers.
Role and responsibilities
The Nomination Committee has
Board-delegated authority to review
and evaluate the structure, size and
composition of the Board, including
its skills, knowledge, experience and
diversity, and this was a key focus of
the Committee during 2024.
To ensure it is well-placed to exercise
this authority, the Terms of Reference
provide that the Committee must remain
abreast of all strategic and commercial
issues affecting the Group and the
markets within which it operates.
In this regard, relevant insights were
shared with the Committee, and the
wider Board, on an ongoing basis
during the year through, for example,
incorporation of strategic and market
updates within Board packs, the regular
deep dive sessions which took place at
scheduled monthly Board meetings and
broker and adviser updates.
Other mandated duties which were
considered and discharged by the
Nomination Committee, as appropriate,
throughout 2024 included:
– identifying a suitable independent
NED candidate for the approval
of the Board (discussed in further
detail in the ‘Board composition and
independence’ section which follows);
– keeping Board Committee composition
under ongoing review (discussed in
further detail in the ‘Board Committee
composition’ section which follows);
and
– reviewing succession plans to ensure
the necessary leadership talent
exists within the Group to effectively
manage and exploit challenges and
opportunities which may arise now and
in the future.
Activities of the
Nomination Committee
Board composition
and independence
The Nomination Committee remained
mindful of overall Board independence
and the balance of Executive
Directors/NEDs throughout the reporting
period, with particular reference to Code
Provision 11.
As considered further within the
Corporate Governance Report,
the Company’s departure from
Code Provision 11 was rectified in
March 2024 when non-independent
NED Iain McDonald stepped down
from the Board. Pleasingly, from this
time at least half the Board, excluding
the Independent Chair, have been
NEDs whom the Board considers to be
independent.
The search to identify suitable
candidates to enhance the composition
and diversity of the Board nevertheless
remained an ongoing focus of the
Nomination Committee during 2024,
having regard to, amongst other matters,
the FCA’s diversity targets (further details
on which can be found in the ‘Diversity
and inclusion’ section which follows).
The Company engaged Audeliss,
an international search firm which
specialises in diversity and championing
change from leadership level, to support
the Nomination Committee in this
exercise. Audeliss has no connection with
the Company or individual Directors.
The parameters of the search reflected
previous recruitment briefs which
acknowledged the importance of
promoting diverse and inclusive Board
membership but which also sought to
identify suitably skilled and experienced
candidates who could be considered the
‘right THG fit’.
A robust recruitment process took place
which included a preliminary desktop/
database review to produce a candidate
longlist, and this was subsequently
refined to a shortlist following detailed
consideration and discussion. In line
with previous recruitment exercises, the
Nomination Committee then undertook
interviews with shortlisted candidates.
Following extensive deliberations,
including consideration of required
experience and skill sets, cultural
alignment and the benefits which
a diverse Board can bring to an
organisation, the Nomination Committee
recommended the appointment of Milyae
Park. This appointment was thereafter
approved by the Board, on the basis of
merit and as assessed against objective
criteria and with due regard to the
promotion of diversity in the Boardroom.
Milyae is regarded as a key addition
to the leadership team, bringing
extensive customer, commercial, digital
and sustainability expertise to her
position and a wealth of strategic and
international capabilities gained from
leadership and advisory roles in c.40
countries. Her appointment aligns with
the Chair’s stated mandate to enhance
Board composition by improving
independence and diversity and also
builds upon the corporate governance
progress which the Company continues
to make in its ongoing plc evolution.
Board Committee composition
The Nomination Committee’s Terms of
Reference provide that it is responsible
for making recommendations to the
Board in respect of Board Committee
membership (in consultation with
the relevant Board Committee Chair).
As detailed within the 2023 Annual
Report, certain updates were made to
Board Committee composition during
2023 to ensure applicable membership
requirements were satisfied (as set
out within the Code and the Board
Committees’ Terms of Reference).
Nomination
Committee Report
“Acknowledging the benefits which diverse membership
can bring to Boardroom discussion and organisational
culture more generally, we were delighted to announce
the appointment of independent NED Milyae Park in
January 2025. Milyae’s appointment was the result of a
detailed recruitment exercise which took place in 2024
and, notably, with effect from this appointment the Company
achieved full compliance with the FCA’s diversity targets.”
Charles Allen
Lord Allen of Kensington, CBE
Chair of the Nomination Committee
I have pleasure in introducing the
Nomination Committee Report for the
2024 financial year and updating you on
the progress which has been made in
certain areas of Committee focus.
At the outset, however, I would like to
convey my gratitude to John Gallemore,
former Executive Director and COO
(previously Chief Financial Officer), for
his commitment to the Company and
to the Board since co-founding THG
in 2004; with effect from completion
of the demerger of THG Ingenuity on
2 January 2025, John resigned from the
Board and as COO and joined the board
of THG Ingenuity as Executive President.
I would also like to thank former NED
Iain McDonald for his contribution as a
Board and Board Committee member
prior to stepping down as a Director
on 31 March 2024.
As detailed within the Corporate
Governance Report, a key focus of
the Nomination Committee since my
appointment has been the ongoing
review of the Company’s leadership to
ensure it is properly constituted to drive
Shareholder value creation.
In considering potential Board
appointments, we seek to identify
individuals who understand, and
can thrive within, a fast-paced,
entrepreneurial culture; who have the
broader knowledge and experience
expected of plc directors; and who
possess the requisite skill sets to oversee
the successful delivery of the Group’s
strategy and, more generally, support the
Company’s ongoing plc evolution.
The promotion of diversity is also a key
consideration in all Board appointments
as we fully embrace the benefits which
diverse membership may bring to Board
discussions and effectiveness.
I am therefore delighted to report on
the successful recruitment process
which was undertaken during 2024
and which resulted in the appointment
of independent NED Milyae Park on 28
January 2025.
Notably, the Company achieved full
compliance with the FCA’s diversity
targets upon Milyae Park’s appointment
(further information on which is contained
in the ‘Diversity and inclusion’ section
which follows).
Members and attendance
Committee member
Position
Attendance
Charles Allen
Chair1
2/2
Gillian Kent
Member2
2/2
Sue Farr
Member3
2/2
Iain McDonald
Former
member4
0/1
1. Charles Allen was appointed as Nomination
Committee Chair on 10 June 2022.
2. Gillian Kent was appointed as a member
of the Nomination Committee upon
her appointment to the Board on
15 September 2022.
3. Sue Farr was appointed as a member of the
Nomination Committee on 21 July 2023.
4. Iain McDonald stepped down from the
Board and as a member of the Nomination
Committee on 31 March 2024.
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Governance
Activities of the
Nomination Committee continued
Board Committee membership remained
subject to ongoing oversight by the
Nomination Committee during 2024. With
the exception of the following, no other
changes took place during the year:
(i) Sue Farr replaced Iain McDonald as
Sustainability Committee Chair in March
2024, following the announcement
that Iain McDonald would step down
as a Director on 31 March 2024; (ii) Iain
McDonald stepped down as a member of
the Nomination Committee at the same
time as he stood down as a Director;
and (iii) Clare Clark, the Group’s Director
of Sustainability, replaced Mark Jones,
former Group Chief Sustainability Officer,
as a member of the Sustainability
Committee in December 2024.
Current Board Committee membership
can be found within the respective Board
Committee Reports.
Board evaluation
Reflecting its belief that the evaluation
process is a critical tool within the Group’s
corporate governance infrastructure, the
Company has conducted formal Board
(including Board Committee) evaluations
on an annual basis since Admission.
These evaluations have been conducted
via an online digital platform provided by
BoardClic, an independent third-party
board evaluation consultant, and the
2023 externally‑facilitated evaluation
(the “2023 evaluation”) also incorporated
in-depth, one-to-one interviews between
Board members and BoardClic’s lead
evaluation assessors.
The BoardClic governance platform
is a data-driven, time-efficient tool
which makes use of comprehensive
benchmarking resources to track
compliance, effectiveness and
year‑on‑year alignment. As this
evidence‑based framework provides a
means by which to ensure evaluation
outcomes and objectives are appropriately
addressed and/or monitored, the decision
was taken to continue to utilise this
platform for the 2024 Board (including
Board Committee) evaluation which took
place in December 2024 (the “2024
evaluation”).
The collation and analysis of output by
BoardClic from the 2023 evaluation
disclosed a number of actionable
insights, in the form of recommendations,
which centred around four headline
themes: (i) strategic process (formation
and communication) and clarity of
messaging (internal and external);
(ii) people and culture (with specific
reference to succession planning and
employee engagement); (iii) Board
agenda, meetings and materials; and
(iv) Board dynamics and composition.
Pleasingly, significant progress was
made during 2024 in respect of the
2023 evaluation results and a number
of BoardClic’s recommendations have
now been appropriately actioned and/or
addressed, as reflected in the improved
2024 evaluation scoring. While it is clear
that there are certain follow-on themes
in the 2024 evaluation, the results remain
subject to further Board interrogation
and deliberation, following which the
appropriate action will be taken.
The timing, format and content of
monthly Board packs and meetings
will continue to remain a key focus
area throughout 2025; while progress
continued to be made during the
reporting period, output from the
2024 evaluation indicates that further
enhancements are required to reflect
both the ‘reshaped’ Group, following
the demerger of THG Ingenuity, and the
evolving needs (with reference to skills
and experience) of Board members.
Further, in light of the demerger, the
results recognise: (i) the need to educate
and engage the market throughout 2025
on the Group’s investment story to drive
and encourage investor and market
engagement and, in turn, Shareholder
value creation; and (ii) that the ongoing
development and enhancement of
workplace culture and the employee
journey must remain a Board/People
priority during 2025.
Diversity and inclusion
The Nomination Committee recognises
the importance of promoting a diverse
and inclusive corporate culture within
THG and takes seriously its commitments
and responsibilities in this area.
In line with the Code, the Nomination
Committee’s Terms of Reference confirm
its mandate to ensure that Board
appointments and succession plans
are based on merit, considered against
objective criteria and with due regard to
the benefits of Board diversity (including,
but not limited to, diversity of gender).
The Committee acknowledges the
benefits which diverse membership
may bring to Boardroom discussions
and the improved corporate governance
and enhanced decision-making which
may derive from a broader insight and
knowledge base; and which, in turn, may
positively impact Board effectiveness and
thus Shareholder value creation.
The Nomination Committee remains
aligned with THG’s stated vision to
create a diverse, inclusive and supportive
work environment which reflects the
communities within which the Group
operates. This vision is supported by
the Group’s EDI Strategy which is
premised upon the four key pillars of
visibility and representation, learning
and development, recruitment and
progression, and accessibility and
inclusion.
The Group’s EDI Committee remains
instrumental in driving positive change
and engagement in this area; EDI
representatives work closely with the EDI
Committee and the leadership teams of
the individual businesses to implement
Group-wide EDI initiatives and identify
potential areas for improvement (further
information on which can be found within
the ‘Our people’ section of the Strategic
Report).
The Chief People Officer, who has
ultimate oversight of general workforce
diversity, attends scheduled Board
meetings to provide regular on-topic
updates to ensure the Nomination
Committee, and the Board collectively,
remain suitably apprised of material
People issues, including key EDI items.
Nomination Committee Report continued
As previously confirmed, the parameters of the recruitment search for suitable independent NEDs during 2024 took into account
the importance of promoting diverse and inclusive Board membership, with specific reference to the Board diversity disclosures
required under UKLR 22.2.30(1)(a) that at least 40% of the individuals on the Board are women and at least one Board member is
from a minority ethnic background.
While the search was successful and culminated in the appointment of Milyae Park, the timing of this appointment in January
2025 meant that the Company did not comply with these targets as at 31 December 2024 when, with reference to the provisions
of UKLR 22.2.30(1)(a), only a woman held the senior Board position of SID and 33.3% of the individuals on the Board were women.
Upon the appointment of Milyae Park on 28 January 2025, the Company achieved full compliance with these diversity targets
i.e. from 28 January 2025 (and to the date of this Nomination Committee Report), at least 40% of the individuals on the Board
have been women, a woman has held one of the senior positions on the Board and at least one Board member has been from a
minority ethnic background.
Board and executive management data as at 31 December 2024, presented in accordance with UKLR 22.2.30(2), is as follows:
Number of
Board members
Percentage of
the Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men
6
66.7%
3
10
71.4
Women
3
33.3%
1
4
28.6
Non-binary
—
—
—
—
—
Not specified/prefer not to say
—
—
—
—
—
Number of
Board members
Percentage of
the Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority‑white groups)
9
100
4
11
78.6
Mixed/Multiple Ethnic Groups
—
—
—
2
14.3
Asian/Asian British
—
—
—
1
7.1
Black/African/Caribbean/Black British
—
—
—
—
—
Other ethnic group, including Arab
—
—
—
—
—
Not specified/prefer not to say
—
—
—
—
—
The source data used in the foregoing tables is provided on a self-reporting basis through completion of an electronic survey which
asks participants to confirm their name, the most accurate description of their gender identity and their ethnicity. The ‘Our people’
section of the Strategic Report contains the diversity disclosures required pursuant to section 414C of the Companies Act.
Focus for 2025
While the Nomination Committee is pleased with the progress which has been made from a Board diversity perspective during 2024
and into 2025, the ongoing monitoring of Board composition will remain a key priority during the current reporting period (particularly
in light of the demerger of THG Ingenuity). Any future enhancements will continue to take into account not only the Group’s broader
EDI vision and FCA/Group targets but also the need to ensure that: (i) the necessary leadership experience and expertise exists to
support THG’s strategic direction of travel; and (ii) a robust and diverse succession pipeline is in place throughout the organisation
(including within the Senior Management pool).
In accordance with its Terms of Reference, the Nomination Committee will also continue to keep Board Committee composition under
review, having regard to, amongst other matters, the skill sets and experience of individual NEDs and the time commitment expected
of them.
The Nomination Committee considered overall Board composition in advance of the 2024 AGM and the continuation (or otherwise) in
office of individual Directors, with reference to their performance and ability to contribute to the Board in light of the knowledge, skills
and experience required. Following due consideration, the Committee recommended to the Board that all Directors be put forward for
annual election or re-election (as appropriate) by Shareholders. The Committee will go through a similar evaluation process in advance
of the upcoming AGM and thereafter make its recommendations to the Board.
On behalf of the Nomination Committee
Charles Allen
Lord Allen of Kensington, CBE
Chair of the Nomination Committee
28 April 2025
104
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THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance
Related Party
Committee Report
“ The Related Party Committee ensures that robust governance
arrangements are in place around any transaction which is
classified as a ‘Related Party Transaction’, and which will
be challenged and approved only if considered appropriate.
The key objective is Shareholder value protection.”
Sue Farr
Chair of the Related Party Committee
Having now served as Related Party
Committee Chair for one full reporting
cycle, I am delighted to introduce
the Committee’s Report for the 2024
financial year and, at the outset, wish to
reaffirm our commitment to the ongoing
and robust oversight of all Related
Party Transactions.
The Related Party Committee was
established following Admission to
oversee and approve, if considered
appropriate, Related Party Transactions
and to ensure any conflicts of interest,
whether actual or potential, arising from
such arrangements are subject to full
and effective oversight.
I am pleased to confirm that throughout
2024, and up to the date of this
Committee Report, all Related Party
Transactions have been subject to
detailed consideration and rigorous
challenge by the Committee, founded
upon its desire to comply with the
principles of good corporate governance
and the spirit of the Code more generally.
Prior to Admission, THG divested the
Propco Group to Moulding Capital
Limited (“MCL”) which is wholly owned by
Matthew Moulding, the CEO and a major
Shareholder.
As the Propco Group owns property
assets which are occupied and utilised by
the Group, the divestment was overseen,
and approved, by the independent NEDs
in office at that time to ensure conflicts
of interest arising from the Propco
Transaction were appropriately managed
and resolved and the transaction took
place on an arm’s length basis. The lease
arrangements which operated between
the Propco Group and THG prior to the
Propco Transaction were unchanged by
the aforementioned divestment.
Following completion of the demerger of
THG Ingenuity on 2 January 2025, the
ongoing arrangements between THG and
THG Ingenuity will be subject to review
and approval by the Committee during
2025 and beyond.
In addition, to align with the Company’s
transfer to the ESCC category of the
Official List on 6 January 2025, the
Terms of Reference of the Committee
were updated to adopt the definition of
a related party as set out in Chapter 8
of the UK Listing Rules. I am confident
this will further bolster the governance
around any Related Party Transactions.
Composition and meetings
In recognition of the Related Party
Committee’s key governance function,
its Terms of Reference provide that
members must be independent NEDs,
appointed by the Board upon the
recommendation of the Nomination
Committee and in consultation with
myself as Committee Chair. Current
Committee membership therefore aligns
with this requirement and is set out in the
table opposite.
The Terms of Reference further provide
that meetings of the Related Party
Committee are held at such times as the
Committee Chair requires, although any
member of the Committee may request
a meeting if they consider it necessary.
Four Related Party Committee meetings
took place during the 2024 financial year
and, while only members are entitled
to attend, others, including external
advisers, may attend by invitation when
considered necessary and appropriate.
Role and responsibilities
As detailed within its Terms of Reference,
the principal function of the Related
Party Committee is to oversee and
approve (where appropriate) the terms
of any Related Party Transaction, having
regard to whether such arrangement
is fair, reasonable and in the best
interests of the Group (including from
the perspective of the Company and
its Shareholders). The Related Party
Committee remains cognisant of the key
role which it plays within THG’s corporate
governance infrastructure and, in
making such an assessment, is required
to ensure that any Related Party
Transaction is conducted on standard
commercial terms and on an arm’s
length basis.
While the general position is that a
Related Party Transaction may not
be authorised or implemented by the
Board unless it has been positively
recommended by the Related Party
Committee, the Terms of Reference
contain a carve-out to this; specifically,
if a transaction is deemed to be in the
best interests of the Company, the Board
may resolve that, in respect of certain
categories of Related Party Transactions,
the Committee’s views are not binding
but are of a recommendatory nature. It is
noted that no such action has been taken
by the Board historically or within the
reporting period currently under review.
Activities of the Related
Party Committee
In addition to the ongoing oversight and
approval (where appropriate) of Related
Party Transactions, the Related Party
Committee gave specific consideration
to a number of other matters during
the 2024 financial year, including the
following items:
Capital expenditure
Capital expenditure incurred by THG
on properties leased from the Propco
Group is reviewed on a regular basis,
with specific reference to the rationale
for the spend incurred and the nature
of the works completed, to ensure it is
appropriate for a commercial tenant. The
Committee concluded that the nature
of the works and level of spend were
appropriate for a commercial tenant.
Subleases
THG sought consent from the Propco
Group (as landlord) to sublet four
properties that it currently leases from
Propco Group to third parties at market
rates, thus generating cash flow for
the benefit of THG. The Committee
challenged the proposed subleases
to: (i) ensure they were in THG’s best
interests; and (ii) confirm whether the
proposal would involve variations to the
existing lease agreements (including in
respect of rent payable by the Group). It
was confirmed that no variations would
be required and that the arrangements
were in the best interests of the Group,
following which the Committee approved
the subleases.
Management charge
Under the terms of an updated Master
Services Agreement (“MSA”) dated
14 April 2023, THG charges Propco Group
for the provision of specified services.
The Committee approved such MSA
charges on a biannual basis.
Property disposals by MCL
During 2024 MCL disposed of five
properties which are occupied by THG
as tenant. The disposals reduced the
number of properties that are leased
from the Propco Group. While none of
the disposals constituted a Related
Party Transaction (as THG was not a
party to any of the transactions and the
transactions had no impact on THG’s
right to occupy the properties as tenant),
they were discussed with the Committee
from a good governance perspective and
no concerns were raised.
Demerger of THG Ingenuity
As disclosed in the circular that was
made available to Shareholders on 28
November 2024, several leases were
transferred to THG Ingenuity upon
completion of the demerger. These
assignments were approved by the
Committee.
Following the demerger, THG Ingenuity
has been designated as a related party
and the arrangements in place between
THG and THG Ingenuity will be subject to
review and approval by the Committee
going forward.
Other items
The Committee approved the details of
the Group’s charitable donation to The
Moulding Foundation. The charitable
donation is paid by the Group in lieu of
Matthew Moulding waiving as much of
his annual salary as is legally permissible.
The related party disclosures within
the consolidated financial statements
of this Annual Report were reviewed
and approved by the Related Party
Committee.
On behalf of the Related Party
Committee
Sue Farr
Chair of the Related Party Committee
28 April 2025
Members and attendance
Committee member
Position
Attendance
Sue Farr
Chair1
4/4
Dean Moore
Member2
4/4
Gillian Kent
Member3
4/4
Helen Jones
Member4
4/4
1. Sue Farr was appointed as a member of
the Related Party Committee upon her
appointment to the Board on 24 April 2023
and, in her capacity as SID, assumed the
position of Related Party Committee Chair
on 7 September 2023.
2. Dean Moore was appointed as a member
of the Related Party Committee upon his
appointment to the Board on 15 September
2022 and, in his capacity as interim SID,
assumed Chairship of the Committee on
an interim basis on 24 January 2023.
He thereafter stepped down from this
position, but remained a member of the
Committee, when Sue Farr assumed the
position of Related Party Committee Chair
on 7 September 2023.
3. Gillian Kent was appointed as a member
of the Related Party Committee on
24 January 2023.
4. Helen Jones was appointed as a member
of the Related Party Committee on
21 July 2023.
106
107
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance
Sustainability
Committee Report
“ Throughout 2024 the Sustainability Committee continued
to oversee the delivery of THG’s 2030 Sustainability
Strategy, THG x Planet Earth, ensuring that sustainability
remains embedded within decision-making across the
Group. The Committee plays a vital role in holding the Group
to account to deliver on its stated commitment to place
sustainability at the heart of all THG operations.”
Sue Farr
Chair of the Sustainability Committee
I am pleased to welcome you to the
Sustainability Committee Report for the
2024 financial year, having now served
as Sustainability Committee Chair for just
over one year. As detailed in last year’s
Committee Report, Iain McDonald stepped
down as Committee Chair in March 2024,
having so ably led the Committee since
its establishment, and I would, again,
like to take this opportunity to thank Iain
for his valued leadership, contribution
and insights.
During 2024 we continued to deliver on
our 2030 Sustainability Strategy and
THG’s inclusion within Sustainability
Magazine’s global ‘Top 250 Companies
in Sustainability’ report demonstrates the
strong and tangible progress which the
business has made.
While greenhouse gases continue to heat
up the atmosphere, with 2024 being the
hottest year on record, we continued to
make progress towards our SBTi-approved
net-zero targets. The Group also received
external recognition for its supplier
engagement programme, THG PACT, which
was awarded the Supply Chain Initiative
of the Year, EMEA, at the Environmental
Finance: Sustainable Company Awards
2024. This award acknowledges
companies which have taken steps to
build a resilient and sustainable supply
chain and demonstrated excellence in
the industry, and it is therefore clear
recognition of THG’s commitment to
transform its approach to decarbonisation.
Significant progress was made across all
three pillars of our 2030 Sustainability
Strategy (i.e. Protecting climate and
nature, Supply chain and circularity, and
People and communities) and notable
2024 highlights included:
– the receipt of initial supplier emissions
data for inclusion in THG’s GHG
reporting, following engagement
through THG PACT;
– the launch of the Group’s employee
voice platform to track employee
sentiment through regular surveys;
– the introduction of new services to the
THG Eco portfolio i.e. sustainable fuel
solutions and compliance;
– the collation of baseline data for the
Zero Waste programme for all in-scope
sites and onboarding of a new waste
vendor (which is expected to improve
reporting and support solutions to
avoid sending waste to landfill);
– completion of Sedex audits in
operational sites, ensuring THG holds
itself to equivalent supplier standards;
– commencement of preparations
to ensure necessary resources
and expertise are in place to drive
compliance with the Corporate
Sustainability Reporting Directive
(“CSRD”);
– completion of the first TCFD
analysis, providing a view of future
climate‑related risks of THG properties
and high volume commodities
purchased; and
– in conjunction with the Remuneration
Committee, determining relevant ESG
metrics for inclusion within the LTIP
targets of certain Executive Directors.
Composition and meetings
In satisfaction of the relevant provisions
of the Terms of Reference, membership
of the Sustainability Committee during
2024 comprised myself, Sue Farr, SID
and Sustainability Committee Chair, Mark
Jones, the Company’s former Group
Chief Sustainability Officer (who has
now been replaced with Clare Clark, the
Group’s Director of Sustainability), Steven
Whitehead, Group Commercial Director,
and Philip Pratt, an external adviser to the
Committee.
While the Terms of Reference require that
at least three Sustainability Committee
meetings must be held annually, and at
such other times as the Sustainability
Committee Chair may require, six
scheduled meetings took place during
2024, reflecting the Group’s robust
commitment to its sustainability-related
initiatives and goals.
Member attendance at these meetings
is set out in the table opposite. Although
only Sustainability Committee members
(and those entitled to be present as
observers) have the right to attend
meetings, external advisers may be
invited to attend when considered
appropriate, together with any other
individuals whom the Committee
considers necessary and/or desirable to
be in attendance.
Role and responsibilities
The Terms of Reference of the
Sustainability Committee narrate that its
key function is to ensure that the Group
has appropriate and effective strategies,
policies and operational controls in place
for its business to be conducted in a
responsible manner, including monitoring
performance against the 2030
Sustainability Strategy and applicable
ESG targets. In addition to reporting
any material sustainability-related risks,
identified and managed through the
Group’s risk management process, to the
Risk Committee, other specified duties
of the Sustainability Committee include
reviewing and monitoring:
– Senior Management’s assessment
of the health, safety, security,
environmental and social impacts
resulting from the Group’s operations,
with particular regard to the impact on
its employees, suppliers, contractors
and host communities;
– the Group’s systems for compliance
with applicable sustainability-related
legal and regulatory requirements
and its performance against such
requirements; and
– the Group’s systems, strategies, policies
and targets in relation to, amongst other
matters, emissions, energy and carbon
management, climate change, waste
and recycling, ensuring that they reflect
best practice and global developments.
In discharging its duties the Sustainability
Committee may seek independent
professional advice on any matter it
deems necessary and access other
appropriate resources which it requires to
function effectively, including support and
assistance from Group Secretariat.
Activities of the Sustainability
Committee
A summary of the key activities
undertaken by the Sustainability
Committee during the 2024 financial
year is as follows:
– review of the Group’s progress against
the 2030 Sustainability Strategy’s
goals and targets;
– review of future climate-related risks
through scenario analysis, assessing
the long-term potential impacts on the
Group;
– annual review and update of the
Group’s Modern Slavery Statement
and Environmental Policy;
– annual review and update of the
Group’s Supply Chain Standards to
confirm the expectations of suppliers;
– review of conflicting packaging
recyclability guidance notes to agree
on a preferred business approach,
and monitoring progress against
the Group’s target to achieve
100% recyclable packaging across
own‑brand products;
– monitoring progress against the
Group’s target to achieve a 100%
Sedex audit completion rate by Tier 1
and 2 suppliers through delivery of the
Social Responsibility Strategy;
– review of THG’s progress towards the
Group’s science-based targets through
delivery of the Net Zero Strategy and
the THG PACT initiative;
– review of employee voice survey
results and associated action plans;
and
– biannual deep dive into the Group’s
HSE performance and progress review
against HSE metrics and targets.
Focus for 2025
During the current financial year it is
anticipated that key areas of focus
for the Sustainability Committee will
continue to be as follows:
– to oversee and make
recommendations to Senior
Management and the Board for
appropriate actions to be taken in
respect of the Group’s sustainability
compliance and human rights
strategies, policies, programmes
and activities (including the 2030
Sustainability Strategy);
– to undertake the biannual review of
the 2030 Sustainability Strategy’s
goals and targets, assessing the
impact on Group-level targets
following the demerger of THG
Ingenuity;
– to monitor the impact on the Net Zero
Strategy following the demerger of
THG Ingenuity through a rebaselining
exercise;
– to continue to monitor progress
against colleague engagement
metrics;
– to monitor and review the Group’s
progress towards compliance with the
requirements of the CSRD, seeking
to understand the potential risks and
uncertainties based on outcomes of
the double materiality assessment;
– to track the progress of THG’s
PACT initiative, gather supplier
emissions and monitor suppliers’
progress towards setting their own
science‑based targets;
– to monitor and review the delivery of
the Social Responsibility Strategy to
ensure supplier compliance with THG’s
Supply Chain Standards; and
– to oversee and ensure continued
progress with respect to THG’s HSE
metrics and targets.
On behalf of the Sustainability
Committee
Sue Farr
Chair of the Sustainability Committee
28 April 2025
Members and attendance
Committee member
Position
Attendance
Sue Farr
Chair1
5/5
Steven
Whitehead
Member2
2/6
Philip Pratt
Member3
6/6
Clare Clark
Member4
n/a
Mark Jones
Former
member4
6/6
Iain McDonald
Former
Chair5
1/1
1. Sue Farr was appointed Sustainability
Committee Chair on 18 March 2024,
following the announcement that Iain
McDonald would step down as a Director
on 31 March 2024.
2. Steven Whitehead serves as a member of
the Sustainability Committee in his capacity
as Group Commercial Director. While Steven
was unable to attend certain meetings
during 2024, he reviewed the relevant
papers and fed back comments to the
Sustainability Committee Chair in advance
of these meetings.
3. Philip Pratt serves as a member of the
Sustainability Committee in the capacity
of external sustainability adviser.
4. Mark Jones served as a member of
the Sustainability Committee from his
appointment as Group Chief Sustainability
Officer in June 2023 until his departure from
the Company in December 2024, at which
point he was replaced by Clare Clark, the
Group’s Director of Sustainability.
5. Iain McDonald stepped down as
Sustainability Committee Chair on
18 March 2024, following the announcement
that he would step down as a Director on
31 March 2024.
108
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THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance
Directors’
Remuneration Report
Composition and meetings
The Terms of Reference provide that
the Remuneration Committee must
comprise not less than three NEDs, the
majority of whom must be independent,
who are selected by the Board, on the
recommendation of the Nomination
Committee and in consultation with
myself, as Remuneration Committee
Chair. In satisfaction of these provisions
and recognising the Code’s position
that only independent non-executive
directors should sit on a company’s
remuneration committee, membership of
the Remuneration Committee comprised
four independent NEDs during the 2024
financial year (and up to the date of
this Report).
In accordance with its Terms of Reference,
the Remuneration Committee met on eight
occasions during 2024, with member
attendance set out in the table opposite.
While only Committee members are
entitled to attend Committee meetings,
others, such as Senior Management and
external advisers, may attend by invitation
as and when considered appropriate, as
was the case during the year. No Director
is present during a decision relating to
their own remuneration.
Role and responsibilities
As detailed within its Terms of
Reference, a primary responsibility of the
Remuneration Committee is to determine
the remuneration package of Executive
Directors and the Independent Chair.
More generally, it is the responsibility of
the Remuneration Committee to ensure
that remuneration practices and policies
support the Group’s strategy and promote
its long-term, sustainable success. Other
key duties of the Committee include:
– approving the design of, and determining
targets for, any performance-related pay
schemes operated by the Company and
the payments made thereunder;
– exercising its use of discretion, where
appropriate, to override formulaic
remuneration outcomes;
– reviewing the ongoing appropriateness
and relevance of the Remuneration
Policy (further details on which follow),
together with the approach to its
implementation (in the context of
both the pay policies and practices
across the wider workforce and the
meritocratic and values-led culture
within the organisation), while consulting
with, and seeking approval from,
Shareholders (and other stakeholders)
as appropriate; and
– reviewing, and having regard to, pay
and employment conditions across the
Company and/or Group as a whole,
including those of the Executive
Leadership Team.
Remuneration Policy
The Remuneration Committee reviewed
the Remuneration Policy prior to the 2024
AGM and concluded that it remained
appropriate, subject to the following
minor amendments to provide additional
flexibility and ensure market alignment:
– updates to the wording on Benefits for
Executive Directors;
– updates to allow greater flexibility for
all Executive Directors to receive some,
or all, of any bonus payments directly,
rather than being waived in lieu of a
charitable donation; and
– minor wording clarifications on how
Executive Directors, other than the
CEO, Matthew Moulding, and former
COO, John Gallemore, are referred to,
reflecting Damian Sanders’ position
as CFO.
The Remuneration Policy was
subsequently approved by 94.97% of
those Shareholders who voted on the
relevant resolution at the 2024 AGM.
The Remuneration Committee will, as
mandated, continue to review the ongoing
suitability of the Remuneration Policy
to ensure it remains fit for purpose and
evolves as required.
2024 remuneration
No salary increases were awarded to
the Executive Directors during the 2024
financial year and, as was the case in the
2021, 2022 and 2023 financial years,
Matthew Moulding waived as much as
was legally permissible of his base salary
in return for the Group making a charitable
donation of similar value.
The Remuneration Committee operated
the Remuneration Policy as intended
during 2024. It should be noted that all
Executive Directors opted to waive their
entitlement to participate in the 2024
annual bonus plan.
The introduction of an LTIP for Executive
Directors (excluding Matthew Moulding)
was approved by Shareholders at the
2022 AGM, although no such LTIP awards
were made in either 2022 or 2023.
As disclosed in the 2023 Annual Report,
the Remuneration Committee agreed during
2023 that, in light of ongoing transactions
and restructuring, it would postpone
granting any awards until greater certainty
and clarity existed around the future shape
of the business which, in turn, would
ensure that it was in a position to set robust
and meaningful targets. This process,
alongside my appointment as Remuneration
Committee Chair in December 2023,
resulted in the Committee taking the
decision to delay granting Executive
Director LTIP awards for the 2023 financial
year.
As a consequence, we granted LTIP awards
of nil-cost options in respect of the 2023
financial year on 7 March 2024, and in
respect of the 2024 financial year on 1
August 2024, to each of the former COO,
John Gallemore, and to the CFO, Damian
Sanders.
As Remuneration Committee Chair I
consider it important that, as a Committee,
we are able to set meaningful and robust
LTIP targets which reflect the Group’s
evolving composition and structure.
These awards are therefore linked to
relative TSR (80%) and a stretching ESG
target (20%). Further details are set out
within the ‘Scheme interests awarded
(audited)’ section of the Annual Report on
Remuneration. Relative TSR was chosen
as a key financial metric due to its inherent
alignment with the creation of long-term
Shareholder value and, as discussed in the
‘Remuneration for 2025 – Annual bonus’
section which follows, assessment of
progress against ESG strategic priorities
will now take place within the LTIP, where
progress against rigorous three-year targets
can be measured.
Following the demerger of THG Ingenuity,
we reviewed the ESG targets for both LTIP
grants to assess whether they remained
relevant in the go-forward business context.
We concluded that, while the metrics
do remain relevant, the precise targets
require amendment to reflect the practical
implications of the demerger. Specifically,
for the LTIP granted in respect of the: (i)
2023 financial year, the Zero Waste TRUE
Gold Certification target by the end of 2026
still applies, but the in-scope, operational
sites will be reduced to those sites over
which the Company retains control
following the demerger; and (ii) 2024
financial year, while there is no proposal to
amend the numerical targets, the in‑scope
spend will be amended to relate only to
suppliers of THG Beauty and THG Nutrition.
“In the context of an evolving and challenging market
landscape, our focus throughout 2024, and into 2025,
has been on maintaining an approach to reward which is
fair and motivating for Executives, as well as ensuring that,
with particular regard to the demerger of THG Ingenuity, the
Company’s broader strategy to maximise Shareholder value
is supported by our approach to remuneration.”
Helen Jones
Chair of the Remuneration Committee
Having now served as Remuneration
Committee Chair for one full financial
reporting cycle, I am pleased to introduce
the 2024 Directors’ Remuneration Report
and confirm that, against an ever-evolving
and competitive remuneration landscape,
the promotion of market-aligned and good
practice approaches to remuneration
corporate governance remained a key
focus of the Committee during the year
(and up to the date of this Report).
As in previous years, the Remuneration
Committee continued to monitor key
trends in executive and wider workforce
remuneration throughout 2024 and was
kept closely informed of the Group’s
performance, in line with its commitment
to align remuneration with the creation
of Shareholder value and thus ensure
the Company’s leadership team is
appropriately motivated and incentivised
to deliver long-term, sustainable growth
for all Shareholders.
The demerger of THG Ingenuity into an
independent private company was a key
focus of the Remuneration Committee
over the second half of the year, and,
in this regard, we have worked closely
with Senior Management to support the
Company’s broader strategy to maximise
Shareholder value. Completing on
2 January 2025, the demerger facilitated
the simplification of THG’s business model
as a more focused global consumer beauty
and nutrition group with an attractive
market growth profile and strong cash
generation potential. As such, we are
confident in our future evolution and,
as a Committee, we look forward to the
challenge of continuing to ensure that
our remuneration framework incentivises
our talented workforce going forward.
With effect from completion of the
demerger, John Gallemore joined the
Board of THG Ingenuity as Executive
President and resigned from the
Board and as COO. I would like to
take this opportunity to thank John
for his contribution, dedication and
commitment to THG since he co-founded
the Company, including in his roles as
former CFO and latterly COO. Details
of the treatment of John Gallemore’s
remuneration are set out elsewhere in
this Directors’ Remuneration Report.
This Directors’ Remuneration Report has
been prepared in accordance with The
Large and Medium-sized Companies
and Groups (Accounts and Reports)
Regulations 2008 (as amended), the
Listing Rules and the Code and is divided
into three sections:
– this annual statement from me, the
Remuneration Committee Chair;
– the Remuneration Policy, as approved
by Shareholders at the 2024 AGM; and
– the Annual Report on Remuneration
which details payments made to
Directors during 2024 and which is
subject to an advisory Shareholder
vote at the forthcoming AGM.
Members and attendance
Committee member
Position
Attendance
Helen Jones
Chair1
8/8
Dean Moore
Member2
8/8
Gillian Kent
Member3
6/8
Sue Farr
Member4
8/8
1. Helen Jones was appointed as a member of
the Remuneration Committee on 21 July 2023
and subsequently as Remuneration
Committee Chair on 8 December 2023.
2. Dean Moore was appointed as Remuneration
Committee Chair upon his appointment to the
Board on 15 September 2022. He stepped
down from this position, remaining as a
member of the Committee, upon Helen
Jones’ appointment on 8 December 2023.
3. Gillian Kent was appointed as a member
of the Remuneration Committee on
24 January 2023. While Gillian was unable
to attend two meetings during 2024, she
reviewed the relevant papers and fed back
comments to the Remuneration Committee
Chair in advance of these meetings.
4. Sue Farr was appointed as a member of the
Remuneration Committee on 21 July 2023.
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Governance
Financial Statements
Additional Information
Governance
2024 remuneration continued
We are satisfied that the amended targets
retain their original level of stretch while
now relating directly to areas within the
remaining Group over which the Executive
Directors have influence.
In the context of John Gallemore’s
resignation from the Board, the
Remuneration Committee determined
that he would be treated as a ‘good
leaver’ and, as such, his in-flight
LTIP awards will vest on their normal
vesting dates, subject to their original
performance conditions.
The Remuneration Committee intends
to exercise discretion to disapply time
pro-rating on his LTIP awards at the time
of vesting. In making this decision, the
Committee considered the instrumental
role that John Gallemore has played in
the success of THG since its founding
in 2004, the context around fair and
consistent treatment between John
Gallemore and other below-Board
employees departing as a result of
the demerger of THG Ingenuity, and
the delayed grant of both the 2023
and 2024 LTIP awards compared to
the normal annual cycle.
Further details on the treatment of John
Gallemore’s remuneration are contained
within the ‘Treatment of John Gallemore’s
2023 and 2024 LTIP awards’ section of
the Annual Report on Remuneration.
No other discretion was exercised by
the Remuneration Committee during the
2024 financial year in respect of the
above remuneration outcomes, and no
Director was involved in deciding their
own remuneration outcome.
Remuneration for 2025
The Remuneration Committee intends to
implement the Remuneration Policy for
Matthew Moulding and Damian Sanders
during 2025 as follows:
Base salary
While the Remuneration Committee
initially proposed a salary increase for
the Executive Directors in line with the
wider workforce, the Executive Directors
informed the Committee that they would
forego any proposed salary increase for
2025 (as has been the case each year
since 2021).
Annual bonus
In line with the Remuneration Policy,
annual bonus awards will be granted with
a maximum opportunity of 100% of base
salary for each of the Executive Directors.
The measures and weightings for
the 2025 bonus awards for Matthew
Moulding and Damian Sanders will be:
– Free Cash Flow (35%);
– Adjusted EBITDA (continuing)1
(35%); and
– Group Sales (continuing)1 (30%).
As detailed in the 2023 Annual Report,
the Remuneration Committee considers
that, given the longer-term ambition of
the Group’s ESG goals, ESG metrics,
which previously featured within the
annual bonus assessment, are better
aligned with the LTIP time horizon.
LTIP
In line with the current Remuneration
Policy, the Remuneration Committee
intends to grant an award of up to
250% of base salary to Damian Sanders
under the LTIP following the 2025 AGM.
The award will be subject to stretching
financial and strategic performance
targets which will be disclosed at the
time of grant and measured over a
three-year period, with a further two-year
post-vesting holding period applying in
line with the relevant Code requirement
and market best practice.
Consideration of
stakeholder views
Prior to annually reviewing the
remuneration of the Executive Directors,
the Remuneration Committee considers
pay, benefits and share scheme practices
for employees across the Group. While
no direct workforce engagement took
place on Executive Director remuneration
specifically during the reporting period,
the implementation of an LTIP for
Executive Directors is aligned with the
approach across the wider business
which has broad equity-based incentive
plans in place.
The Group is committed to promoting
and maintaining good relations with
employees and, where relevant, their
representative bodies as part of its
broader workforce engagement strategy,
and measures were taken to enhance
the level of remuneration-specific
engagement during 2024 via two
employee engagement surveys (the
“Surveys”).
The Surveys provided employees globally
with the opportunity to share feedback
on all aspects of life at THG, including
pay and benefits, on an anonymous
basis. While the results of the Surveys
continue to be interrogated to ensure full
use is made of the insights generated,
they will be used to help shape and
inform future workforce engagement
initiatives and strategies, including
remuneration‑related, across the Group.
AGM
I very much look forward to meeting with
Shareholders at the forthcoming AGM
to discuss any queries or comments on
this Directors’ Remuneration Report, the
current Remuneration Policy or on Group
remuneration matters more generally.
If Shareholders have any concerns or
questions that they would like to discuss
prior to the AGM, I can be contacted via
the Company Secretary.
On behalf of the Remuneration
Committee
Helen Jones
Chair of the Remuneration Committee
28 April 2025
Directors’ Remuneration Report continued
Remuneration Policy
Remuneration Policy table
As previously detailed, the current Remuneration Policy was approved by Shareholders at the 2024 AGM, with 94.97% of votes cast in
favour. The following table provides a summary of each element of the Remuneration Policy to assist with the understanding of this
Directors’ Remuneration Report. Full details of the Remuneration Policy can be found on pages 147 to 156 of the 2023 Annual Report.
Component
and objective
Operation
Opportunity
Performance measures
Base salary
To enable the Group
to attract, motivate
and retain the
people it needs to
maximise the value
of the business
Generally reviewed each year, with
increases effective 1 January.
Salary levels take account of:
– salaries at FTSE companies of
broadly similar size or sector to
THG;
– salary increases across the rest of
the UK business;
– role, personal performance and
experience; and
– business performance and the
external environment.
There is no fixed maximum.
Salaries in respect of the year under
review (and for the following year)
are disclosed in the Annual Report on
Remuneration.
Salary increases for Executive Directors
will normally not exceed those of the
wider workforce over the period this
Remuneration Policy applies. Where
increases are awarded in excess of
the wider employee population, the
Remuneration Committee will provide the
rationale in the relevant year’s Annual
Report on Remuneration (e.g. if there is a
material change in the responsibility, size
or complexity of a role).
n/a
Pension
To provide a level of
retirement benefit
that is competitive
in the relevant
market
Executive Directors receive pension
contributions either as a direct
payment or a cash allowance.
Base salary is the only element of
remuneration that is pensionable.
Executive Directors receive a Company
contribution of a maximum in line with
the wider workforce for the relevant
country. This is currently set at 3% of
pensionable salary for UK Executive
Directors.
Pensionable salary is determined in line
with the approach taken for the wider
workforce which is currently in line with
auto-enrolment levels.
n/a
Benefits
To provide a level
of benefits that is
in line with relevant
market practice
Executive Directors receive benefits
set at an appropriate level taking into
account total remuneration, market
practice, the benefits provided to
other employees in the Group and
individual circumstances. This may
include, but is not limited to, medical
insurance benefits, permanent health
insurance and life assurance.
The Remuneration Committee
reserves the right to introduce other
benefits (e.g. in the event this is
necessary to attract and/or retain key
Executive Directors).
Other benefits, including all employee
share schemes, may be introduced
from time to time to ensure the
benefits package is appropriately
competitive and reflects the needs
and circumstances of the Group and
individual Executive Directors.
Benefits may vary by role and the level is
determined each year to be appropriate
for the role and circumstances of
individual Executive Directors.
Whilst the Remuneration Committee has
not set an absolute maximum on the
level of benefits Executive Directors may
receive, the value of benefits is set at a
level which the Remuneration Committee
considers to be appropriately positioned
taking into account relevant market
levels based on the nature and location
of the role, the level of benefits provided
for other employees in the Group and
individual circumstances.
The Remuneration Committee retains
the discretion to approve a higher cost in
exceptional circumstances (e.g. relocation
expenses or an expatriation allowance on
recruitment) or in circumstances where
factors outside the Group’s control have
changed materially (e.g. market increases
in insurance costs).
n/a
1. Adjusted EBITDA (continuing) and Sales (continuing) not including discontinued categories.
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Governance
Financial Statements
Additional Information
Governance
Remuneration Policy table continued
Component
and objective
Operation
Opportunity
Performance measures
Annual bonus
To focus Executive
Directors on
achieving
demanding annual
targets relating to
Group performance
Performance targets are set at the start of each
financial year and aligned with the annual budget
agreed by the Board. At the end of the financial
year in question, the Remuneration Committee
determines the extent to which these targets have
been achieved.
50% of the total bonus payable is normally
paid in cash with 50% deferred in nil-cost
options over Ordinary Shares. These options are
exercisable after three years, subject to continued
employment and malus (in whole or in part) during
the deferral period in the event of a material
misstatement in accounting records, gross
misconduct, calculation error or corporate failure.
Cash bonuses may be subject to clawback over
the deferral period in similar circumstances as
identified above.
A payment equivalent to the dividends that would
have accrued on deferred bonus awards that vest
may be made to participants on vesting.
Maximum opportunity:
200% of base salary
(with 50% deferred into
Ordinary Shares vesting
after three years).
Target opportunity:
50% of maximum
opportunity.
Threshold opportunity:
at most, 25% of
maximum opportunity.
Matthew Moulding
will have a reduced
opportunity of 100%
of salary which will be
payable fully in cash.
The bonus will be based on the
achievement of financial and
non‑financial performance targets which
may vary year-to-year but at least 50%
of the total opportunity will be based on
financial performance.
Details of the measures and weighting
on which the bonus will be based will be
disclosed in the relevant Annual Report
on Remuneration. If the Remuneration
Committee determines certain targets to
be deemed commercially sensitive, the
targets will be disclosed retrospectively.
The Remuneration Committee has
discretion to adjust the formulaic bonus
outcomes (including down to zero) within
the limits of the scheme if the formulaic
outcome is not reflective of underlying
business performance.
LTIP
To incentivise
Executive Directors
while providing
alignment with
Shareholder
interests
Awards are granted annually in the form of
nil‑cost options or conditional awards of Ordinary
Shares. These will vest at the end of a three-year
period subject to continued employment and
satisfaction of the performance conditions.
A further two-year holding period will apply
post vesting.
The Remuneration Committee may award
dividend equivalents on awards to the extent that
these vest.
Malus and clawback provisions will apply to
enable the Company to recover sums paid or
withhold the payment of any sum in the event of a
material misstatement resulting in an adjustment
to the audited consolidated accounts of THG or
action or conduct which, in the reasonable opinion
of the Board, amounts to employee misbehaviour,
fraud or gross misconduct.
Normally annual awards
of up to 250% of base
salary. In exceptional
circumstances, such
as to secure an
external appointment
or in specific retention
scenarios, an award
of up to 300% of base
salary may be made.
Matthew Moulding
will not be eligible to
participate in the LTIP.
The majority of the awards will be based
on financial metrics, with the balance
based on strategic metrics.
The Remuneration Committee retains
discretion, in exceptional circumstances,
to change performance measures and
targets and the weightings attached
to performance measures part way
through a performance period if there is
a significant and material event which
causes the Remuneration Committee to
believe the original measures, weightings
and targets are no longer appropriate.
The Remuneration Committee also has
discretion to adjust the formulaic vesting
outcome (including down to zero) within
the limits of the scheme if the formulaic
outcome is not reflective of underlying
business performance.
Shareholding
requirement
To align Executive
Director and
Shareholder
interests and
reinforce long-term
decision making,
including for a
period following
cessation of
employment
Matthew Moulding is required to retain at least
50% of any incentive awards that vest (net of tax)
until he has built up a personal holding of Ordinary
Shares worth at least 350% of salary.
All other Executive Directors must build up and
subsequently retain a shareholding of at least
200% of salary over a five-year period from the
date of their appointment to the Board.
A post-cessation shareholding requirement of
350% of salary to be held for two years after an
Executive Director’s employment is terminated
in the case of Matthew Moulding, and 200% of
salary for all other Executive Directors (or full
actual holding if lower).
n/a
n/a
Chair and
NED fees
To attract and
retain NEDs of the
highest calibre with
broad commercial
experience relevant
to the Group
NEDs are paid a basic annual fee. Additional
fees may be paid to NEDs who chair a Board
Committee and/or who sit on a Board Committee
to reflect additional responsibilities.
The fees paid to NEDs are determined by the
Board and may be paid in a mix of cash and
Ordinary Shares.
Fee levels are reviewed periodically, with any
adjustments effective 1 January. Fees are reviewed
by considering external advice on best practice
and fee levels at other FTSE companies of broadly
similar size and sector to THG. Time commitment
and responsibility are also considered when
reviewing fees.
Fee increases will be
applied considering the
outcome of the review.
The fees paid to NEDs
in respect of the year
under review (and for
the following year)
are disclosed in the
Annual Report on
Remuneration.
n/a
Directors’ Remuneration Report continued
Annual Report on Remuneration
This section covers the reporting period from 1 January 2024 to 31 December 2024 and provides details of the implementation of the
Remuneration Policy during this period, as well as the intended implementation during the current 2025 reporting period.
Single total figure of remuneration (audited)
The following table provides a single figure for total remuneration of the Directors for the financial year to 31 December 2024,
together with comparative figures for the financial year to 31 December 2023. The values of each element of remuneration are based
on the actual value delivered, where known. The value of the annual bonus includes both the cash element and the element deferred
into Shares.
Salary
and fees
(£’000)
Benefits
(£’000)
Pension
(£’000)
Total
fixed pay
(£’000)
Annual
bonus
(£’000)
LTIP
(£’000)
Other
(£’000)
Total
variable pay
(£’000)
Total
(£’000)
Executive Directors
Matthew
Moulding1
2024
23
9
1
32
0
0
0
0
32
2023
23
6
0
29
0
0
0
0
29
John
Gallemore1, 5
2024
450
4
1
455
0
0
0
0
455
2023
450
5
1
456
0
0
0
0
456
Damian
Sanders2
2024
500
7
0
507
0
0
0
0
507
2023
470
7
0
477
0
0
0
0
477
NEDs
Charles
Allen
2024
424
0
0
424
0
0
0
0
424
2023
397
0
0
397
0
0
0
0
397
Edward
Koopman
2024
36
0
0
36
0
0
0
0
36
2023
34
0
0
34
0
0
0
0
34
Gillian
Kent
2024
105
0
0
105
0
0
0
0
105
2023
99
0
0
99
0
0
0
0
99
Dean
Moore
2024
100
0
0
100
0
0
0
0
100
2023
102
0
0
102
0
0
0
0
102
Sue
Farr3
2024
127
0
0
127
0
0
0
0
127
2023
74
0
0
74
0
0
0
0
74
Helen
Jones3
2024
100
0
0
100
0
0
0
0
100
2023
47
0
0
47
0
0
0
0
47
Former NEDs
Damian
Sanders2
2024
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2023
37
0
0
37
0
0
0
0
37
Iain
McDonald4
2024
17
0
0
17
0
0
0
0
17
2023
53
0
0
53
0
0
0
0
53
1. Since Admission and subject to minimum statutory limits, Matthew Moulding has elected to waive his salary. The salaries and bonuses detailed here are the
amounts received by Matthew Moulding in the periods. For the 2023 financial year, the salary waived by Matthew Moulding was £727,480. For the 2024 financial
year, the salary waived by Matthew Moulding was £726,972. For the 2023 and 2024 financial years, both Matthew Moulding and John Gallemore waived their
entitlement to participate in the annual bonus plan.
2. Damian Sanders held the position of NED during the 2023 financial year, from 1 January 2023 until he was appointed as CFO on 24 January 2023. His 2023
remuneration has therefore been split between the relevant periods of service in each role, with each element pro-rated to reflect his position as NED from
1 January 2023 to 23 January 2023 and subsequent position as CFO from 24 January 2023 to 31 December 2023. For the 2024 financial year, Damian Sanders
waived his entitlement to participate in the annual bonus plan, as he did for the 2023 financial year.
3. The figures for the 2023 financial year have been pro-rated to reflect the appointments of Sue Farr and Helen Jones to the Board from, respectively, 24 April 2023
and 21 June 2023.
4. Iain McDonald stepped down from the Board on 31 March 2024.
5. With effect from the completion of the demerger of THG Ingenuity on 2 January 2025, John Gallemore joined the THG Ingenuity Board as Executive President and
resigned from the Board and as COO. John Gallemore’s fixed remuneration was therefore paid until 2 January 2025, after which date he ceased to be employed by
the Company. For further details regarding the treatment of John Gallemore’s variable remuneration, please refer to the ‘Treatment of John Gallemore’s 2023 and
2024 LTIP awards’ section which follows.
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Governance
Financial Statements
Additional Information
Governance
Base salary (audited)
The base salaries of the Executive Directors are typically reviewed on an annual basis, with any increases effective from 1 January.
As detailed within the Remuneration Policy summary, when determining any increases the Remuneration Committee compares
the Group’s remuneration packages for its Executive Directors with those of directors in FTSE companies of a similar size and/
or sector to THG and also takes account of salary increases across the rest of the UK business, an individual’s role and personal
performance, business performance and the external environment.
No salary increases were awarded to Executive Directors during the 2024 reporting period. As such, at 31 December 2024 salary
levels were as follows:
– Matthew Moulding: £750,000;
– Damian Sanders: £500,000; and
– John Gallemore: £450,000.
As previously stated, Matthew Moulding waived as much as was legally permissible of his base salary during 2024 in return for
the Group making a charitable donation to The Moulding Foundation of a similar value. For the financial year ending 31 December
2024, the salary waived by Matthew Moulding was £726,972.
Pension (audited)
As part of their remuneration arrangements, the Executive Directors are entitled to receive pension contributions from the
Company. Under these arrangements, they can elect for those contributions to be paid in the form of taxable pension allowance
or direct payments into a personal pension plan or the Group’s UK defined contribution scheme.
During 2024 £504 and £1,321 were paid into the personal pension plans of Matthew Moulding and John Gallemore respectively.
These amounts represent 3% of pensionable salary, in line with the UK wider workforce. Executive Directors participate in a
Qualifying Earnings scheme where employer contributions are capped at a monthly threshold, such that the effective contribution
rate is less than 3% of salary in practice. Damian Sanders opted out of the Qualifying Earnings scheme in April 2023 (hence he
did not receive any pension contributions from the Company during 2024). None of the Executive Directors participate in a Group
defined benefit pension scheme.
Benefits (audited)
In line with the current Remuneration Policy, benefits in kind for each of the Executive Directors comprised medical insurance
benefits, permanent health insurance and life assurance.
Bonus awards (audited)
The Executive Directors opted to waive their entitlement to participate in the annual bonus plan for the 2024 reporting period (as
in prior years). As such, no discretion was exercised by the Remuneration Committee during the 2024 financial year in respect of
the annual bonus plan.
Scheme interests awarded (audited)
2023 LTIP award
As noted in the Chair’s letter, the Remuneration Committee decided to delay LTIP grants in respect of the 2023 financial year until
March 2024. On 7 March 2024 the following awards were made under the LTIP:
Director
Type of award
Number of Ordinary
Shares subject to award
Face value of award¹
Damian Sanders
Nil-cost option
1,939,788
£1,250,000
John Gallemore
Nil-cost option
1,745,810
£1,125,000
1. Based on a share price of 64.44p per Ordinary Share.
The performance period of these awards is three years from the date of grant, with the following targets:
Measure
Weighting
% of award vesting for
threshold performance
Threshold
Maximum
Relative TSR vs
FTSE 250 Index
80%
25
Median of the
comparator group
Upper quartile of the
comparator group
ESG measure¹
20%
n/a
n/a
Target achieved
1. ESG measure: by the end of 2026, THG operational sites to achieve Zero Waste TRUE Gold Certification.
For TSR performance between threshold and maximum, vesting will be determined on a straight-line basis. The performance
outcome for the ESG measure is assessed using a binary approach.
These awards will vest on the third anniversary of the date of grant and will be subject to a further two-year holding period.
Directors’ Remuneration Report continued
Following the demerger of THG Ingenuity, the Remuneration Committee reviewed the ESG targets for both LTIP grants to assess
whether they remained relevant in the go-forward business context and concluded that, while the metrics do remain relevant, the
precise targets require amendment to reflect the practical implications of the demerger. Specifically, for the 2023 LTIP, the Zero
Waste TRUE Gold Certification target by the end of 2026 still applies, but the in-scope, operational sites will be reduced to those
sites over which the Company retains control following the demerger.
2024 LTIP award
As further noted in the Chair’s letter, the Remuneration Committee intends to grant annual LTIP awards on a normal cycle from
2024 onwards, typically following the Company’s annual general meeting. A 2024 LTIP award was therefore granted to each of
Damian Sanders and John Gallemore on 1 August 2024 as follows:
Director
Type of award
Number of Ordinary
Shares subject to award
Face value of award¹
Damian Sanders
Nil-cost option
1,923,077
£1,250,000
John Gallemore
Nil-cost option
1,730,7692
£1,125,000
1. Based on a share price of 65.00p per Ordinary Share.
2. The Grant of Share Options RNS published by the Company on 1 August 2024 erroneously stated that John Gallemore had been granted an award over
1,923,077 Ordinary Shares (equal to the award granted to Damian Sanders). The table above sets out the correct number of Ordinary Shares over which
an award was granted, consistent with the Directors’ Remuneration Policy.
The performance period of these awards is three years from the date of grant, with the following targets:
Measure
Weighting
% of award vesting for
threshold performance
Threshold
Maximum
Relative TSR vs
FTSE 250 Index
80%
25
Median of the
comparator group
Upper quartile of the
comparator group
ESG measure¹
20%
25
60% of suppliers
by spend
63% of suppliers
by spend
1. ESG measure: based on supplier alignment with the Company’s SBTi-approved targets.
For performance between threshold and maximum, vesting will be determined on a straight-line basis.
These awards will vest on the third anniversary of the date of grant and will be subject to a further two-year holding period.
As previously noted, the Remuneration Committee reviewed the ESG targets for both LTIP grants following the demerger of THG
Ingenuity to assess whether they remained relevant in the go-forward business context. For the 2024 LTIP, while there is no
proposal to amend the numerical targets, the in-scope spend will be amended to relate only to suppliers of THG Beauty and THG
Nutrition. We are satisfied that the amended targets retain their original level of stretch while now relating directly to areas over
which the Executive Directors have influence.
Treatment of John Gallemore’s 2023 and 2024 LTIP awards
The Remuneration Committee determined that John Gallemore would be treated as a ‘good leaver’ and, as such, his in-flight LTIP
awards will vest on their normal vesting dates, subject to their original performance conditions. The Remuneration Committee
intends to exercise discretion to disapply time pro-rating on his LTIP awards at the time of vesting. In making this decision, the
Committee considered the instrumental role that John Gallemore has played in the success of THG since its founding in 2004, the
context around fair and consistent treatment between John Gallemore and other below-Board employees departing as a result
of the demerger of THG Ingenuity, and the delayed grant of both the 2023 and 2024 LTIP awards compared to the normal annual
cycle.
Payments to past Directors (audited)
No payments were made to past Directors during the 2024 financial year.
Loss of office payments (audited)
No loss of office payments were made during the 2024 financial year.
External appointments
Damian Sanders is a non-executive director of Victorian Plumbing Group plc. Neither Matthew Moulding nor John Gallemore held
any external non-executive roles during 2024.
116
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
Directors’ shareholdings (audited)
The tables below show the shareholdings of each Director as at 31 December 2024:
Ordinary
Shares
B Shares
D1 Shares
D2 Shares
Deferred 2
Shares
E Shares
F Shares
G Shares
H
Shares
Executive Directors
Matthew Moulding1
121,924,433
97,227,825 50,550,450
360
(equivalent to
66,772 Ordinary
Shares) 18,346,774
43,641,266 20,197,808
7,733,792
0
John Gallemore
682,9472
0
3,533,879
3,174
(equivalent to
588,702 Ordinary
Shares)
813,345
185,476 2,666,963
4,000,537
0
Damian Sanders
358,487
129,000
0
0
0
0
0
0
0
NEDs
Charles Allen3
2,548,311
393,689
0
0
0
0
0
0
0
Edward Koopman
0
0
0
0
0
0
0
0
0
Gillian Kent3
53,600
0
0
0
0
0
0
0
0
Dean Moore3
53,143
0
0
0
0
0
0
0
0
Sue Farr3
171,7434
0
0
0
0
0
0
0
0
Helen Jones3
134,084
0
0
0
0
0
0
0
0
Former NEDs
Iain McDonald5
1,658,309
1,033,110
0
0
14,524
0
0
0
0
1. 99,598,237 of the Ordinary Shares, 81,296,802 of the B Shares, 10,971,090 of the Deferred 2 Shares and all of the F Shares and G Shares owned by Matthew
Moulding are held by FIC ShareCo Limited, a corporate entity wholly owned by Matthew Moulding. Additionally, 5,739,451 of the Ordinary Shares and 4,095,428 of
the B Shares shown in the table above are held by Jodie Moulding, Matthew Moulding’s spouse.
2. 578,710 of these Ordinary Shares are held jointly with Joanne Gallemore, John Gallemore’s spouse.
3. Charles Allen, Gillian Kent, Dean Moore, Sue Farr and Helen Jones hold Ordinary Shares. In consideration of these individual shareholdings and NED independence,
the Board has applied its assessment criteria including, but not limited to, whether a NED has held a material business relationship with the Company in the last
three years. Taking into account assessments of materiality and the 3% notification threshold under the DTRs’ major shareholdings notification regime, the Board
acknowledges that the shareholdings of these NEDs sit significantly below the notification threshold and therefore do not impair their independence.
4. 26,500 of these Ordinary Shares are held by Anthony Mair, Sue Farr’s spouse.
5. Iain McDonald stepped down from the Board on 31 March 2024.
Executive Director
Unvested and subject to
performance conditions
Unvested and not subject
to performance conditions
Vested and
unexercised
Total interests as at
31 December 2024
Matthew Moulding1
0
0
0
0
John Gallemore2
3,476,579
0
0
3,476,579
Damian Sanders2
3,862,865
0
0
3,862,865
1. The entries for Matthew Moulding are zero as he is not eligible to participate in the LTIP, as set out in the Directors’ Remuneration Policy.
2. The entries for John Gallemore and Damian Sanders reflect their 2023 and 2024 LTIP awards, as set out elsewhere in this Directors’ Remuneration Report.
There have been no other changes to Directors’ holdings of Ordinary Shares between 31 December 2024 and the date of this
Directors’ Remuneration Report, with the exception of the reduction in Matthew Moulding’s holding announced on 31 March 2025
in the PDMR/PCA Shareholding & TR-1 Notification (the “Notification”).
As detailed in the Notification, 23,327,894 Ordinary Shares were transferred to the placing book to satisfy demand from new and
existing investors, the gross proceeds of which were all reinvested by Matthew Moulding by way of a convertible loan agreement.
As a result, Matthew Moulding holds 98,596,539 Ordinary Shares as at the date of this Directors’ Remuneration Report and,
on a fully diluted basis, his equity interest equates to 429,873,034 shares, being approximately 25% of the Company’s issued
share capital and comprising 98,596,539 Ordinary Shares, 122,190,088 unlisted ordinary shares (which figure, for the avoidance
of doubt, excludes his Deferred 2 Shares) and a conversion right for a further 209,086,407 Ordinary Shares pursuant to the
aforementioned convertible loan agreement (as detailed within the Notification).
Directors’ Remuneration Report continued
Directors’ share ownership guidelines (audited)
Matthew Moulding and John Gallemore, who resigned from the Board and as COO with effect from completion of the demerger of
THG Ingenuity on 2 January 2025, are required to hold Ordinary Shares equal to at least 350% of their base salary, while Damian
Sanders is expected to build up a holding in Ordinary Shares of at least 200% of salary over a five-year period from the date of his
appointment to the Board. NEDs are not subject to any shareholding requirements.
Executive Directors’ share ownership at 31 December 2024 was as follows:
Director
Shareholding requirement
(%age of salary)
Shareholding as at
31 December 2024
(%age of salary)
Shareholding
requirement met?
Matthew Moulding
350
22,396.6%1
Yes
John Gallemore
350
1,294.3%2
Yes
Damian Sanders
200
45.5%
No
1. Matthew Moulding’s aggregated shareholding includes all Shares (i.e. Ordinary Shares, B Shares, D1 Shares, D2 Shares, E Shares, F Shares, G Shares and
Deferred 2 Shares) held by Matthew Moulding, his spouse, Jodie Moulding, and FIC ShareCo Limited, a corporate entity wholly owned by Matthew Moulding.
2. John Gallemore’s aggregated shareholding includes all Shares (i.e. Ordinary Shares, D1 Shares, D2 Shares, E Shares, F Shares, G Shares and Deferred 2 Shares)
held by him and jointly with his spouse, Joanne Gallemore.
Current shareholdings are based on Shares owned outright and valued using the average Ordinary Share price over the three
months ended 31 December 2024 i.e. £0.467.
John Gallemore will comply with THG’s post-employment shareholding requirements, maintaining a shareholding of at least 350%
of salary for a period of two years post employment with the Company.
Performance graph and table
The following graph shows the TSR (i.e. total shareholder return) performance over the period from Admission to
31 December 2024 relative to the FTSE 250 Index. It illustrates the performance of a £100 investment in the Company in that
period compared with the value of £100 invested in the FTSE 250 Index over the same period.
The FTSE 250 Index continues to be considered a more appropriate comparator for this purpose as it is a broad equity index of
which the Company is a constituent.
THG
FTSE 250
200
150
100
0
50
Listing
31/12/2020
31/12/2021
31/12/2022
31/12/2023
31/12/2024
TSR performance (%)
118
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THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance
Directors’ Remuneration Report continued
Chief Executive Officer’s historical remuneration
The following table details the Chief Executive Officer’s remuneration for each of the last five financial years:
2020
2021
2022
2023
2024
Single figure (£’000)
870,139
453
33
29
32
Bonus outcome as a percentage of maximum
100
n/a1
n/a1
n/a1
n/a1
Long-term incentive outcome
as a percentage of maximum
100
n/a2
n/a2
n/a2
n/a2
1. Matthew Moulding waived his entitlement to participate in the annual bonus plan for each of the 2021 to 2024 financial years.
2. No LTIP was eligible to vest in respect of each of the 2021 to 2024 financial years and Matthew Moulding does not participate in any ongoing LTIP.
Percentage change in Directors’ remuneration
The Executive Directors are the only employees of the Company and therefore the UK workforce has been selected as the
appropriate comparator group to provide a meaningful comparison since this is the geographical location in which all of the
Executive Directors, and the majority of NEDs, are based.
Accordingly, the following table shows the percentage change in the Directors’ salaries, benefits (excluding pension) and annual
bonuses between the 2020 and 2021, 2021 and 2022, 2022 and 2023, and 2023 and 2024 financial years, compared with
the percentage change in the average of each of these components of pay for all UK employees for each of these periods.
The comparison uses a per capita figure.
2023 to 2024
2022 to 2023
2021 to 2022
2020 to 2021
Salary/
fees Benefits
Bonus
Salary/
fees
Benefits
Bonus
Salary/
fees
Benefits
Bonus
Salary/
fees
Benefits
Bonus
Executive Directors
Matthew Moulding1
2.3%
45.6%
n/a
9.5% -46.6%
n/a
5.5%
97.3%1
n/a
-95.8%
17.0%
-100%
John Gallemore2
0.0%
-19.5%
n/a
91.5%
-5.2%
n/a
1,100.7%2
2.6%
n/a
-91.6%
63.0%
-100%
Damian Sanders3
6.5%
1.5%
n/a
236.3%3
n/a³
n/a³
18.8%
0%
n/a
780%
0%
n/a
NEDs
Charles Allen
6.8%
0%
n/a5
21.2%4
0%
n/a5
n/a4
n/a4
n/a4,5
n/a4
n/a4
n/a4,5
Edward Koopman
6.2%
0%
n/a5
-4.1%
0%
n/a5
2.1%
0%
n/a5
250%
0%
n/a5
Iain McDonald7
-67.3%
0%
n/a5
-9.1%
0%
n/a5
-2.8%
0%
n/a5
325%
0%
n/a5
Gillian Kent
5.7%
0%
n/a5
235.8%4
0%
n/a5
n/a4
n/a4
n/a4,5
n/a4
n/a4
n/a4,5
Dean Moore
-2.8%
0%
n/a5
247.9%4
0%
n/a5
n/a4
n/a4
n/a4,5
n/a4
n/a4
n/a4,5
Sue Farr
71.2%
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
Helen Jones
114.5%
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
n/a6
n/a6
n/a5,6
Wider workforce
Average employee8
8.4%
24.5% -50.6%
4.7%
22.5%
12.9%
10.5% -20.8%
85.4%
10.1%
217.3% -37.5%
1. From Admission and subject to minimum statutory limits, Matthew Moulding has elected to waive his salary and the percentage changes stated above reflect
changes in these statutory limits rather than changes to salary levels. The reduction in the 2021 to 2022 benefits figure relates to Matthew Moulding’s private
security cover which was funded by the Company in 2021 and personally funded from 1 January 2022 onwards. Matthew Moulding waived his entitlement to
participate in the 2024 annual bonus plan, as he did in respect of financial years 2021, 2022 and 2023.
2. During 2021 John Gallemore elected to waive his salary subject to minimum statutory limits. In 2022 John Gallemore elected to waive his salary for the period
1 January 2022 to 30 June 2022, and was paid his standard base salary from 1 July 2022 until he resigned from the Board and as COO with effect from
completion of the demerger of THG Ingenuity on 2 January 2025. The increase in the 2021 to 2022 salary/fees figure reflects John Gallemore electing not to
waive his salary for the period 1 July 2022 to 31 December 2022. John Gallemore waived his entitlement to participate in the 2024 annual bonus plan, as he
did in respect of financial years 2021, 2022 and 2023.
3. The percentage increase in the 2022 to 2023 salary/fees figure reflects a change in Damian Sanders’ role during the 2023 financial year. He held the position
of NED during the 2020, 2021 and 2022 financial years and from 1 January 2023 to 23 January 2023, and was appointed CFO on 24 January 2023 (and has
held this position from this date to the date of this Report). It is not possible to show a percentage change for benefits and bonus as Damian Sanders was not
eligible to receive these remuneration elements prior to his appointment as CFO. Damian Sanders waived his entitlement to participate in the 2024 annual
bonus plan, as he did in respect of the 2023 financial year.
4. Charles Allen, Gillian Kent and Dean Moore were not Directors during the 2020 and 2021 financial years. Charles Allen was appointed to the Board on
22 March 2022 and Gillian Kent and Dean Moore were both appointed on 15 September 2022. Therefore, the percentage change figure disclosed for 2022
to 2023 for: (i) Charles Allen reflects his full year’s service in 2023 in comparison to his part year’s service in 2022 (i.e. the figure reflects 12 months’ service in
2023 versus approximately 9 months’ service in 2022); and (ii) each of Gillian Kent and Dean Moore reflects their full year’s service in 2023 in comparison to
their part year’s service in 2022 (i.e. the figures reflect 12 months’ service in 2023 versus approximately 3.5 months’ service in 2022).
5. NEDs are not entitled to participate in the annual bonus plan.
6. Sue Farr and Helen Jones were not Directors during the 2020, 2021 and 2022 financial years, being appointed to the Board on 24 April 2023 and
21 June 2023 respectively.
7. Iain McDonald stepped down from the Board on 31 March 2024.
8. THG PLC is the parent company of the Group and, with the exception of the Executive Directors, does not have any employees. The figures detailed here are
therefore representative of the Group’s UK workforce.
Chief Executive Officer’s pay ratio
The following table presents the pay ratio between the Chief Executive Officer’s single total figure of remuneration and that
of the Group’s UK workforce. The ratios compare the Chief Executive Officer’s single total figure of remuneration with the total
remuneration of full-time equivalent UK employees at the 25th, median and 75th percentiles.
Year
UK employees (full-time equivalents)
Method
CEO remuneration
(£’000)
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2024
Option A
32
1.2:1
1.1:1
0.7:1
2023
Option A
29
1.2:1
1.0:1
0.7:1
2022
Option A
33
1.2:1
1.1:1
0.8:1
2021
Option A
453
21:1
18:1
14:1
The total pay and benefits and salary figures used for the pay ratio calculations are set out in the following table:
Year
UK employees (full-time equivalents)
25th percentile
Median
75th percentile
2024
Salary
£26,055
£30,127
£43,083
Total pay and benefits
£26,550
£30,800
£44,187
The 25th percentile, median and 75th percentile figures used to determine the above ratios were selected by reference to the
hourly pay figures for the Group’s UK workforce on 31 December 2024. Option A, as set out under the Regulations, was used to
calculate remuneration for the 2024 financial year as the Company believes this is the most robust methodology for calculating
these figures (and reflects the approach adopted for the preceding three financial years). The full-time equivalent annualised
remuneration (comprising salary, benefits, pension, annual bonus and long-term incentives) was then calculated for those
employees for the 2024 financial year.
The ratio continues to remain around 1:1 on a median basis, primarily as a result of Matthew Moulding waiving as much of his
base salary as is legally permissible in return for the Group making a charitable donation of similar value, as well as waiving his
entitlement to participate in the annual bonus plan and not participating in any long-term incentive scheme.
Executive Director pay is, typically, more at risk than wider employee pay due to the use of variable pay which is not guaranteed
and hence, depending on incentive plan outcomes, can lead to a total pay ratio that varies significantly from year to year.
Furthermore, the Remuneration Committee believes that THG’s reward policies are not only aligned with the Group’s shared values
and culture but also incentivise and drive the desired behaviours and ensure all employees are rewarded fairly and competitively
for their contribution to the Group’s success. For these reasons, the Remuneration Committee is satisfied that the median pay
ratio is consistent with the Group’s pay, reward and progression policies.
THG PLC is the parent company of the Group and, with the exception of the Executive Directors, does not have any employees.
The pay ratio figures have therefore been calculated with reference to the Group’s UK workforce which the Company considers
is the appropriate comparator, being reflective of the wider policies in operation on employee pay, reward and progression across
the vast majority of the Group’s overall workforce.
Relative importance of spend on pay
The following table details Shareholder distributions and THG expenditure on total employee pay for the 2024 financial year
versus the prior financial year, together with the percentage change year on year:
2024
(£m)
2023
(£m)
%age
change
Profit distributed by way of dividend
0
0
n/a
Total spend on remuneration
318.4
300.2
6.1
Shareholder dilution
Any share incentive plans (including The THG PLC 2022 Executive Long-Term Incentive Plan) post-IPO will be operated in line
with both the recently updated Investment Association’s Principles of Remuneration (which require that commitments under all
share schemes satisfied by newly issued ordinary shares must not exceed 10% of the issued ordinary share capital in any rolling
ten‑year period) and the approved Directors’ Remuneration Policy.
120
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THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
2024 AGM voting outcomes
The following table sets out the Shareholder voting results in respect of the 2023 Directors’ Remuneration Report and the
Directors’ Remuneration Policy, both of which were tabled for Shareholder approval at the 2024 AGM.
Resolution
Votes
for
%age of
votes cast
Votes
against
%age of
votes cast
Total
votes cast
%age of
ISC voted
Votes
withheld
To approve the 2023 Directors’
Remuneration Report
(excluding the Remuneration Policy)
772,314,044
95.12
39,651,037
4.88
811,965,081
61.01
12,240,080
To approve the Directors’
Remuneration Policy
770,924,395
94.97
40,859,699
5.03
811,784,094
61.00
12,421,067
Implementation of Remuneration Policy for the 2025 financial year
The Remuneration Committee proposes to implement the Remuneration Policy for the 2025 financial year as follows:
Base salary
Executive Directors have voluntarily waived any salary increase in respect of the 2025 financial year. Therefore, base salaries will
remain as follows:
– Matthew Moulding: £750,000; and
– Damian Sanders: £500,000.
Pension
There is no change in the contribution percentage for Executive Directors for the 2025 financial year and it remains at 3% of
pensionable salary. Pensionable salary is determined in line with the approach taken for the Group’s wider workforce, which is
currently in line with auto-enrolment levels.
Executive Directors participate in a Qualifying Earnings scheme where employer contributions are capped at a monthly threshold,
such that the effective contribution rate is less than 3% of salary in practice. None of the Executive Directors participate in a
Group defined benefit pension scheme.
Benefits
There are no proposed changes to the benefits provisions for Executive Directors for the 2025 financial year.
Annual bonus
In line with the Remuneration Policy, the maximum opportunity for the 2025 financial year will be:
– Matthew Moulding: 100% of base salary; and
– Damian Sanders: 100% of base salary.
The measures and weightings for Matthew Moulding and Damian Sanders for the 2025 financial year will be:
– Free Cash Flow (35%);
– Adjusted EBITDA (continuing)1 (35%); and
– Group Sales (continuing)1 (30%).
The specific targets are considered commercially sensitive and will be disclosed in next year’s Annual Report on Remuneration.
LTIP award
As previously noted, the Remuneration Committee intends to grant annual LTIP awards on a normal cycle from 2024 onwards,
typically following the Company’s annual general meeting. It is therefore expected that a 2025 LTIP award of 250% of base salary
will be granted to Damian Sanders following the 2025 AGM.
This award will vest on the third anniversary of the date of grant and be subject to: (i) a further two-year post-vesting holding
period; and (ii) stretching financial and strategic performance conditions, which will be disclosed at the time of grant via a RNS
announcement.
Directors’ Remuneration Report continued
NED fees
Following a review of the fees paid to NEDs, an increase of 4% will be applied to core/base NED and SID fees in line with wider
workforce salary increases. This 4% increase does not apply to the additional Board Committee chairing/membership fees.
Separately, as a consequence of the Related Party Committee’s increased responsibility following the demerger of THG Ingenuity,
the additional fee for chairing this Committee has been increased with effect from 1 January 2025 to align with the additional fee
paid for chairing each of the Audit, Risk, Remuneration and Sustainability Committees. Accordingly, annual NED fees will be as
follows for the 2025 financial year:
NED fee type
Fee
Fee for Independent Chair
£432,640
Fee for SID
£93,600
Base fee for independent NEDs
£75,710
Base fee for non-independent NEDs
£37,850
Additional fee for chairing each of Audit, Risk, Remuneration, Sustainability and Related Party Committees
£12,000
Additional fee for chairing Nomination Committee
£8,000
Additional fee for membership of each of Audit, Risk, Related Party, Nomination,
Remuneration and Sustainability Committees
£5,000
Advisers to the Remuneration Committee
PricewaterhouseCoopers LLP (“PwC”) remain engaged as the Remuneration Committee’s independent remuneration advisers,
having been appointed prior to Admission by the then Remuneration Committee Chair. PwC is a member of the Remuneration
Consultants Group, the professional body for remuneration consultants, and adheres to its Code of Conduct. The Remuneration
Committee is satisfied that the advice provided by PwC during 2024 was objective and independent and, while separate teams
within PwC also advise the Company on matters of tax, corporate governance and operations, the Remuneration Committee is
further satisfied that these activities do not compromise the independence or objectivity of the advice it receives from PwC as
Remuneration Committee advisers.
During 2024 PwC provided general support to the Remuneration Committee and guidance on developments in remuneration
governance and best practice, including associated implications for THG. PwC further advised on:
– the 2023 Directors’ Remuneration Report;
– NED and Executive Director benchmarking;
– appropriate performance metrics for 2024 and 2025 incentive arrangements;
– treatment of the in-flight LTIP awards as a consequence of the demerger of THG Ingenuity; and
– 2024 AGM season remuneration trends.
Fees charged by PwC for advice provided to the Remuneration Committee for the 2024 financial year amounted to £72,350
(excluding VAT).
On behalf of the Remuneration Committee
Helen Jones
Chair of the Remuneration Committee
28 April 2025
1. Adjusted EBITDA (continuing) and Sales (continuing) not including discontinued categories.
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THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance
Directors’ Report
Directors’ Report disclosures
The Directors present their report, together with the audited consolidated financial statements of the Company, for the financial
year ended 31 December 2024. In accordance with section 414C(11) of the Companies Act, the Company has chosen to provide
disclosures and information in relation to certain matters elsewhere in this Annual Report. These matters, together with those
required under The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013,
are cross-referenced in the table which follows and, together, form part of this Directors’ Report.
The Corporate Governance Report, contained on pages 84 to 93, is incorporated by reference into this Directors’ Report.
Information
Section in the Annual Report
Page(s)
Risk management (including principal and emerging risks)
Strategic Report
72 to 82
Going Concern Statement
Strategic Report
81
Post balance sheet events
Directors’ Report
129
Future developments of the Company
Strategic Report
Throughout the Strategic
Report (pages 2 to 82)
GHG emissions
Strategic Report
48 to 53, 62 to 71
Directors’ biographies
Corporate Governance Report
86 and 87
Corporate governance arrangements
Corporate Governance Report
84 to 93
Directors’ conflicts of interest
Corporate Governance Report
92
Related Party Transactions
Financial Statements
180 and 181
Statement of engagement with employees
Strategic Report
36 to 42
Statement of engagement with suppliers, customers and others
in a business relationship with the Company
Strategic Report
36 to 42
Articles of Association
In accordance with the Companies
Act, the Articles of Association may
only be amended by special resolution
at a general meeting of Shareholders.
The Articles of Association are
available on the Company’s website
at: https://www.thg.com/investor-
relations/key-governance-documents.
Annual general meeting
The AGM will be held at THG Studios, 7-9
Sunbank Lane, Altrincham WA15 0AF on
25 June 2025 at 1.00 p.m. The Notice of
Meeting, together with explanatory notes,
will be sent to Shareholders in May 2025.
Directors
Biographies of those Directors who
were in office at 31 December 2024, and
remain in office as at the date of this
Directors’ Report, are contained in the
Corporate Governance Report on pages
86 and 87. All of these Directors held
office throughout the whole of 2024,
with the exception of Milyae Park who
was appointed on 28 January 2025.
John Gallemore was a director of the
Company throughout the whole of
2024 but resigned from the Board and
as COO with effect from completion
of the demerger of THG Ingenuity on
2 January 2025.
All Directors in office as at the date
of this Directors’ Report will offer
themselves for election or re-election
(as appropriate) by Shareholders at the
forthcoming AGM.
Directors’ interests
Details of Directors’ beneficial and
non‑beneficial interests in the
Shares are detailed in the Directors’
Remuneration Report on page 118.
On 7 March 2024 and 1 August 2024
nil-cost options were granted to each
of Damian Sanders, the CFO, and
John Gallemore, the former COO,
under the THG PLC 2022 Long-Term
Incentive Plan in respect of the 2023
and 2024 financial years. Further
details of these awards, including the
applicable performance targets and
performance periods, can be found
within the ‘Scheme interests awarded
(audited)’ section of the Annual Report
on Remuneration, within the Directors’
Remuneration Report.
Qualifying third party
indemnification and insurance
Pursuant to the Articles of Association
and their service contracts/letters of
appointment (as appropriate), Directors
benefited from qualifying third party
indemnity provisions for the purposes
of section 236 of the Companies Act
throughout 2024 and up to the date
of this Directors’ Report. The Company
also maintained Directors’ and Officers’
Liability Insurance throughout 2024.
Appointment and replacement
of Directors
The rules for appointing and replacing
Directors are set out in the Articles of
Association. Directors can be appointed
by the Board or by ordinary resolution of
the Company. A Director can be removed
from office by the Company passing an
ordinary resolution or by notice being
given by all other Directors.
Powers of the Directors
The Directors may exercise all the powers
of the Company subject to the provisions
of the relevant legislation, the Articles of
Association and any directions given by
the Company in a general meeting.
Share capital
Subject to the Companies Act and the
Articles of Association, but without
prejudice to the rights attached to any
existing Share, any Share may be issued
with, or have attached to it, such rights
or restrictions as the Company may
decide by ordinary resolution or, if no
such resolution is in effect, as the Board
may decide so far as the resolution does
not make specific provision. No such
resolution is currently in effect.
Purchase of own Ordinary Shares
At the 2024 AGM the Company was
granted authority by its Shareholders
to purchase up to 10% of its ordinary
issued share capital, in accordance with
the Articles of Association. No Shares
were bought back under this authority
during the 2024 financial year or in the
period from 1 January 2025 to the date
of this Directors’ Report. This buyback
authority will expire at the conclusion of
the forthcoming AGM, when the Directors
intend to propose the authority be
renewed.
Allotment of Shares
Under the Companies Act, the Directors
may only allot Shares if authorised to do
so by Shareholders in a general meeting.
The Directors were granted authority by
Shareholders to allot securities in the
Company up to an aggregate maximum
nominal amount of £4,943,753.96
and to allot securities, without the
application of pre-emption rights, up to
a nominal amount of £741,563.09 and
a further £741,563.09 in connection
with an acquisition or specified capital
investment of a kind contemplated
by the Pre-Emption Group’s updated
Statement of Principles on Disapplying
Pre-Emption Rights. In connection with
both authorities, the Directors were also
granted authority to allot up to a further
nominal amount of £148,312.61 for the
purposes of a follow-on offer (as such
term is described in the Pre-Emption
Group’s updated Statement of Principles
on Disapplying Pre-Emption Rights).
These authorities apply until the
conclusion of the forthcoming AGM
when the Company will seek Shareholder
approval to renew them, with detailed
explanatory notes included within the
Notice of Meeting.
Share structure
The Company is the holding company of the Group and has in issue the classes of share set out in the table which follows.
On 6 January 2025 the Company transferred the listing category of its Ordinary Shares from the Transition category to the ESCC
category of the Official List.
As at 31 December 2024 the Shares in issue were as follows:
Share class
Number of Shares
Percentage of
Company’s fully
diluted issued
share capital
Allotted, called up and fully paid Ordinary Shares
1,322,058,529
77.94
Allotted, issued and fully paid B Shares1
204,081,632
12.03
Allotted, issued and partly paid D1 Shares
56,082,651
3.30
Allotted, called up and fully paid D2 Shares
17,066
n/a
Allotted, issued and partly paid E Shares
48,605,750
2.87
Allotted, issued and partly paid F Shares
26,715,453
1.57
Allotted, issued and partly paid G Shares
16,885,866
1.00
Allotted, issued and fully paid Deferred 1 Shares
323,059
0.02
Allotted, issued and partly paid Deferred 2 Shares
21,563,860
1.27
Total
1,696,333,866
100
1. Following the receipt from certain Shareholders of valid elections to participate in the demerger of THG Ingenuity from the Company, 204,081,632 Ordinary
Shares were redesignated as B Shares on 30 December 2024. These B Shares were redesignated as Deferred 1 Shares upon completion of the demerger
on 2 January 2025. Further information on the demerger and the B Shares is included within the circular that was made available to Shareholders on
28 November 2024.
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
Share capital continued
Share structure continued
As at 31 December 2024 Matthew
Moulding was also interested
in 121,924,433 Ordinary Shares,
representing 9.22% of the total issued
Ordinary Shares; 97,227,825 B Shares,
representing 47.64% of the total issued
B Shares; 50,550,450 D1 Shares,
representing 90.14% of the total issued
D1 Shares; 360 D2 Shares, representing
2.11% of the total issued D2 Shares;
43,641,266 E Shares, representing
89.79% of the total issued E Shares;
20,197,808 F Shares, representing 75.60%
of the total issued F Shares; 7,733,792 G
Shares, representing 45.80% of the total
issued G Shares; and 18,346,774 Deferred
2 Shares, representing 85.08% of the
total issued Deferred 2 Shares.
Rights and obligations attaching
to Shares
The rights attaching to the Shares,
as detailed within the Articles of
Association, are as follows:
(a) Ordinary Shares
The Ordinary Shares rank pari passu in
all respects and carry the right to receive
all dividends and distributions declared,
made or paid on, or in respect of, the
Ordinary Shares.
Subject to disenfranchisement in the
event of non-payment of any call or other
amount due and payable in respect of
any Share, or non-compliance with any
statutory notice requiring disclosure of
the beneficial ownership of any Share,
on a show of hands every Shareholder
present in person or by proxy has one
vote and on a poll every Shareholder
present in person or by proxy has one
vote for every Ordinary Share that
they hold.
Electronic and paper proxy appointments
and voting instructions must be received
no later than 48 hours (excluding any
part of a day that is not a working day)
before a general meeting.
Except as set out above and as permitted
under applicable statutes, there are no
limitations on the voting rights of holders
of a given percentage, number of votes or
deadlines for exercising voting rights.
(b) D1 Shares, D2 Shares and E Shares
The D1 Shares, D2 Shares and E Shares
are non-voting ordinary shares and
do not carry the right to participate in
dividends of the Company.
The holders of D1 Shares, D2 Shares and
E Shares may convert their D1 Shares, D2
Shares and E Shares into Ordinary Shares
(on the basis of, as applicable, one
Ordinary Share per D1 Share or E Share
or 185 Ordinary Shares per D2 Share).
(c) F Shares, G Shares and H Shares
The F Shares, G Shares and H Shares are
non-voting ordinary shares and do not
carry the right to participate in dividends
of the Company.
The holders of F Shares, G Shares and
H Shares may exercise put options to
convert their F Shares, G Shares and
H Shares into Ordinary Shares (on the
basis of, as applicable, one Ordinary
Share per F Share, G Share or H Share).
The put options may be exercised for a
period of ten years from the end of the
performance period (which ended on
31 December 2022).
(d) Deferred 1 Shares and Deferred
2 Shares
The Deferred 1 Shares and Deferred 2
Shares are non-voting ordinary shares
and do not carry the right to participate in
dividends of the Company.
The Deferred 1 Shares and Deferred
2 Shares may be purchased by the
Company, provided it is lawful for the
Company to purchase them, for an
aggregate sum of £1.00.
Restrictions on transfer or holdings
of securities in the Company
With the exception of the following, there
are no restrictions on the transfer of, or
limitations on holding, securities in the
Company:
– The Company may, pursuant to
the Articles of Association and the
Companies Act, send out statutory
notices to those it knows, or has
reasonable cause to believe, have an
interest in its Shares, asking for details
of those who have an interest in a
particular holding of Shares and the
extent of their interest. When a person
receives a statutory notice and fails
to provide any information required
by the notice in the time specified
within it, the Company can apply to a
court for an order directing, amongst
other matters, that any transfer of the
Shares which are the subject of the
statutory notice is void.
– The Directors may, without giving any
reason, refuse to register the transfer
of any certificated Ordinary Shares
which are not fully paid.
– Transfers of uncertificated Ordinary
Shares must be carried out using
CREST, the central securities
depository for markets in the UK and
for Irish stocks, and the operator of
the relevant system or the Directors
can refuse to register a transfer of
an uncertificated Ordinary Share,
in accordance with the regulations
governing the operation of CREST.
Dividends
Subject to the Companies Act and the
Articles of Association, the Company may,
by ordinary resolution, declare dividends
and the Directors may decide to pay
interim dividends. A dividend must not be
declared unless the Directors have made
a recommendation as to its amount.
Such a dividend must not exceed the
amount recommended by the Directors
and no dividend may be declared or paid
unless it is in accordance with members’
respective rights.
No dividends were declared, nor will be
distributed, for the financial year ended
31 December 2024 (2023: £nil). However,
following Shareholder approval being
obtained on 27 December 2024 to the
business set out in the circular which
was made available to Shareholders
on 28 November 2024 relating to the
demerger of THG Ingenuity, a dividend
liability has been recognised within the
statement of financial position at 31
December 2024. See note 12.2 within
the notes to the consolidated financial
statements for further information.
Return of capital
A liquidator may, on obtaining any
sanction required by law, divide amongst
the members in kind the whole, or any
part, of the assets of the Company and
may, for that purpose, value any assets
and determine how the division is carried
out as between the members or different
classes of members.
Shares held on trust
The Company has established an
employee benefit trust (“EBT”) to hold
Ordinary Shares to satisfy awards made
under the Employee Incentive Plan. As at
the date of this Directors’ Report, the EBT
holds 82,667,016 Ordinary Shares.
Directors’ Report continued
Substantial shareholdings
Disclosable interests of 3% or more in Ordinary Shares as at 31 December 2024 and 31 March 2025 were as follows:
Shareholder
Percentage
of Ordinary
Shares as at
31 December 2024
Percentage
of Ordinary
Shares as at
31 March 2025
Frasers Group plc
—
10.86
Sofina S.A.
9.64
9.17
Matthew Moulding
9.22
7.091, 2
Balderton Capital (UK) LLP
7.33
6.97
Qatar Investment Authority
7.20
6.84
THG PLC EBT
4.62
3.68
1. As detailed in the ‘Post balance sheet events – Equity placing and equity raise’ section which follows, Matthew Moulding transferred 23,327,894 Ordinary
Shares to the placing book to satisfy demand from investors in the March 2025 fundraise, the gross proceeds of which were reinvested by Matthew Moulding
by way of a convertible loan agreement.
2. On a fully diluted basis, Matthew Moulding’s equity interest equates to approximately 25% of the Company’s issued share capital (further details on which can
be found within the ‘Directors’ shareholdings (audited)’ section of the Annual Report on Remuneration).
All notifications made to the Company under the DTRs are released to the market via a Regulatory Information Service and made
available on the Company’s website at: https://www.thg.com/investor-relations/regulatory-news/.
Change of control
Other than the terms of the agreement
between Matthew Moulding and
the Company, as detailed under the
‘Significant contractual arrangements’
section which follows, there are no
agreements between THG and its
Directors or employees providing
for compensation for loss of office
or employment (whether through
resignation, purported redundancy or
otherwise) by reason of a takeover bid.
Details concerning the impact on annual
bonus in the event of a change of control
are set out in the Remuneration Policy.
Generally, any annual bonus awards and
unvested LTIP awards would be pro‑rated
for time and performance in the event
of a change of control whereas any
deferred elements of bonus would not
be. While the Remuneration Committee
has the discretion not to pro-rate for
time, its normal policy is to do so.
The Remuneration Committee’s discretion
not to pro-rate would only be used if
there was an acknowledged business
case which would be fully explained to
Shareholders.
The Company has entered into various
agreements with third parties, as well
as contracts with third-party service
providers, which provide such parties
with a right to terminate their agreement
in the event of a change of control.
Significant contractual
arrangements
The Company is party to a relationship
agreement with Matthew Moulding
which regulates the ongoing relationship
between the two parties (the
“Relationship Agreement”). The principal
purpose of the Relationship Agreement
is to ensure that the Company is capable
of carrying on its business independently
of Matthew Moulding and that all
transactions and arrangements between
the Company and Matthew Moulding are
conducted on normal commercial terms.
The provisions of the Relationship
Agreement, imposing certain obligations
on Matthew Moulding, will remain in full
force and effect, in respect of Matthew
Moulding, for so long as Matthew
Moulding beneficially owns, together
with any of his associates, at least (a)
5% of the fully diluted share capital of
the Company or (b) 10% of the Ordinary
Shares.
THG Intermediate Opco Limited and
THG Operations Holdings Limited are
parties to: (i) a senior facilities agreement
originally dated 10 December 2019 in
relation to a syndicated €445m Term
Loan B Facility and £150m RCF; and (ii)
a £156m facilities agreement originally
dated 21 October 2022 in relation to a
UKEF-backed Term Facility and term
loan facility, each as amended and/or
amended and restated from time to time,
both of which are subject to mandatory
prepayment provisions following the
occurrence of a change of control or
the sale of all, or substantially all, of
the assets of THG Operations Holdings
Limited and its restricted subsidiaries.
Other than as disclosed above, there are
no significant agreements to which the
Company is a party that take effect, alter
or terminate upon a change of control
following a takeover bid.
The Company does not have any
agreement with any Director or employee
that would provide compensation for
loss of office or employment resulting
from a change of control on a takeover,
except that the terms of the Company’s
share schemes and plans may provide
for the vesting of employee options
and/or awards in the circumstances
of a takeover.
Donations
During the 2024 financial year the
Group made several charitable donations
totalling £0.2m (2023: £0.3m). An
additional amount was also accrued
in the year as a result of Matthew
Moulding waiving as much as was
legally permissible of his base salary
during 2024 in return for the Group
making a charitable donation to The
Moulding Foundation of a similar value
(as disclosed within the Directors’
Remuneration Report). THG did not make
any political donations during 2024
(2023: £nil).
Overseas branches
While the Group does not operate
any overseas branches, subsidiaries
have been established in the following
countries: Australia, China, France,
Germany, Guernsey, India, Japan, Jersey,
the Netherlands, Poland, Portugal,
Singapore, Spain, Sweden, Ukraine,
the United Arab Emirates and the United
States of America.
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Strategic Report
Governance
Financial Statements
Additional Information
Governance
Overseas branches continued
As a Group we continue to monitor
the situation in Ukraine and Russia and
remain committed to safeguarding our
employees in the affected regions.
Arrangements are in place to facilitate
the relocation of employees in the event
required; welfare calls are extended to
all members of our workforce with ties
to the affected regions; and additional
targeted monitoring groups have been
established to actively review intelligence
on an ongoing basis to ensure the Group
continues to adapt as required.
From an operational perspective, all THG
own-brand deliveries remain suspended
across Russia and Russian-occupied
Ukraine territories and the Group has
continued to work with its courier
partners in this regard. The necessary
measures have also been implemented
within the Group to ensure continued
compliance with all applicable sanctions
and related notices and guidance.
Research and development
THG and its third-party commerce clients
were all powered by THG Ingenuity, the
Group’s former proprietary technology
platform, during 2024. In addition to
providing end-to-end ecommerce
functionality, THG Ingenuity provided
the Group with important competitive
advantages (and continues to do so).
Specifically, its commercial teams
review real-time transactional and
customer insight data which, in turn,
informs trading decisions that are then
executed within short time frames. In
order to remain competitive and promote
innovation, investment into THG Ingenuity
was a key Group priority prior to the
demerger from a people and capex
perspective. THG Ingenuity continues to
provide services to the Group following
the demerger.
Directors’ Statement
of Responsibility
The Directors are responsible for
preparing this Annual Report, including
the financial statements, in accordance
with applicable UK law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Accordingly, the Directors
have elected to prepare the Group
financial statements in accordance
with UK-adopted IFRS and the parent
company financial statements in
accordance with UK Generally Accepted
Accounting Practice (UK Accounting
Standards and applicable law),
including Financial Reporting Standard
101 Reduced Disclosure Framework
(“FRS 101”).
Under company law the Directors must
not approve the financial statements
unless they are satisfied that they
provide a true and fair view of the state
of affairs of the Group and the Company
and of the profit or loss of the Group and
the Company for the period in question.
In preparing these financial statements,
the Directors are required to:
– select suitable accounting policies
in accordance with IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors and then apply
them consistently;
– make judgements and accounting
estimates that are reasonable and
prudent;
– present information, including
accounting policies, in a manner that
provides relevant, reliable, comparable
and understandable information;
– provide additional disclosures
when compliance with the specific
requirements in IFRS (and, in respect
of the parent company financial
statements, FRS 101) is insufficient to
enable users to understand the impact
of particular transactions and other
events and conditions on the financial
position and financial performance of
the Group and/or Company;
– in respect of the Group financial
statements, state whether UK-adopted
IFRS have been followed, subject to
any material departures disclosed and
explained in the financial statements;
– in respect of the parent company
financial statements, state whether
applicable UK Accounting Standards,
including FRS 101, have been followed,
subject to any material departures
disclosed and explained in the
financial statements; and
– prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Company and/or the Group will
continue in business.
The Directors are responsible for keeping
adequate accounting records which
are sufficient to show and explain
the transactions of the Company and
the Group and which disclose, with
reasonable accuracy and at any time,
the financial position of the Company
and the Group, and enable the Directors
to ensure that the Company and the
Group financial statements comply with
the Companies Act.
The Directors are also responsible for
safeguarding the assets of the Group
and parent company and thus for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
In accordance with DTR 4.1.12R, each
Director whose name and position
appears on pages 86 and 87 of the
Corporate Governance Report confirms
that, to the best of their knowledge:
– the consolidated financial statements,
prepared in accordance with
UK‑adopted IFRS, give a true and fair
view of the assets, liabilities, financial
position and profit of the parent
company and undertakings included in
the consolidation taken as a whole;
– the Annual Report, including the
Strategic Report, includes a fair review
of the development and performance
of the business and the position of the
Company and undertakings included
in the consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face; and
– they consider the Annual Report,
taken as a whole, to be fair, balanced
and understandable, providing
the information necessary for
Shareholders to assess the Company’s
position, performance, business model
and strategy.
Directors’ Report continued
Post balance sheet events
Discontinued operations
On 17 September 2024 the Group
announced that it was progressing
options for the demerger of THG
Ingenuity from the Group into an
independent private company. To effect
the demerger Shareholder approval
was sought to the business set out in
the circular which was made available
to Shareholders on 28 November
2024, with Shareholder approval being
obtained on 27 December 2024. The
Company therefore believed that it was
highly probable that the transaction
would complete within 12 months of
the date of the announcement and
thus THG Ingenuity was classified as a
disposal group held for distribution and
discontinued operations from that date.
The demerger successfully completed on
2 January 2025.
As required by IFRIC 17, a dividend liability
has been recognised at the balance
sheet date for the accounting fair value
of THG Ingenuity. The delta between the
net assets and the accounting fair value
will be recognised within adjusting items
within the FY25 financial statements
(at the date of demerger). For further
information please see note 12.2 to the
financial statements.
Equity placing and equity raise
On 27 March 2025 the Company
announced that, following an
oversubscribed equity fundraise, it
would receive gross proceeds of £90m,
comprising £22m raised from the equity
placing and an equity contribution of
£68m from Matthew Moulding structured
by way of a convertible loan.
As subsequently announced on 31 March
2025, Matthew Moulding transferred
23,327,894 voting Ordinary Shares to the
placing book to satisfy demand from new
and existing investors in the fundraise.
Further details on the change in Matthew
Moulding’s holding in Ordinary Shares
between 31 December 2024 and the
date of this Directors’ Report can be
found in the ‘Directors’ shareholdings
(audited)’ section of the Annual Report on
Remuneration.
Post year end, 68,527,697 new Ordinary
Shares were issued and a convertible
loan of £68m has been recognised.
Refinancing
On 4 April 2025 the Company
announced the completion of its debt
refinancing through to 2029. As part of
a plan to delever, an ‘amend and extend’
refinancing was agreed that reduced the
Term Loan B from €600m to €445m
with maturity extended by three years
to December 2029. The Term Loan A
was partially repaid with a final stub of
£35m maturing in October 2025. The
undrawn RCF totals £150m and has also
been extended to 2029. The reduction
in facilities was partially funded by the
equity placing and equity raise referred
to above.
The demerger of THG Ingenuity will
materially reduce the cash outflows of
the Group with substantial reductions
in lease commitments and capex
requirements which, in turn, mean that
the Group requires smaller banking
facilities. There are no key covenants
attached to the Term Loan B or Term
Loan A facilities which are drawn down.
Covenants attached to the RCF are linked
to net debt leverage and only become
effective when the facility is drawn above
a certain level, which is not anticipated to
occur on test dates.
Audit and External Auditor
Each Director confirms that, at the date
of approval of this Directors’ Report:
– to the best of their knowledge, there is
no relevant audit information that has
not been brought to the attention of
the External Auditor; and
– they have taken all steps required of
them to make themselves aware of
any relevant audit information and to
establish that the External Auditor was
aware of that information.
This confirmation is given, and should
be interpreted, in accordance with
the provisions of section 418 of the
Companies Act.
EY has indicated its willingness to
continue in office as External Auditor and,
upon the recommendation of the Audit
Committee, a resolution to reappoint
EY as such will be proposed at the
forthcoming AGM. Any remuneration
received by EY for: (i) auditing this Annual
Report; and (ii) any other (non-audit)
services has been disclosed in note 5
to the Group’s financial statements.
Approval of Directors’ Report
This Directors’ Report was approved and
issued by the Board and signed on its
behalf by
James Pochin
General Counsel and Company Secretary
28 April 2025
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Strategic Report
Governance
Financial Statements
Additional Information
Financial
Statements
Contents
132
Independent Auditor’s Report to the members
of THG PLC
142
Consolidated statement of comprehensive income
143
Consolidated statement of financial position
144
Consolidated statement of changes in equity
145
Consolidated statement of cash flows
146
Notes to the consolidated financial statements
187
Company statement of financial position
188
Company statement of changes in equity
189
Notes to the Company statement
of financial statements
194
Alternative performance measures
196
Glossary
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Strategic Report
Governance
Financial Statements
Additional Information
Opinion
In our opinion:
– THG PLC’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view
of the state of the Group’s and of the Company’s affairs as at 31 December 2024 and of the Group’s loss for the year then
ended;
– the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
– the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of THG PLC (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2024 which comprise:
Group
Company
Consolidated statement of comprehensive income for the
year ended 31 December 2024
Company statement of financial position as at 31 December 2024
Consolidated statement of financial position as at
31 December 2024
Company statement of changes in equity for the year ended
31 December 2024
Consolidated statement of changes in equity for the year
ended 31 December 2024
Related notes 1 to 11 to the financial statements including material
accounting policy information
Consolidated statement of cash flows for the year ended
31 December 2024
Related notes 1 to 29 to the financial statements, including
material accounting policy information
– Following the refinancing
that completed in April 2025,
Management’s going concern
assessment and forecasts were
updated to reflect changes in
covenants, the size of the facilities
available and the associated term of
each amended facility. We read and
evaluated the signed agreements to
ascertain any financial or non‑financial
covenant restrictions which are in
place and corroborated key terms.
We obtained management’s updated
schedule of the amended loan
facilities and covenants thereon
for the going concern period.
We confirmed that loan repayments
have been appropriately included
within management’s forecasts to
the extent they are due in the period.
We assessed the forecast compliance
of each covenant throughout the going
concern period.
– We verified the cash positions
as at 31 December 2024 and
31 March 2025 to bank statements,
and to bank confirmations as at
31 December 2024.
– We reviewed the accuracy of
management’s forecasting by
comparing the forecast results
for the period 1 January 2025 to
31 March 2025 to actual results
as reported within management
accounts and flash results up to
the 31 March 2025.
– We identified additional stress tests
that were then run by management
to determine the impact of changing
some of management’s key
assumptions on the going concern
assessment. These key assumptions
were in relation to the revenue growth
rate and the EBITDA margin, both
of which would impact the liquidity
headroom in the going concern
period. Covenant compliance only
becomes applicable when the
business draws down on more than
40% of the existing RCF facilities
until 30 December 2025, and 20%
subsequently until the RCF expires in
May 2029. Management performed
these stress tests by sensitising for
each key assumption individually
based on their expectation of a
reasonable downside scenario for
that assumption, and then prepared
a reverse stress test by sensitising
multiple assumptions in order to
reduce headroom to nil. We then
evaluated the likelihood of the
scenario that would reduce headroom
to nil.
– We reviewed the appropriateness
of management’s going concern
disclosure in describing the risks
associated with its ability to continue
to operate as a going concern until
30 April 2026.
– The audit procedures on going concern
were supervised and directed by the
audit engagement partner and senior
members of the team.
Our key observations in relation to the
work performed are:
– In management’s base case and
plausible downside scenario the Group
retained headroom on forecast cash
and covenant compliance throughout
the going concern assessment period.
The lowest level of cash headroom
identified is £53m in management’s
downside scenario.
– Cash balances as at 31 December
2024 total £309m (excluding
cash held in the disposal group
presented as held for distribution at
the end of the year). The Group is
projected to meet all of its covenant
tests (which only apply when the
Group draws down on more than
40% of the existing RCF facilities
until 30 December 2025, and 20%
subsequently until the RCF expires in
May 2029) throughout the forecast
period after applying sensitivities
and stress testing modelled by
management except for the reverse
stress test which was designed to
identify which assumptions would
eliminate headroom in the model.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events
or conditions that, individually or
collectively, may cast significant doubt
on the Group and Company’s ability
to continue as a going concern for the
period to 30 April 2026.
In relation to the Group and Company’s
reporting on how they have applied the
UK Corporate Governance Code, we
have nothing material to add or draw
attention to in relation to the directors’
statement in the financial statements
about whether the directors considered
it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the
responsibilities of the directors with
respect to going concern are described
in the relevant sections of this report.
However, because not all future events
or conditions can be predicted, this
statement is not a guarantee as to the
Group’s ability to continue as a going
concern.
Financial Statements
The financial reporting framework that
has been applied in the preparation
of the Group financial statements
is applicable law and UK adopted
international accounting standards.
The financial reporting framework that
has been applied in the preparation
of the Company financial statements
is applicable law and United Kingdom
Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United
Kingdom Generally Accepted Accounting
Practice).
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards
are further described in the Auditor’s
responsibilities for the audit of the
financial statements section of our
report. We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group and
parent in accordance with the ethical
requirements that are relevant to our
audit of the financial statements in the
UK, including the FRC’s Ethical Standard
as applied to listed public interest
entities, and we have fulfilled our other
ethical responsibilities in accordance
with these requirements.
The non-audit services prohibited by the
FRC’s Ethical Standard were not provided
to the Group or the Company and we
remain independent of the Group and the
Company in conducting the audit.
Conclusions relating to going
concern
In auditing the financial statements, we
have concluded that the directors’ use of
the going concern basis of accounting
in the preparation of the financial
statements is appropriate. Our evaluation
of the directors’ assessment of the
Group and Company’s ability to continue
to adopt the going concern basis of
accounting included:
We have documented and evaluated
the process followed by management
to prepare the base case and downside
scenario forecasts which they have used
in their going concern assessment.
– We audited the forecasts underpinning
the going concern model which
are based on the Board-approved
forecasts, including checking
the arithmetical accuracy and
appropriateness of management’s
base case forecast over the going
concern assessment period to
30 April 2026.
– We challenged the reasonableness
of the key assumptions such as the
revenue growth rate and EBITDA
margin used within the base case and
downside scenarios, and compared
them to external evidence including
sector reports, industry trends and
historical data where appropriate.
Overview of our audit approach
Audit scope
Key audit matters
Materiality
We determined that centralised audit procedures could be
performed on 94 components covering all Group significant
accounts. We then considered whether the remaining
amounts in relation to Group significant account balances
not yet subject to audit procedures, in aggregate, could give
rise to a risk of material misstatement of the Group financial
statements. We selected an additional 5 components of the
Group to include in our audit scope to address these risks and
performed specified procedures on these components.
– Revenue recognition (Group).
– Significant disclosures (Group).
– Impairment of intangible assets
in the THG Beauty CGU (Group).
– Demerger of THG Ingenuity
(Group).
– Recoverability of the
Company’s investment in
subsidiaries (Company).
– Overall Group materiality
of £10m which represents
0.5% of Group revenue
from continuing and
discontinued operations.
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Additional Information
An overview of the scope of the
Company and Group audits
In the current year our audit scoping
has been updated to reflect the new
requirements of ISA (UK) 600 (Revised).
We have followed a risk-based approach
when developing our audit approach
to obtain sufficient appropriate audit
evidence on which to base our audit
opinion. We performed risk assessment
procedures to identify and assess risks
of material misstatement of the Group
financial statements and identified
significant accounts and disclosures.
When identifying components on which
audit work needed to be performed
to respond to the identified risks of
material misstatement of the Group
financial statements, we considered
our understanding of the Group and
its business environment, the Group’s
system of internal control at the entity
level, and the existence of centralised
processes and applications.
We determined that centralised audit
procedures could be performed on
94 components covering all Group
significant accounts.
We then considered whether the
remaining amounts in relation to Group
significant account balances not yet
subject to audit procedures, in aggregate,
could give rise to a risk of material
misstatement of the Group financial
statements. We selected an additional
5 components of the Group to include in
our audit scope to address these risks.
Having identified the components
for which work will be performed, we
determined the scope to assign to each
component.
For all 5 components selected, we
performed specified audit procedures to
obtain evidence for one or more relevant
assertions.
Our scoping to address the risk of
material misstatement for each key audit
matter is set out in the Key audit matters
section of our report.
Involvement with component teams
All audit work performed for the purposes
of the audit was undertaken by the Group
audit team.
Climate change
Stakeholders are increasingly interested
in how climate change will impact THG
PLC. The Group has determined that
the most significant future impacts
from climate change on its operations
will be from transition and physical
risks. These are explained on pages
62 to 71 in the required Task Force On
Climate Related Financial Disclosures
and on pages 72 to 82 in the principal
risks and uncertainties. They have also
explained their climate commitments
on page 71. All of these disclosures form
part of the “Other information”, rather
than the audited financial statements.
Our procedures on these unaudited
disclosures therefore consisted solely
of considering whether they are
materially inconsistent with the financial
statements or our knowledge obtained
in the course of the audit or otherwise
appear to be materially misstated, in
line with our responsibilities on “Other
information”.
In planning and performing our audit
we assessed the potential impacts of
climate change on the Group’s business
and any consequential material impact
on its financial statements.
The Group has explained in the other
judgements and sources of estimation
uncertainty (note 1) its articulation of
how climate change has been reflected
in the financial statements. There are
no significant judgements or estimates
relating to climate change in the notes to
the financial statements.
Our audit effort in considering the impact
of climate change on the financial
statements was focused on evaluating
management’s assessment of the impact
of climate risk, physical and transition,
their climate commitments, the effects of
material climate risks disclosed on pages
65 to 71 and whether these have been
appropriately reflected in asset values
where these are impacted by future
cash flows. As part of this evaluation,
we performed our own risk assessment,
supported by our climate change internal
specialists, to determine the risks of
material misstatement in the financial
statements from climate change which
needed to be considered in our audit.
We also challenged the Directors’
considerations of climate change risks in
their assessment of going concern and
viability and associated disclosures.
Based on our work we have not identified
the impact of climate change on the
financial statements to be a key audit
matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our audit of
the financial statements of the current
period and include the most significant
assessed risks of material misstatement
(whether or not due to fraud) that we
identified. These matters included those
which had the greatest effect on: the
overall audit strategy, the allocation of
resources in the audit; and directing the
efforts of the engagement team. These
matters were addressed in the context of
our audit of the financial statements as
a whole, and in our opinion thereon, and
we do not provide a separate opinion on
these matters.
Revenue recognition (£1,943m1, 2023: £2,045m1)
Risk
Our response to the risk
Refer to the Audit Committee Report (page 97); Accounting
policies (pages 147 to 148); and Note 2 of the Consolidated
Financial Statements (pages 154 to 155)
Revenue is a key metric when evaluating the performance of the
Group and receives significant scrutiny externally and internally.
Product revenue (D2C/B2B revenue) is primarily comprised of
a large volume of small value transactions (Beauty & Nutrition -
continuing). Revenue from Ingenuity (discontinued) is split across
both product revenues and other revenues including services
and hosting. As the Group achieves c. 30% of its revenue in the
final quarter, we consider it appropriate to heighten our risk
response in this quarter.
Our risk in relation to revenue recognition incorporates the
following:
For all significant streams:
– Risk of bias or fraud through management manipulation of
revenue recognised by non-routine/manual adjustments, with
a particular focus on postings made in the final quarter of
the year.
– Risk of bias or fraud through management inappropriately
classifying revenue between segments.
In response to this risk, we:
– Performed a walkthrough of the relevant controls over revenue
recognition for all significant revenue streams within the Group.
– Adopted a data analytics approach to corroborate our
expectation of the relationship between revenue and cash
receipts for D2C websales and revenue, trade receivables
and cash receipts for B2B sales. Any material exceptions,
representing journals outside of the standard process which
may be indicative of management override of controls, were
substantively tested.
– We audited material non-routine journal entry postings recorded
to Ingenuity revenue streams.
– We audited material non-routine journal entry/consolidation
postings recorded to any significant revenue stream during
the period with the purpose of reclassifying revenue between
segments.
– For journals identified which satisfied the criteria outlined
above, we obtained supporting evidence from management to
corroborate that the journal entry was valid, appropriate and
adequately supported.
Key observations communicated to the Audit Committee
Through our analytics procedures and journal testing performed we have gained sufficient assurance that the revenue recognised in
the year is appropriately recorded.
How we scoped our audit to respond to the risk
We performed centralised procedures over this risk which covered 92% of revenue. We supplemented this by also performing specified
procedures over revenue in one component, which covered a further 3% of revenue.
Financial Statements
1. Total Group revenue includes both continuing and discontinued revenue.
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Significant disclosures (Adjusted items - 2024: £141.3m, 2023: £48.8m)1
Risk
Our response to the risk
Refer to the Audit Committee Report (page 96); Accounting
policies (page 152); and Note 4 of the Consolidated Financial
Statements (pages 156 to 158)
Our risk is focused on the following areas that we consider are
more complex or subjective disclosure items:
– Adjusted profit measures – potential for amounts to be
classified as adjusted that are not in line with management’s
accounting policy.
– Whether the accounts when taken as a whole are fair,
balanced and understandable.
In response to this risk, we have:
– Ensured that narrative within the Annual Report and Accounts
(ARA) does not give undue prominence to Alternative
Performance Measures (APMs), checking that the APM is
reconciled to the nearest GAAP measure and that APMs
disclosed are consistent year on year.
– Understood the costs that have been proposed by management
for separate disclosure as adjusted items in the financial
statements and challenged whether these costs comply with
the Group’s policy, merit separate presentation or whether they
are simply the ongoing costs of the business.
– Evaluated how the Board and those charged with governance
have assessed and concluded that the Annual Report &
Accounts is fair, balanced and understandable.
Key observations communicated to the Audit Committee
We raised observations to the Audit Committee in relation to certain judgments that had been made in management’s determination of
adjusted items and challenged the Audit Committee on the appropriateness of conclusions initially reached by management.
We requested that certain disclosures provided within note 4 were enhanced to ensure that the narrative included was sufficient
and appropriate to reflect the nature of items included in this note and ensure any judgements taken by management were clearly
disclosed to a user of the financial statements in order to enable them to form a view on the appropriateness of the adjustments
being made.
Overall, we concluded that the Annual Report & Accounts, when taken as a whole, is considered to be fair, balanced and
understandable.
How we scoped our audit to respond to the risk
We performed procedures in relation to adjusted profit measures centrally for the Group as a whole.
Our procedures in relation to assessing whether the accounts, when taken as a whole were fair, balanced and understandable, were
not impacted by our scoping of account balances.
Impairment of intangible assets in the THG Beauty CGU (£815m, 2023: £879m carrying value of CGU)
Risk
Our response to the risk
Refer to the Audit Committee Report (page 96); Accounting
policies (pages 148 to 149); and Note 11 of the Consolidated
Financial Statements (pages 162 to 164)
There is a risk that the recoverable value of assets within the
THG Beauty CGU are below the carrying amount resulting in an
impairment.
The CGU continues to operate in a challenging macroeconomic
environment, and the model continues to be sensitive to
changes in key assumptions, therefore we identified a
significant risk associated with the impairment assessment.
The impairment assessment requires management to make a
number of key assumptions, including in respect of short and
long-term growth rates, EBITDA margins and the discount rate
adopted. There is a risk that optimism in the assumptions could
lead to an unrecorded impairment.
In response to this risk, we have:
– Performed a walkthrough of management’s annual impairment
review process and assessed the design effectiveness and
implementation of key controls.
– Obtained management’s impairment assessment and evaluated
the methodology adopted to confirm it is consistent with the
requirements of IAS 36.
– Assessed the reliability of management’s forecasts by
comparing previous forecasts to actuals. We validated that the
source of the forecasts used for the impairment model is the
same underlying cash flows used for other parts of the audit,
including going concern.
– Challenged the reasonableness of the forecasts used in the
assessment including key assumptions (revenue growth,
EBITDA margin) by comparing to third party industry forecasts,
competitors and historic actuals.
– We engaged EY valuations specialists to calculate an
independent range of the discount rate and perpetuity rate
expected for the THG Beauty CGU.
– Assessed the sensitivity of the model to reasonably possible
changes in key assumptions both in isolation and as a combined
scenario.
– Assessed the clerical accuracy of the model.
– Assessed the impairment disclosure presented by management
and ensured this is in accordance with the requirements of ‘IAS
36 Impairment of Assets’.
Key observations communicated to the Audit Committee
We are satisfied that the carrying value of assets in this CGU is not impaired. We have highlighted to the Audit Committee the
sensitivity of the THG Beauty impairment model to reasonably possible changes in key assumptions when applied in combination such
as the revenue growth rate and the discount rate. We have concluded that THG’s disclosures sufficiently describe this sensitivity, and
that the disclosures in the Annual Report and Accounts regarding the Impairment assessment for this CGU are in line with IAS 36.
We observed that the level of uncertainty at the moment meant that it is hard in the current environment to predict the nature and
extent of any impact on the entity in relation to recently announced US tariffs. We considered management’s initial assessment of the
expected impact of tariffs on the CGU and concluded that this would be covered by the headroom available in the model and therefore
would not change our overall conclusion.
How we scoped our audit to respond to the risk
Our procedures were not impacted by our scoping of account balances.
Financial Statements
1. Includes both continuing and discontinued adjusted items.
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Additional Information
Key audit matters continued
Demerger of THG Ingenuity
Risk
Our response to the risk
Refer to the Audit Committee Report (page 96); Accounting
policies (page 153); and Note 12.2 of the Consolidated
Financial Statements (pages 168 to 169)
On 17 September 2024 the Group announced the proposed
demerger of the THG Ingenuity division which completed on
2 January 2025. Given the significant complexity associated
with the transaction and corresponding accounting implications
which include classification and impairment we concluded that
this represented a significant risk for the audit.
We considered that there were three elements to consider in
relation to accounting for this risk:
– The risk of inappropriate classification and measurement
of balances associated with the demerged business in
comparison with the requirements of IFRS 5 ‘Non-current
assets held for sale and discontinued operations’.
– The risk that the carrying value of the net assets in the
demerged business is less than the fair value less cost to
sell and therefore an impairment is required.
– Assessment of the requirements of IFRIC 17 ‘Distributions
of non-cash assets to owners’ including whether a dividend
liability should be recorded and if so what the appropriate fair
value of that dividend should be.
In response to this risk, we have:
– Obtained an understanding of the transaction by reviewing the
RNS announcements to the markets, the step plan and legal
documentation underlying the transaction.
– Assessed the accounting treatment proposed by management
in respect of classification as an asset held for distribution/
discontinued operation against the requirements of IFRS 5
‘Non‑current assets held for sale and discontinued operations’.
– Considered the measurement requirements of the assets held
for distribution including impairment assessment.
– Considered whether the requirements of IFRIC 17 ‘Distributions
of non-cash assets to owners’ were satisfied and if so if a
dividend liability should therefore be recorded. We have then
considered the appropriateness of the fair value exercise
undertaken by management.
– Assessed the completeness and adequacy of the disclosures
in line with the requirements of IFRS 13 and IFRIC 17.
Key observations communicated to the Audit Committee
In relation to classification and presentation:
– We concluded that the Group met the requirements outlined in IFRS 5 to classify Ingenuity net assets as held for distribution on
the basis of actions taken during 2024, the assets being available for immediate distribution as at 31 December 2024, and the
demerger completing on 2 January 2025.
– We concluded it was appropriate to present the THG Ingenuity results as a discontinued operation in line with IFRS 5 on the basis
that Ingenuity was a ‘separate major line of business’ and had previously been presented as a separate segment.
In relation to impairment of assets:
– We concluded that management’s fair value assessment as at 31 December 2024 was in accordance with IAS 36 and supported
that the fair value less cost to sell of the demerged Group was in excess of the carrying value of the net assets and therefore that it
was appropriate for the assets held for distribution to remain at their carrying value.
In relation to dividend liability recognition:
– We concluded that the requirements per IFRIC 17 were met and that a dividend liability should be recognised given the distribution
was appropriately authorised and no longer at the discretion of the entity on 27 December 2024 following shareholder approval
being received.
– We engaged our EY Valuation specialists to assist in assessing the reasonableness of management’s fair value assessment
including the methodology adopted and whether the fair value recorded fell within an acceptable range. We concluded that the
dividend liability is appropriately recorded at the fair value of the net assets to be distributed.
How we scoped our audit to respond to the risk
Our procedures were not impacted by our scoping of account balances.
Recoverability of the Company’s investment in subsidiaries
Risk
Our response to the risk
Refer to the Audit Committee Report (page 97); Accounting
policies (page 189); and Note 5 of the Company Financial
Statements (pages 190 to 191)
The Company balance sheet included investment in subsidiary
undertakings of £558m and intercompany receivables of
£1,646m. There is a risk that these amounts may not be
recoverable and that an impairment is required.
In response to this risk, we have:
– For the investment held in THG Insurance Limited we compared
the carrying amount of the investment to the net assets of
this subsidiary, to identify whether the net assets value was
in excess of the carrying value.
– For the investment held in THG Intermediate Holdings Limited
we compared the carrying amount of the investment and
intercompany receivable balances to the recoverable amount of
the subsidiaries, as derived from the impairment assessments
performed for the THG Beauty and THG Nutrition CGUs. As part
of this assessment we also considered the quantum of external
debt that would require repayment.
– Considered the carrying value of investment in subsidiaries and
intercompany receivables in light of the market capitalisation of
the Group.
Key observations communicated to the Audit Committee
An impairment of £553m has been recorded against investments which reduces the investment in subsidiary undertakings to £5m;
reflecting the recoverable value of the investment held in THG Insurance Limited. A further impairment of £99m has been recorded
against intercompany receivables.
How we scoped our audit to respond to the risk
Our procedures were not impacted by our scoping of account balances, as we performed our responsive audit procedures on total
investment and intercompany receivable balances.
In the prior year, our auditor’s report included key audit matters in relation to impairment of intangible assets in the THG Ingenuity
CGU, and capitalisation of platform development costs. In the current year, impairment of THG Ingenuity has been incorporated
into our fair value procedures performed and outlined above on the demerger. For capitalisation of platform development costs
this area was deemed to have a lower effect than those outlined above on our overall audit strategy and the allocation of
resources and therefore has not been identified as a key audit matter.
Financial Statements
Our application of materiality
We apply the concept of materiality
in planning and performing the audit,
in evaluating the effect of identified
misstatements on the audit and in
forming our audit opinion.
Materiality
The magnitude of an omission or
misstatement that, individually or in
the aggregate, could reasonably be
expected to influence the economic
decisions of the users of the financial
statements. Materiality provides a
basis for determining the nature and
extent of our audit procedures.
We determined materiality for the
Group to be £10m (2023: £10m), which
is 0.5% (2023: 0.5%) of Group revenue,
including revenue from discontinued
operations. We believe that revenue is
the most important benchmark for users
of the financial statements as it is a key
performance indicator within the Group’s
financial reporting and communications
to the market.
We determined materiality for the
Company to be £10m (2023: £10m),
which is 1% (2023: 1%) of equity, capped
at Group materiality.
During the course of our audit, we
reassessed initial materiality set
at the planning stage of the audit,
but concluded that we did not need
to change the amount or basis of
materiality.
Performance materiality
The application of materiality at the
individual account or balance level.
It is set at an amount to reduce to an
appropriately low level the probability
that the aggregate of uncorrected and
undetected misstatements exceeds
materiality.
On the basis of our risk assessments,
our judgement was that performance
materiality was 50% (2023: 50%) of
our planning materiality, namely £5.0m
(2023: £5.0m). We have set performance
materiality at this percentage due to
the level of errors identified through the
course of the 2023 audit.
Audit work is undertaken on components
for the purpose of responding to the
assessed risks of material misstatement
of the Group financial statements.
The performance materiality set for each
component is based on the relative scale
and risk of the component to the Group as
a whole and our assessment of the risk of
misstatement at that component. In the
current year, the range of performance
materiality allocated to components was
£1.0m to £4.4m (2023: £2.5m to £4.4m).
Reporting threshold
An amount below which identified
misstatements are considered as being
clearly trivial.
We agreed with the Audit Committee that
we would report to them all uncorrected
audit differences in excess of £0.5m (2023:
£0.5m), which is set at 5% (2023: 5%) of
planning materiality, as well as differences
below that threshold that, in our view,
warranted reporting on qualitative grounds.
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Additional Information
Our application of materiality
continued
Reporting threshold continued
We evaluate any uncorrected
misstatements against both the
quantitative measures of materiality
discussed above and in light of other
relevant qualitative considerations in
forming our opinion.
Other information
The other information comprises the
information included in the annual report
set out on pages 1 to 129 and 193 to 198,
other than the financial statements and
our auditor’s report thereon. The directors
are responsible for the other information
contained within the annual report.
Our opinion on the financial statements
does not cover the other information and,
except to the extent otherwise explicitly
stated in this report, we do not express
any form of assurance conclusion
thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the financial
statements or our knowledge obtained
in the course of the audit or otherwise
appears to be materially misstated. If we
identify such material inconsistencies
or apparent material misstatements, we
are required to determine whether this
gives rise to a material misstatement in
the financial statements themselves. If,
based on the work we have performed,
we conclude that there is a material
misstatement of the other information,
we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters
prescribed by the Companies
Act 2006
In our opinion, the part of the directors’
remuneration report to be audited has
been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work
undertaken in the course of the audit:
– the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
– the strategic report and the directors’
report have been prepared in accordance
with applicable legal requirements.
Matters on which we are
required to report by exception
In the light of the knowledge and
understanding of the Group and the
Company and its environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us to
report to you if, in our opinion:
– adequate accounting records have not
been kept by the Company, or returns
adequate for our audit have not been
received from branches not visited by
us; or
– the Company financial statements
and the part of the Directors’
Remuneration Report to be audited are
not in agreement with the accounting
records and returns; or
– certain disclosures of directors’
remuneration specified by law are not
made; or
– we have not received all the
information and explanations we
require for our audit.
Corporate Governance
Statement
We have reviewed the directors’
statement in relation to going concern,
longer-term viability and that part of the
Corporate Governance Statement relating
to the Group and Company’s compliance
with the provisions of the UK Corporate
Governance Code specified for our
review by the UK Listing Rules.
Based on the work undertaken as part
of our audit, we have concluded that
each of the following elements of the
Corporate Governance Statement is
materially consistent with the financial
statements or our knowledge obtained
during the audit:
– Directors’ statement with regards to
the appropriateness of adopting the
going concern basis of accounting and
any material uncertainties identified
set out on page 81;
– Directors’ explanation as to its
assessment of the Company’s
prospects, the period this assessment
covers and why the period is
appropriate set out on pages 81 to 82;
– Directors’ statement on whether it has a
reasonable expectation that the Group
will be able to continue in operation and
meets its liabilities set out on page 81;
– Directors’ statement on fair, balanced
and understandable set out on page 97;
– Board’s confirmation that it has
carried out a robust assessment of the
emerging and principal risks set out on
pages 72 to 82;
– The section of the annual report that
describes the review of effectiveness of
risk management and internal control
systems set out on pages 72 to 74; and
– The section describing the work of the
audit committee set out on pages 94
to 99.
Responsibilities of directors
As explained more fully in the directors’
responsibilities statement set out on page
128, the directors are responsible for the
preparation of the financial statements
and for being satisfied that they give a
true and fair view, and for such internal
control as the directors determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error.
In preparing the financial statements, the
directors are responsible for assessing
the Group and Company’s ability to
continue as a going concern, disclosing,
as applicable, matters related to going
concern and using the going concern
basis of accounting unless the directors
either intend to liquidate the Group or the
Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of these financial statements.
Explanation as to what extent
the audit was considered capable
of detecting irregularities,
including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect irregularities, including
fraud. The risk of not detecting a material
misstatement due to fraud is higher
than the risk of not detecting one
resulting from error, as fraud may involve
deliberate concealment by, for example,
forgery or intentional misrepresentations,
or through collusion. The extent to
which our procedures are capable of
detecting irregularities, including fraud is
detailed below.
However, the primary responsibility
for the prevention and detection of
fraud rests with both those charged
with governance of the Company and
management.
– We obtained an understanding of
the legal and regulatory frameworks
that are applicable to the Group
and determined that the most
significant are those that relate to
the reporting framework (UK‑adopted
IAS, Companies Act 2006, the
UK Corporate Governance Code
and the Listing Rules of the UK
Listing Authority) and the relevant
tax compliance regulations in the
jurisdictions in which THG PLC
operates. In addition, we concluded
that there are certain significant
laws and regulations that may have
an effect on the determination of
the amounts and disclosures in
the financial statements and those
laws and regulations relating to
health and safety, employee matters,
environmental, manufacturing,
marketing and advertising, data
protection and privacy, and bribery and
corruption practices.
– We understood how THG PLC is
complying with those frameworks by
making enquiries of management,
internal audit, those responsible for
legal and compliance procedures
and the Company Secretary. We
corroborated our enquiries through our
review of Board minutes, internal audit
reports and papers provided to the
Audit Committee and Risk Committee.
– We assessed the susceptibility of
the Group’s financial statements to
material misstatement, including how
fraud might occur by meeting with
management and those charged
with governance to understand
where it considered there was a
susceptibility to fraud. We also
considered performance targets
and the propensity to influence
efforts made by management to
manage earnings. Where the risk was
considered to be higher, we performed
audit procedures to address each
identified fraud risk. These procedures
included testing higher risk journal
entries and were designed to provide
reasonable assurance that the
financial statements were free from
fraud and error.
– Based on this understanding we
designed our audit procedures to
identify non-compliance with such
laws and regulations. Our procedures
involved journal entry testing, with
a focus on consolidation journals
and journal entries indicating large
or unusual transactions based on
our understanding of the business.
We performed inquiries of internal
and external legal counsel, reviewed
material items within the Group’s
legal expenses, and reviewed
media coverage of the Group to
identify whether there were relevant
matters that had not been brought
to our attention through discussions
with management. In addition, we
completed procedures to conclude
on the compliance of the disclosures
in the Annual Report and Accounts
with the requirements of the relevant
accounting standards, UK legislation
and the UK Corporate Governance
Code 2018.
A further description of our
responsibilities for the audit of the
financial statements is located on
the Financial Reporting Council’s
website at https://www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters we are required
to address
– Following the recommendation
from the audit committee we were
appointed by the Company in 2011 to
audit the financial statements for the
year ending 31 December 2011 and
subsequent financial periods.
The period of total uninterrupted
engagement including previous
renewals and reappointments
is 14 years, covering the years
ending 31 December 2011 to
31 December 2024.
The Group listed on the London
Stock Exchange for the year ended
31 December 2020, became a UK PIE
and therefore at this point mandatory
auditor rotation rules became effective.
– The audit opinion is consistent with
the additional report to the Audit
Committee.
Use of our report
This report is made solely to the
Company’s members, as a body, in
accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit
work has been undertaken so that we
might state to the Company’s members
those matters we are required to state
to them in an auditor’s report and for
no other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Karl Havers
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
29 April 2025
Financial Statements
Independent Auditor’s Report to the members of THG PLC continued
140
141
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Consolidated statement of comprehensive income
for the year ended 31 December 2024
Consolidated statement of financial position
as at 31 December 2024
Note
2024
Total
£’000
2023 (restated1)
Total
£’000
Continuing operations
Revenue
2
1,751,404
1,879,866
Cost of sales
(1,057,809)
(1,082,493)
Gross profit
693,595
797,373
Distribution costs
(230,957)
(277,255)
Administrative costs
(610,533)
(559,350)
Operating loss
3
(147,895)
(39,232)
Finance income
8
9,049
12,878
Finance costs
8
(63,554)
(65,898)
Loss before taxation
(202,400)
(92,252)
Income tax credit/(charge)
9
21,867
(15,710)
Loss for the financial year from continuing operations
(180,533)
(107,962)
Discontinued operations
Loss for the financial year from discontinued operations, net of tax
12.2
(145,607)
(140,410)
Loss for the financial year
(326,140)
(248,372)
Other comprehensive income/(expense)
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations, net of tax
12,175
(46,255)
Net loss in cash flow hedges
(7,941)
(5,220)
Total comprehensive expense for the financial year
(321,906)
(299,847)
Basic and diluted loss per share continuing operations (£)
26
(0.13)
(0.08)
Basic and diluted loss per share discontinued operations (£)
26
(0.11)
(0.11)
Basic and diluted loss per share (£)
26
(0.24)
(0.19)
Adjusted EBITDA
Note
2024
Total
£’000
2023 (restated)
Total
£’000
Operating loss
(147,895)
(39,232)
Adjustments for:
Amortisation
11
19,880
21,005
Amortisation of acquired intangibles
11
45,506
48,953
Depreciation
3
24,824
24,059
Adjusted items – cash
4
24,547
10,445
Adjusted items – non-cash
4
42,440
21,162
Adjusted items – non-cash impairment
4
57,466
—
Share-based payments
7
16,579
16,723
EBITDA on discontinued categories
8,739
8,143
Post-demerger Adjusted EBITDA2
92,086
111,258
The comprehensive expense is 100% attributable to the owners of the parent company.
Note
31 December
2024
£’000
31 December
2023
£’000
Non-current assets
Intangible assets
11
958,322
1,207,383
Property, plant and equipment
12.1
64,890
273,171
Right-of-use assets
22
29,327
303,635
Investments
—
1,400
Other financial assets
14
4,590
7,999
Deferred tax asset
21
4,072
—
1,061,201
1,793,588
Current assets
Assets held for distribution
12.2
762,369
—
Inventories
13
265,371
297,143
Trade and other receivables
15
147,272
271,782
Other financial assets
14
727
1,915
Cash and cash equivalents
16
308,622
416,162
1,484,361
987,002
Total assets
2,545,562
2,780,590
Equity
Ordinary Shares
8,219
7,072
Share premium
23
2,117,148
2,024,824
Merger reserve
615
615
Capital redemption reserve
523
523
Hedging reserve
(36,134)
(20,020)
Cost of hedging reserve
33,456
25,283
FX reserve
27,779
15,604
Retained earnings
(1,845,779)
(1,032,234)
305,827
1,021,667
Non-current liabilities
Borrowings
18
491,782
621,011
Other financial liabilities
14
35,705
—
Lease liabilities
22
31,077
301,440
Provisions
19
11,911
22,130
Deferred tax liability
21
63,701
55,698
634,176
1,000,279
Current liabilities
Liabilities held for distribution
12.2
589,672
—
Contract liability
20
15,650
22,864
Trade and other payables
17
342,527
638,350
Borrowings
18
112,785
29,026
Current tax liability
3,568
1,266
Lease liabilities
22
10,293
43,537
Provisions
19
6,469
3,838
Other financial liabilities
14
23,264
19,763
Dividend liability
12.2
501,331
—
1,605,559
758,644
Total liabilities
2,239,735
1,758,923
Total equity and liabilities
2,545,562
2,780,590
The financial statements on pages 142 to 186 were approved by the Board of Directors on 28 April 2025 and were signed on its
behalf by:
Damian Sanders
Chief Financial Officer
Registered number: 06539496
1. Restated for discontinued operations, refer to note 12.2 for further detail.
2. Post-demerger Adjusted EBITDA is defined as operating profit before depreciation, amortisation, share-based payments, adjusted items and discontinued
categories.
142
143
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Consolidated statement of changes in equity
for the year ended 31 December 2024
Consolidated statement of cash flows
for the year ended 31 December 2024
Note
Ordinary
Shares
£'000
Share
premium
£'000
Merger
reserve
£'000
Capital
redemption
reserve
£'000
FX
reserve
£'000
Hedging
reserve
£'000
Cost of
hedging
reserve
£'000
Retained
earnings
£'000
Total
equity
£'000
Balance at
1 January 2023
6,903 2,024,452
615
523
61,859
(6,221)
16,704 (803,096) 1,301,739
Loss for the year
—
—
—
—
—
—
—
(248,372)
(248,372)
Other comprehensive
expense:
Impact of foreign exchange
—
—
—
—
(46,255)
—
—
—
(46,255)
Movement on hedging
instruments
—
—
—
—
—
(13,799)
8,579
—
(5,220)
Total comprehensive
(expense)/income
for the year
—
—
—
—
(46,255)
(13,799)
8,579
(248,372)
(299,847)
Issue of Ordinary
Share capital
169
372
—
—
—
—
—
—
541
Share-based payments
7
—
—
—
—
—
—
—
16,723
16,723
Deferred tax in equity
21
—
—
—
—
—
—
—
2,511
2,511
Balance at
31 December 2023
7,072 2,024,824
615
523
15,604
(20,020)
25,283 (1,032,234) 1,021,667
Balance at
1 January 2024
7,072 2,024,824
615
523
15,604
(20,020)
25,283 (1,032,234) 1,021,667
Loss for the year
—
—
—
—
—
—
—
(326,140)
(326,140)
Other comprehensive
income:
Impact of foreign exchange
—
—
—
—
12,175
—
—
—
12,175
Movement on hedging
instruments
—
—
—
—
—
(16,114)
8,173
—
(7,941)
Total comprehensive
(expense)/income
for the year
—
—
—
—
12,175
(16,114)
8,173
(326,140)
(321,906)
Issue of Ordinary
Share capital
1,147
92,324
—
—
—
—
—
—
93,471
Share-based payments
7
—
—
—
—
—
—
—
16,579
16,579
Deferred tax in equity
21
—
—
—
—
—
—
—
(2,653)
(2,653)
Dividend in specie
12.2
—
—
—
—
—
—
—
(501,331)
(501,331)
Balance at
31 December 2024
8,219
2,117,148
615
523
27,779
(36,134)
33,456 (1,845,779) 305,827
Note
2024
£’000
2023
£’000
Cash flows from operating activities before adjusted cash flows
Cash generated from operations
25
136,412
162,258
Income tax paid
(621)
(5,411)
Net cash generated from operating activities before adjusted cash flows
135,791
156,847
Cash flows relating to adjusted items
(39,328)
(15,040)
Net cash generated from operating activities
96,463
141,807
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired
10
(23)
(20,259)
Proceeds from sale of non-core freehold assets
—
55,450
Purchase of property, plant and equipment
(31,709)
(46,289)
Purchase of intangible assets
(69,571)
(79,369)
Interest received
8
9,190
13,329
Net cash used in investing activities
(92,113)
(77,138)
Cash flows from financing activities
Proceeds from issuance of Ordinary Shares net of fees
93,319
—
Interest paid
(44,954)
(47,803)
Repayment of lease liabilities
22
(47,476)
(49,487)
Repayment of bank borrowings and loan fees
(23,800)
(25,000)
Net cash flow from financing activities
(22,911)
(122,290)
Net decrease in cash and cash equivalents
(18,561)
(57,621)
Cash and cash equivalents at the beginning of the year
416,162
473,783
Cash and cash equivalents at the end of the year
(including cash held in disposal groups)
16
397,601
416,162
Cash and cash equivalents held in disposal group presented as held for distribution
at the end of the year
12.2
88,979
—
Cash and cash equivalents at the end of the year
308,622
416,162
144
145
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Basis of preparation
The consolidated financial statements
have been prepared in accordance with
UK-adopted international accounting
standards (“IFRS”). The financial
statements have been prepared on
the historical cost basis, except for
derivatives which are held at fair value.
The accounting policies adopted by the
Group in the current year are consistent
with those adopted during the year
ended 31 December 2023.
There have been no new or amended
accounting standards or interpretations
adopted during the year that have had
a significant impact on the Group’s
financial statements.
The following new standards,
interpretations and amendments to
published standards and interpretations
have been issued and are relevant to the
Group for the period ending 31 December
2024 but have not been adopted early:
– IFRS 7 and 9 Amendments in respect
of the classification and measurement
of financial instruments
– IFRS 18 Presentation and Disclosure in
Financial Statements
The Group is currently reviewing the
likely impact of IFRS 18 on its statutory
reporting as well as any potential impact
from the amendments to IFRS 9 and
IFRS 7 in relation to credit and debit card
payments made by customers which are
receivable from banks and clear the bank
shortly after the transaction takes place
(as disclosed in note 17).
There are no other standards,
interpretations or amendments to IFRS
that have been issued but are not yet
effective that are expected to have a
material impact on the Group’s financial
statements.
Going concern
Accounting standards require that
Directors satisfy themselves that it
is reasonable for them to conclude
on whether or not it is appropriate to
prepare financial statements on the
going concern basis. There has been no
material uncertainty identified that would
cast significant doubt upon the Group’s
ability to continue using the going
concern basis of accounting for the 12
months to 30 April 2026.
The Group’s business activities, together
with the factors likely to affect its future
development, performance and position,
are set out in the Strategic Report on
pages 1 to 82.
The Group’s strategic planning cycle
includes an annual Budget process, which
is reviewed by the Board. This planning
process involves modelling under a series
of assumptions. Severe but plausible
downside scenarios were also modelled
setting out impacts of a combination of the
principal risks, as well as a reverse stress
test to identify what would be required
to either breach covenants or run out of
liquidity. This process is led by the Group
CFO and Deputy Group CFO along with
the Board and Independent Chair and CEO
providing further direction to align strategic
initiatives. Forecasts have been prepared
on a divisional level. The Directors of the
Group review its Budget periodically, which
is revisited and revised as appropriate in
response to evolving market conditions.
In considering the Group’s financial
position, the Directors have considered:
– expected future growth of trading
businesses;
– margins expected to be achieved in the
future; and
– wider market and industry-specific
factors.
The Directors have also considered the
liquidity of the Group as well as available
facilities and note that as at the balance
sheet date, the Group had a total of £150m
in undrawn facilities, along with £309m
readily available cash held on the balance
sheet (excluding cash of £89.0m that left
the Group on demerger). Net debt at 31
December 2024 was £346m (31 December
2023: £563m), with net debt of £304m
(£215m on a pre demerger basis adjusting
for the cash held within THG Ingenuity)
(31 December 2023: £218m) before the
inclusion of IFRS 16 lease liabilities.
Post year end, On 4 April 2025 the
Company announced the completion
of its debt refinancing through to 2029.
As part of a plan to delever, an ‘amend
and extend’ refinancing was agreed that
reduced the Term Loan B from €600m to
€445m with maturity extended by three
years to December 2029. The Term Loan
A was partially repaid with a final stub
of £35m maturing in October 2025. The
undrawn RCF totals £150m and has also
been extended to 2029. The reduction in
facilities was partially funded by the equity
placing and equity raise.
The demerger of THG Ingenuity will
materially reduce the cash outflows of
the Company with substantial reductions
in lease commitments (c. £20m per
annum) and capex requirements, which
in turn mean that the Group requires
smaller banking facilities. Additional
liquidity was also obtained through asset
backed lending facilities. There are no
key covenants attached to the Term
Loan B or Term Loan A facilities which
are drawn down. Covenants attached to
the RCF are linked to net debt leverage
and only become effective when the
facility is drawn above 20%, which is
not anticipated to occur on test dates
(biannually).
This covenant requires the Group to
maintain the ratio of net debt over
adjusted EBITDA to below 4.50 – 3.50
(over the course of the term), which is
reviewed regularly, although as noted the
facility is not drawn. This facility provides
the Group liquidity optionality to manage
seasonal working capital movements.
These covenants are effective from
31 December 2025, prior to this the
existing covenants remain in place (gross
debt over adjusted EBITDA below 7.60
only in respect of the RCF).
The Directors are of the opinion that the
Group’s forecasts and projections, which
they believe are based on an appropriate
assessment of the market and past
experience taking account of reasonably
possible changes in trading performance
given the current market and economic
conditions, show that the Group should
be able to operate within the current
facility and comply with its banking
covenants in the event that the RCF
facilities are drawn upon.
The Directors have modelled a range
of scenarios, as outlined above, over
a three-year period. Further details of
the Group’s considerations are provided
in the Viability Statement and Going
Concern Statement on page 81.
As a result of the analysis performed,
including potential severe but plausible
downside scenarios, the Board believes
that the Group is able to adequately
manage its financing and principal
risks and that the Group will be able to
operate within the level of its facilities
and meet the required covenants for the
going concern assessment period. Based
on the above activity, the Directors are
satisfied that it is appropriate to prepare
the financial statements of the Group on
a going concern basis.
1. Accounting policies
The Group’s key accounting policies are
set out below. These policies have been
prepared on the basis of the recognition
and measurement requirements of IFRS
in effect that apply to accounting periods
beginning on or after 1 January 2024 and
have been applied to 2023 comparatives
where applicable.
a. Basis of consolidation
The Group financial statements consolidate
those of the Company and all its subsidiary
undertakings drawn up to 31 December
2024. Subsidiaries are all entities over
which the Group has control. When the end
of the reporting period of a subsidiary is not
31 December, the subsidiary prepares, for
consolidation purposes, additional financial
information as of the same date as the
financial statements of the Group. All
transactions and balances between Group
companies are eliminated on consolidation,
including unrealised gains and losses on
transactions between Group companies.
Where unrealised losses on intra-Group
asset sales are reversed on consolidation,
the underlying asset is also tested for
impairment from a Group perspective.
Amounts reported in the financial
statements of subsidiaries have been
adjusted where necessary to ensure
consistency with the accounting policies
adopted by the Group. Profit or loss
and other comprehensive income of
subsidiaries acquired or disposed of during
the year are recognised from the effective
date of acquisition, or up to the effective
date of disposal, as applicable.
b. Business combinations
Business combinations are accounted for
using the acquisition method under IFRS 3
Business Combinations. The consideration
transferred by the Group to obtain control
of a subsidiary is calculated as the sum
of the acquisition-date fair values of
assets transferred, liabilities incurred,
and the equity interests issued by the
Group, which includes the fair value of any
asset or liability arising from a contingent
consideration arrangement. Acquisition
costs are expensed as incurred.
The Group recognises identifiable assets
acquired and liabilities assumed, including
contingent liabilities, in a business
combination regardless of whether
they have been previously recognised
in the acquiree’s financial statements
prior to the acquisition. Assets acquired
and liabilities assumed are measured
at their acquisition-date fair values.
These fair values can be re-assessed
retrospectively for a period of 12 months
from the acquisition date to reflect new
information obtained about facts and
circumstances that existed as of the
acquisition date, and if known, would have
resulted in the recognition of those assets
and liabilities as of that date. Goodwill
is stated after separate recognition of
other identifiable intangible assets. It is
calculated as the excess of the sum of
a) fair value of consideration transferred,
b) the recognised amount of any
non‑controlling interest in the acquiree
and c) acquisition‑date fair value of any
existing equity interest in the acquiree,
over the acquisition-date fair values of
identifiable net assets. If the fair values
of identifiable net assets exceed the sum
calculated above, the excess amount.
In determining whether a transaction
is a business combination or an asset
purchase, the Group considers the inputs,
processes and outputs acquired in
accordance with IFRS 3.
c. Revenue
Revenue consists primarily of direct to
consumer ("D2C") internet sales along
with business to business ("B2B") sales.
D2C and B2B sales
Identifying performance obligations:
For D2C and B2B sales the performance
obligation is the delivery of the goods
purchased by the customer. Control of
goods is transferred upon delivery of the
product to the customer.
Identifying the transaction price: For D2C
sales, the customer pays in full at the point
of sale, with the transaction price allocated
to individual goods purchased. A contract
liability is recognised until the related
goods have been delivered. For B2B sales,
the customer pays in line with the agreed
credit terms.
Revenue is shown net of returns, with
expected sales returns estimated based on
historical return data applied to sales. These
returns are accounted for at the lower of
cost or net realisable value. A right of return
asset (and corresponding adjustment to
cost of sales) is also recognised for the right
to recover the goods from the customer.
Allocation of transaction price to
performance obligations: In general,
the whole transaction price is allocated
to the performance obligation. Where a
customer purchases multiple goods within
one transaction, the transaction price is
allocated to those goods based on relative
stand-alone selling prices.
Revenue recognition: Revenue is
recognised at the point of time when the
customer receives the goods, shown net
of returns.
Revenue from contracts
Identification of performance
obligations: THG Ingenuity Commerce
contracts often have multiple performance
obligations that include, but are not limited
to: creation of digital assets, marketing
services, stock management, fulfilment,
customer support services and access to
THG’s Ingenuity platform. Each contract
is reviewed individually once signed
and is assessed to identify the separate
performance obligations.
In a typical Ingenuity Commerce contract,
all goods and services provided are
considered to be ‘distinct’ as the client
can derive independent benefit from
each service provision and the promise
to transfer services to the customer is
separately identifiable. These contracts
contain multiple performance obligations.
Determining transaction prices:
Transaction prices are agreed in advance
of the commencement of the work and are
outlined within the signed contract. The
amount agreed per service is deemed to
be the fair value of the service provision.
Consideration receivable is usually at
a fixed price, however there are some
elements that are variable and dependent
on order volume and sales levels, for
example operations revenues made up
of fulfilment fees and revenue share
income. The charging structure for such
transactions is clearly detailed within the
signed contract.
Allocation of transaction price to
performance obligations: Where contracts
cover multiple performance obligations, the
transaction price is allocated on a basis
that is consistent with the sale of each
performance obligation in isolation.
Revenue recognition: Within certain
Ingenuity contracts, the amount of revenue
recognised depends on whether the Group
is acting as an agent or principal. The Group
acts as principal when it has control of the
specified good or service prior to transfer
to the customer. Where the Group acts
as principal, the revenue recorded is the
gross amount billed. Where the Group is an
agent, predominantly relating to revenue
share arrangements, revenue from the
customer and costs with suppliers are
reported on a net basis representing the
net margin earned. Whether the Group is
acting as principal or agent depends on
management’s analysis of both legal form
Notes to the consolidated financial statements
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For the purposes of impairment testing,
goodwill is reviewed by assessing the
cash-generating unit ("CGU") that has
benefited from the acquisition. If the
recoverable amount of the cash-generating
unit is less than its carrying amount, then
the impairment loss is allocated first to
reduce the carrying amount of the goodwill
allocated to the unit and then to the other
assets of the unit on a pro rata basis.
On disposal of a subsidiary, the attributable
amount of goodwill is included in the
determination of the profit and loss on
disposal.
Platform development costs
The costs of acquiring and developing
the platform and websites is capitalised
separately as an intangible asset.
Capitalised website costs include direct
costs of materials, services, directly
attributable overheads, payroll and
payroll-related costs for employees who
are directly associated with website
development projects. Such costs are only
capitalised when the criteria within IAS 38
are met.
Intellectual property
This includes separately acquired
customer lists, domain and trade names,
and other intellectual property, including
customer lists acquired as part of business
combinations.
Separately acquired intangible
assets are measured at cost on initial
recognition. Following initial recognition,
intangible assets are carried at cost
less any accumulated amortisation
and impairment losses.
Brands
Brands arising from business combinations
are recognised at fair value on acquisition
date. An assessment is made on the useful
economic life, and the intangible asset
is subsequently amortised over that life.
The useful economic life is reviewed on an
annual basis to confirm that the useful life
continues to be supportable.
Other intangible assets
Costs associated with developing new
products are capitalised as an intangible
asset, including directly associated costs.
Intangible assets are amortised on a
straight-line basis over their estimated
useful economic life. Amortisation is
charged to the statement of comprehensive
income, classified in expenses depending
on the nature of the asset. The estimates
of useful economic lives are reviewed on an
annual basis and any changes are treated
as changes in accounting estimates.
Where computer software is not
an integral part of a related item of
computer hardware, the software is
treated as an intangible asset. Computer
software is capitalised on the basis of
the costs incurred to acquire and bring
to use the specific software.
Amortisation is provided on the cost
of software and is calculated on a
straight‑line basis over the useful life
of the software.
The following useful economic lives
are applied:
Platform development costs
5-10 years
New product development
1-5 years
Brands
5-20 years
Intellectual property
(including customer lists,
domain and trade names)
2-20 years
g. Property, plant and equipment
Property, plant and equipment are
stated at historic purchase cost less
accumulated depreciation. Cost includes
the original purchase price of the asset
and the costs attributable to bringing
the asset to its working condition for its
intended use. Depreciation is provided
at the following annual rates in order to
write off each asset on a systematic basis
over its estimated useful economic life.
Depreciation is charged to the statement
of comprehensive income, classified in
expenses depending on the nature of
the asset.
At each reporting date, property, plant and
equipment is reviewed for impairment
if events or changes in circumstances
indicate that the carrying amount may
not be recoverable. When a review for
impairment is conducted, the recoverable
amount is assessed by reference to the
net present value of expected future
pre-tax cash flows of the relevant
cash‑generating unit or fair value less
costs to sell if higher. Any impairment in
value is charged to profit or loss in the
period in which it occurs.
Plant and machinery
5-10 years
Fixtures and fittings
3-20 years
Computer equipment
and software
1-10 years
Freehold buildings
20-50 years
Motor vehicles
3-7 years
Leasehold
improvements
Lower of lease
term or asset life
h. Discontinued operations and
assets held for distribution
The Group classifies a component of its
business as a discontinued operation
when it has been disposed of or is
classified as held for distribution, and
the disposal meets the criteria for being
a separate significant line of business or
geographical area of operations.
The post-tax profit or loss of the
discontinued operations is shown
as a single line on the face of the
consolidated statement of profit or loss,
separate from the continuing operating
results of the Group. When an operation
is classified as a discontinued operation,
the comparative consolidated statement
of profit or loss is represented as if
the operation had been discontinued
from the start of the comparative year.
Expenses are presented as discontinued
if they will cease to be incurred on
disposal of the discontinued operation.
A non-current asset (or disposal group)
is classified as held for distribution to
owners when the Group is committed to
distribute the asset (or disposal group) to
the owners. For this to be the case, the
assets must be available for immediate
distribution in their present condition and
the distribution must be highly probable.
The Group measures a non-current asset
(or disposal group) classified as held for
distribution to owners at the lower of
its carrying amount and fair value less
costs to distribute. No depreciation or
amortisation is charged in respect of
non-current assets classified as held for
distribution once the classification has
been made.
i. Borrowing costs
Borrowing costs incurred in relation to
bringing into use qualifying tangible and
intangible assets are capitalised as the
expenditure is incurred on such assets
and subsequently depreciated in line with
the useful economic life of the relevant
asset.
j. Inventories
Inventories are valued at the lower of
cost and net realisable value. For the
majority of inventory this is on an average
cost basis. The remainder is measured on
a standard cost basis. Cost of purchase
comprises the purchase price including
import duties and other taxes, transport
and handling costs and any other directly
attributable costs, less trade discounts.
A provision is made to write down any
slow-moving or obsolete inventory to net
realisable value.
Financial Statements
Notes to the consolidated financial statements continued
1. Accounting policies
continued
c. Revenue continued
Revenue from contracts continued
and substance of the agreement between
the Group and its business partners.
The allocated transaction price is
recognised from the point at which the
customer starts to benefit from the service
and over the time the service is provided.
For marketing services, stock management,
fulfilment, customer support services
and access to THG’s Ingenuity platform
these are recognised when the service is
provided.
The creation of digital assets revenue is
recognised on a percentage completion
basis as the work is performed because
the work does not create an asset with an
alternative use and the Group has a right to
payment for the work performed at each
point in time.
Revenue which is invoiced in advance
is recorded as a contract liability on
the balance sheet and released to the
statement of comprehensive income
account over the periods in which the
services are provided.
Costs associated with obtaining a
contract with a customer that would not
have been incurred if the contract had
not been obtained are recognised as an
asset where they are expected to be
recoverable and depreciated over the life
of the contract. Costs to obtain a contract
that would have been incurred regardless
of whether the contract was obtained or
not are recognised as an expense when
incurred, unless those costs are explicitly
chargeable to the customer regardless of
whether the contract is obtained.
Revenue recognised under IFRS 16
Revenue from internet hosting contracts is
recognised under IFRS 16 as the Group is
considered a lessor in these transactions.
Income from hosting contracts is
recognised on a straight-line basis from
the commencement date over the lease
term. Any initial direct costs incurred in
negotiating and arranging an operating
lease are added to the carrying amount of
the leased asset and recognised over the
lease term on the same basis as rental
income.
Revenue from memberships
Fees recognised in respect of memberships
are recorded on a straight‑line basis over
the membership period.
Barter income
For some of its monthly subscription
offerings, THG receives goods for inclusion
in its subscription boxes from business
partners in return for the marketing
exposure received by those products
being included in the subscription box.
The goods are recognised as stock when
received and held at their fair value. When
the box is sold, the revenue for providing
those marketing services is recognised
with an equal and offsetting entry
recorded in cost of goods sold.
LF Beauty Plus+ Rewards and Cult
Status Points
LF Beauty Plus+ Rewards points and Cult
Status Points issued by Lookfantastic
and Cult Beauty when a customer
purchases goods are a separate
performance obligation providing a
right to a future discount. The amounts
allocated to LF Beauty Plus+ Rewards
and Cult Status Points are deferred as a
contract liability within trade and other
payables. Revenue is recognised as the
points are redeemed by the customer.
d. Adjusted items
The business is managed and measured on
a day-to-day basis using underlying results
(Adjusted EBITDA). This is an important
metric utilised within the business to
monitor performance and guide strategic
business decisions. The metric captures
the Group’s view of underlying trading
performance after excluding non-recurring
items and initial investment/set-up
costs related to establishing the Group’s
warehousing and logistics facilities. Further
details of the categories considered as
adjusting items are detailed in note 4.
Management applies judgement
in determining which items should
be excluded from Adjusted EBITDA.
The considerations factored into this
judgement include, but are not limited to:
– nature of the item;
– significance of the item on the financial
results; and
– management's expectation on the
recurring or non-recurring nature of
the item.
These are items which are material in
nature and include, but are not limited to,
costs relating to acquisitions, disposals
and significant events or projects, some of
which span multiple years.
Although categories of Adjusted items
may appear across multiple periods,
the underlying event driving that cost or
income is often non-recurring.
These items are excluded from adjusted
EBITDA as management believe their
inclusion distorts the underlying trading
performance. This is consistent with
the way that financial performance is
measured by management and reported
to the Board. For further details, refer to
note 4.
e. Share-based payments
The Group operates share-based
compensation plans, under which the
Group receives services from employees
as consideration for equity instruments
(options) of the Company. The fair value
of the employee services received
in exchange for the grant of equity
instruments is recognised as an expense
in the statement of comprehensive
income. The cost of the equity-settled
transaction is measured at the fair value
on the date the awards were granted.
In the instance that the awards need
to be valued, an appropriate valuation
model is applied. The total expense is
recognised over the vesting period, which
is the period over which all the specified
vesting conditions are to be satisfied.
At the end of each reporting period, the
Group revises its estimates of the number
of equity instruments that are expected
to vest based on the non-market vesting
conditions along with taking account
of any equity instruments that may
have been cancelled or modified in the
period. It recognises the impact of the
revision to original estimates, if any, in the
statement of comprehensive income with
a corresponding adjustment to equity.
The shares issued under the Group’s
share schemes are held by an Employee
Benefit Trust (“EBT”), with the beneficial
interest in the shares being held jointly
by the EBT and the individual participant
until the shares vest. The EBT has been
consolidated within the Group’s financial
statements.
f. Intangible assets
Goodwill
Goodwill represents the excess of the
cost of acquisitions over the Group’s
interest in the fair value of the identifiable
assets and liabilities (including intangible
assets) of the acquired entity at the date
of acquisition. Goodwill is recognised
as an asset and assessed for any
indications of impairment at least
annually. Any impairment is recognised
immediately in the statement of
comprehensive income.
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Financial Statements
n. Leases
The Group assesses at contract inception
whether a contract is, or contains, a
lease. That is, if the contract conveys the
right to control the use of an identified
asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition
and measurement approach for all
leases, except for short-term leases and
leases of low-value assets. The Group
recognises lease liabilities to make
lease payments and right-of-use
assets representing the right to use
the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets
at the commencement date of the lease
(i.e. the date the underlying asset is
available for use). Right-of-use assets are
measured at cost, less any accumulated
depreciation and impairment losses, and
adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets
includes the amount of lease liabilities
recognised, initial direct costs incurred
and lease payments made at or before
the commencement date, less any lease
incentives received.
Right-of-use assets are depreciated on a
straight-line basis over the shorter of the
lease term and the estimated useful lives
of the assets, as follows:
Plant and machinery
1-6 years
Motor vehicles
3-6 years
Buildings
1-28 years
Lease liabilities
At the commencement date of the lease,
the Group recognises lease liabilities
measured at the present value of lease
payments to be made over the lease
term. The lease payments include fixed
payments (including in-substance fixed
payments) less any lease incentives
receivable, variable lease payments
that depend on an index or a rate and
amounts expected to be paid under
residual value guarantees. The lease
payments also include the exercise
price of a purchase option reasonably
certain to be exercised by the Group and
payments of penalties for terminating the
lease, if the lease term reflects the Group
exercising the option to terminate.
In calculating the present value of
lease payments, the Group uses its
incremental borrowing rate at the
lease commencement date because
the interest rate implicit in the lease
is not readily determinable. After the
commencement date, the amount of
lease liabilities is increased to reflect
the accretion of interest and reduced for
the lease payments made. In addition,
the carrying amount of lease liabilities
is remeasured if there is a modification,
a change in the lease term, a change
in the lease payments (e.g. changes to
future payments resulting from a change
in an index or rate used to determine
such lease payments) or a change in the
assessment of an option to purchase the
underlying asset.
The Group’s lease liabilities are included
in interest-bearing loans and borrowings.
Short-term leases and leases of
low‑value assets
The Group applies the short-term lease
recognition exemption to its short-term
leases (i.e. those leases that have a
lease term of 12 months or less from the
commencement date and do not contain
a purchase option). It also applies the
lease of low-value assets recognition
exemption to leases that are considered
to be low value. Lease payments on
short-term leases and leases of low‑value
assets are recognised as an expense on a
straight‑line basis over the lease term.
Group as a lessor
Leases in which the Group does not
transfer substantially all the risks and
rewards incidental to ownership of an
asset are classified as operating leases.
Rental income arising is accounted for
on a straight-line basis over the lease
terms and is included in revenue in
the statement of profit or loss due to
its operating nature. Initial direct costs
incurred in negotiating and arranging
an operating lease are added to the
carrying amount of the leased asset and
recognised over the lease term on the
same basis as rental income. Contingent
rents are recognised as revenue in the
period in which they are earned.
Sale and leaseback accounting
The Group applies sale and leaseback
accounting in accordance with IFRS
16 Leases. Specifically, the Group
recognises the gain or loss on the
sale and leaseback transaction by
recognising the proportion relating to
rights transferred to the buyer directly
to the income statement.
Dilapidations provisions
Dilapidations provisions relate to leased
properties. Dilapidations provisions are
made based on the best estimate of
the likely committed cash outflow and
discounted to net present value. The
provision, when recognised, increases
the right-of-use asset. Dilapidations
provisions are expected to be used at or
by the end of the lease term.
o. Taxation
The tax expense included in the statement
of comprehensive income and statement
of changes in equity comprises current
and deferred tax.
Current tax is the expected tax payable
based on the taxable profit for the period
and the tax laws that have been enacted
or substantively enacted by the reporting
date. Management periodically evaluates
positions taken in tax returns with respect
to situations in which applicable tax
regulation is subject to interpretation. It
establishes provisions where appropriate,
based on amounts expected to be paid to
the tax authorities. Current and deferred
tax is charged or credited in the statement
of comprehensive income, except when
it relates to items charged or credited
directly to equity, in which case the current
or deferred tax is also recognised directly
in equity.
Deferred tax is recognised on differences
between the carrying amounts of assets
and liabilities in the financial statements
and the corresponding tax bases used in
the computation of taxable profit and is
accounted for using the balance sheet
liability method. Deferred tax liabilities
are generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent that
it is probable that taxable profits will
be available against which deductible
temporary differences can be utilised.
Such assets and liabilities are not
recognised if the temporary difference
arises from goodwill or from the initial
recognition (other than in a business
combination) of other assets and liabilities
in a transaction that affects neither the
tax profit nor the accounting profit. The
carrying amount of deferred tax assets
is reviewed at each reporting date. The
business combinations in previous years
have given rise to deferred tax liabilities, as
a result deferred tax assets are recognised
to the extent they offset the corresponding
liability. Deferred tax is calculated at the
tax rates (and laws) that are expected to
apply in the period when the liability is
settled, or the asset is realised.
1. Accounting policies
continued
k. Financial instruments
The following are deemed to be financial
assets and liabilities within the scope
of IFRS 9.
Derivative financial instruments
The Group uses derivative financial
instruments, such as foreign currency
and interest rate swaps, to hedge its
foreign currency and interest rate risks.
Derivative financial instruments are
recognised initially and subsequently
at fair value. The gain or loss on
remeasurement to fair value is
recognised immediately in the statement
of comprehensive income. However,
where derivatives qualify for hedge
accounting, recognition of any resultant
gain or loss depends on the nature
of the item being hedged. The sale
and purchase of derivative financial
instruments are non-speculative.
Cash flow hedges
Where a derivative financial instrument
is designated as a hedge against the
variability in cash flows of a recognised
asset or liability, or a highly probable
forecast transaction, any gain or loss
on the effective part of the derivative
financial instrument is recognised
in other comprehensive income and
accumulated within the hedging reserve.
The gain or loss on any ineffective portion
of the hedge is recognised immediately in
the statement of comprehensive income.
Hedge accounting is discontinued
when the hedging instrument no longer
meets the criteria for hedge accounting,
expires, or is sold, terminated or
exercised. The cumulative gain or loss
previously recognised in the hedging
reserve remains there until the forecast
transaction occurs. The cumulative
gain or loss in the hedging reserve
is transferred to the statement of
comprehensive income in the same
period that the hedged item affects
profit or loss.
Gain or loss on a portion of a derivative
designated as a hedging instrument
that is excluded from that hedging
relationship is captured in the cost
of hedging reserve.
Trade and other receivables
Trade and other receivables are
non-interest bearing and are initially
recognised at fair value. Subsequently
they are measured at amortised cost
using the effective interest rate method
less loss allowance. The Group measures
the loss allowance at an amount equal to
lifetime expected credit losses.
During the year, the Group entered into
a non-recourse factoring arrangement
whereby a proportion of its receivables
are sold to HSBC. The Group does not
retain ownership over the risks and
rewards associated with the receivables.
The arrangement includes an upfront
administration fee and a monthly
non‑recourse fee of 0.07% of the
aggregate balance of the receivables
in question. These amounts have
been recognised in the statement of
comprehensive income.
The non-recourse facility does not meet
the definition of loans and borrowings
under IFRS.
Cash and cash equivalents
Cash and cash equivalents comprise
cash at bank and in hand and short‑term
deposits with an original maturity of
three months or less. Cash and cash
equivalents include amounts receivable
from banks and payment providers
for credit and debit card transactions
which clear the bank shortly after the
transaction takes place.
For the purposes of the consolidated
statement of cash flows, cash and
cash equivalents consist of cash and
short-term deposits, as defined, net of
outstanding bank overdrafts.
Financial liabilities
Financial liabilities within the scope of
IFRS 9 are classified as financial liabilities
at amortised cost. The Group measures
contingent consideration liabilities at fair
value through profit and loss.
Trade and other payables
Trade and other payables are non-interest
bearing and are recognised initially at
fair value and subsequently measured
at amortised cost using the effective
interest method. Within trade and other
payables, returns recognised under IFRS
15 (representing the liability for potential
returns from customers) are captured
within accruals.
The Group has a supplier finance
arrangement in place to support the
cash flow of its external suppliers. The
participation in the arrangement is at the
suppliers' own discretion. The funding is
provided by two of the Group's relationship
banks and gives certain suppliers the
flexibility to receive early payments on
specific invoices. All early payments are
processed by the funding bank and the
Group settles the original invoice amount
with the funders at the original invoice
due date. The Group does not provide any
security to the funding bank. All trade
payables subject to the supply finance
agreement are included in trade and other
payables in the consolidated statement of
financial position and within trade payables.
Bank borrowings
Interest-bearing bank loans and
overdrafts are initially recorded at
fair value, which equals the proceeds
received, net of direct issue costs. Finance
charges, including premiums payable on
settlement or redemption and direct issue
costs, are accounted for using an effective
interest rate method and are added to
the carrying amount of the instrument to
the extent that they are not settled in the
period in which they arise.
l. Supplier income
Supplier income comprises retrospective
rebates and discounts. They are
receivable in respect of goods which
have been sold and are initially
recognised as accrued income.
The retrospective rebates are analysed
per supplier basis and accrued income is
adjusted accordingly based on quarterly
assessment of variables impacting
expected rebates. All retrospective
rebates and discounts received and
receivable are deducted from cost of
sales when the sale to the third party
has been completed.
m. Contract liabilities
A contract liability is the obligation
to transfer goods or services to a
customer for which the Group has
received consideration (or an amount of
consideration is due) from the customer.
If a customer pays consideration before
the Group transfers goods or services
to the customer, a contract liability is
recognised when the payment is made or
the payment is due (whichever is earlier).
Contract liabilities are recognised as
revenue when the Group performs under
the contract.
Notes to the consolidated financial statements continued
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Financial Statements
The key judgement relates to assessing
the feasibility and the extent of future
economic benefits that will be derived
from each project. Refer to note 11
for details of capitalised platform
development costs. The useful economic
life of the platform is between one
and ten years, dependent on the type
of development work capitalised. The
estimate of useful economic life is
reviewed on a regular basis to ensure that
this continues to be appropriate.
Demerger – classification as held for
distribution
Management has assessed whether
THG Ingenuity should be classified as
held for distribution at the reporting date.
Under IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations, an
asset must be available for immediate
distribution and the distribution must be
highly probable. The timing and certainty
of the transaction were key considerations
in concluding that the business met
the criteria to be classified as held
for distribution. Refer to note 12.2 for
management’s detailed considerations in
respect to this matter.
Key sources of estimation uncertainty
Demerger – measurement of the
disposal group and dividend liability
THG Ingenuity has been measured at the
lower of its carrying amount and fair value
less costs to distribute, in accordance with
IFRS 5. The dividend liability is measured in
accordance with IFRIC 17 at the fair value
of the assets to be distributed at the date
the distribution is approved. Determining
the appropriate valuation in line with
IFRS 13 requires judgement, including
assessing the fair value of the business
based on comparable transactions,
market conditions, and internal financial
projections. Management has considered
all relevant factors to ensure the carrying
value reflects an appropriate estimate of
its recoverable amount. Refer to note 12.2
for management’s detailed considerations
in respect to this matter.
Inventory provisioning
The Group holds levels of stock sufficient
to meet the forecasted demand of its
customers. As part of this, a provision is
recognised to ensure that the balance
sheet value of stock held is at the
lower of cost and net realisable value
in accordance with IAS 2. As part of the
provisioning process, management's
consideration includes, but is not limited
to: age of stock, type of stock, and
inventory acquired through business
combinations.
All of these positions are variable in nature
and management apply judgement in
concluding on the recoverable value and
changes to risk profiles which could have
a material impact on provisioning levels.
Refer to note 13 for further details on
inventory. A reduction of 10% in online
sales selling prices would impact the net
realisable value by c.£1m.
Impairment reviews – key estimates
and judgements
When a review for impairment is
conducted, the recoverable amount of
the CGU is determined based on the
higher of value-in-use calculations
applying IAS 36 and fair value less
costs to dispose applying IFRS 13.
The recoverable amount is calculated
using management’s assumptions and
estimates. The key estimates within the
value-in-use calculation are growth rates,
margin forecasts and discount rates
applied. Refer to note 11 for further details
of calculations.
Other judgements and other sources
of estimation uncertainty
Climate change
In preparing the consolidated financial
statements management has taken
into consideration the impact of climate
change. Considerations include, but are
not limited to:
– the identification of costs which
have been committed and which
have been included within forecasts
where appropriate including increased
plastics and waste taxes and levies;
– the impact of climate change on a
number of key estimates which the
Group has included within forecasts
where appropriate, such as:
– the cost of sourcing sustainable raw
materials;
– packaging compliance fees and
zero waste implementation costs;
– membership and consultancy costs
in respect of GHC footprint, energy
usage, TCFD compliance and UK
Plastic Pact; and
– where measurable, the impact of
consumer behaviours of sustainable
brand recognition and development,
for example shifts towards
Myvegan; and
– continued investment in sustainable
businesses, including More Trees,
Preston Plastics and Indigo
Environmental, as the Group continues
to work towards and evolve its
sustainability targets.
These considerations have not identified
any significant impacts from our climate
commitments and therefore do not
have a material impact on the financial
statements or reporting judgements and
estimates.
Other judgements and other sources
of estimation uncertainty relating
to discontinued operations only (not
expected to recur in 2025)
Revenue recognition – principal
versus agent
Judgement is required in concluding
whether the Group acts as a principal
or agent for certain external Ingenuity
contracts, with the amount of revenue
recognised depending on this conclusion.
The Group acts as principal when it
has control of the specified good or
service prior to transfer to the customer.
Where the Group acts as principal, the
revenue recorded is the gross amount
billed. Where the Group is an agent,
predominantly relating to revenue
share arrangements, revenue from the
customer and costs with suppliers are
reported on a net basis, representing the
net margin earned. Whether the Group
is acting as principal or agent depends
on management’s analysis of both legal
form and substance of the agreement
between the Group and its business
partners. Each contract is reviewed and
concluded on accordingly.
1. Accounting policies
continued
o. Taxation continued
Tax assets and liabilities are offset where
there is a legally enforceable right to
offset current tax assets against current
tax liabilities and when the deferred tax
assets and liabilities relate to income
taxes levied by the same taxation
authority on either the taxable entity or
different taxable entities and where there
is an intention to settle the balances on a
net basis.
p. Foreign currency translation
Functional and presentational
currency
Items included in the financial
statements of each of the Group’s
entities are measured using the currency
of the primary economic environment in
which the entity operates (the "functional
currency”). The consolidated financial
statements are presented in sterling,
which is also the parent company’s
functional currency.
Transactions and balances
Transactions denominated in foreign
currencies are translated into the
functional currency at the exchange rates
prevailing on the date of the transaction.
Monetary assets and liabilities
denominated in foreign currencies are
translated into the functional currency at
the exchange date. Exchange differences
on monetary items are taken to the
statement of comprehensive income.
Group companies
On consolidation, the assets and liabilities
of foreign operations are translated into
the presentational currency of the Group
at the rate of exchange prevailing at the
reporting date and their statements of
comprehensive income are translated
at exchange rates prevailing at the
dates of the transactions. The exchange
differences arising on translation for
consolidation are recognised in other
comprehensive income ("OCI").
On disposal of a foreign operation, the
component of OCI relating to that foreign
operation is recognised in the statement
of comprehensive income.
q. Government grants
Government grants are recognised where
there is reasonable assurance that the
grant will be received and all attached
conditions will be complied with. When
the grant relates to an expense item, it
is recognised as income on a systematic
basis over the periods that the related
costs, for which it is intended to
compensate, are expensed. When the
grant relates to an asset, it is recognised
as income in equal amounts over the
expected useful life of the related asset.
r. Earnings per share
Basic earnings per share ("EPS") is
calculated by dividing the profit or loss
for the year attributable to ordinary equity
holders of the parent by the weighted
average number of Ordinary Shares
outstanding during the year.
Diluted EPS is calculated by dividing
the profit or loss attributable to ordinary
equity holders of the parent by the
weighted average number of ordinary
shares outstanding during the year
plus the weighted average number of
ordinary shares that would be issued on
conversion of all the dilutive potential
ordinary shares into ordinary shares, to
the extent that the inclusion of such
shares is not anti-dilutive.
s. Dividend liability
The dividend liability is measured at the
fair value of the assets to be distributed at
the date the distribution is approved. The
liability is remeasured at each reporting
date and at the date of settlement, with
any changes in fair value recognised
directly in equity. On settlement, the
difference between the carrying amount
of the asset distributed and the amount of
the dividend liability is recognised in profit
or loss.
t. Critical accounting
judgements and key sources
of estimation uncertainty
In the application of the Group’s
accounting policies, management is
required to make judgements (other than
those involving estimations) that have
a significant impact on the amounts
recognised and to make estimates
and assumptions about the carrying
amounts of assets and liabilities that
are not readily apparent from other
sources. The estimates and associated
assumptions are based on historical
experience and other factors that are
relevant. Actual results may differ from
these estimates.
The estimates and underlying
assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates
are recognised in the period in which the
estimate is revised if the revision affects
only that period, or in the period of the
revision and future periods if the revision
affects both current and future periods.
The most critical accounting judgements
or key sources of estimation uncertainty
are detailed below.
However, certain judgements and
sources of estimation uncertainty relate
specifically to discontinued operations and
will not be considered critical accounting
judgements and sources of estimation
uncertainty in future periods. For clarity,
management has indicated where a
judgement applies solely to discontinued
operations.
Critical accounting judgements
Adjusted items
The identification of adjusted items
depends on management judgement
in identifying and quantifying amounts
deemed to be adjusting or not reflective
of the underlying performance of the
Group. The key elements management
take into consideration include, but are
not limited to:
– the underlying nature of the item;
– whether management believe the item
is recurring in nature, or if it represents
a one-off distortion of the underlying
results of the business; and
– significance of the item on the financial
results.
– Where income streams can be
segregated and reliably measured in
respect of adjusted costs, these are
disclosed accordingly.
Refer to note 4 for details of each class of
adjusted items.
Critical accounting judgements
relating to discontinued operations
only (not expected to recur in 2025)
Capitalisation and amortisation of
platform development costs
Costs capitalised as platform development
costs include direct external costs such
as consultancy costs and internal payroll
costs. The capitalisation of internal costs
is based on the amount of time spent by
employees on capital projects. Judgement
is applied in determining which costs
meet the IAS 38 criteria for capitalisation
as development costs, dependent on the
type of cost and the project, along with
the appropriate element of employee time
capitalised.
Notes to the consolidated financial statements continued
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
2023
THG
Beauty
£’000
THG
Nutrition
£’000
Central
PLC
£’000
Post
demerger
£'000
Discontinued
categories
£’000
FY 2023
Continuing
operations
£’000
External revenue
1,073,304
657,911
—
1,731,215
148,651
1,879,866
Internal revenue
—
—
—
—
—
—
Total revenue
1,073,304
657,911
—
1,731,215
148,651
1,879,866
Adjusted EBITDA
44,086
88,929
(21,757)
111,258
(8,143)
103,115
Margin %
4.1%
13.5%
—
6.4%
(5.5%)
5.5%
Depreciation
—
—
—
—
—
(24,059)
Amortisation
—
—
—
—
—
(69,958)
Share-based payments
—
—
—
—
—
(16,723)
Adjusted items
—
—
—
—
—
(31,607)
Operating loss
—
—
—
—
—
(39,232)
Finance income
—
—
—
—
—
12,878
Finance costs
—
—
—
—
—
(65,898)
Loss before taxation
—
—
—
—
—
(92,252)
The segmental result for 2023 has been restated for the following:
– THG Beauty: THG Luxury was previously included in the THG Beauty segment consistent with management reporting. As it
was sold during the year, it is now reported within discontinued categories. There is no change to the previously reported total
revenue, Adjusted EBITDA, operating loss or loss before taxation.
The Group has provided an analysis of external continuing revenue by region (by destination):
2024
£’000
2023 (restated1)
£’000
UK
820,517
841,943
USA
362,874
343,052
Europe
362,489
401,910
Rest of the world
205,524
292,961
1,751,404
1,879,866
1. Restated for discontinued operations (refer to note 12.2).
The Group’s non-current assets by geography are as follows:
2024
£’000
2023
£’000
UK
624,541
1,189,386
Europe
42,270
120,459
Rest of the world
385,728
475,744
1,052,539
1,785,589
2. Segmental reporting and revenue
The Directors have assessed the criteria and considerations under IFRS 8 Operating Segments in order to identify operating
segments within the Group. For the year to 31 December 2023, the Group’s activities were divided into the following segments:
THG Beauty, THG Nutrition, THG Ingenuity and Discontinued categories.
In 2024, following successful completion of the demerger of THG Ingenuity on 2 January 2025, the THG Ingenuity segment
has been recognised in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Refer to note 12.2 for
further detail. On this basis, the Directors have concluded that for 2024, the Group has three operating segments: THG Beauty,
THG Nutrition and Discontinued categories. The prior year segmental analysis has been re-presented to provide a like-for-like
comparison.
The following table describes the main activities for each reportable operating segment:
Segment
Activities
THG Beauty
A digital-first brand owner, retailer and manufacturer in the prestige beauty market, with a portfolio of own brands
across skincare, haircare and cosmetics. Through its retail websites, including Lookfantastic, Dermstore and Cult
Beauty, it is a route to market globally for third-party premium brands.
THG Nutrition
A group of digital-first nutrition brands, which includes the world's largest online sports nutrition brand Myprotein
and its family of brands (Myvegan, Myvitamins, MP Activewear and MyPRO), with a vertically integrated business
model supported by global THG production facilities.
Discontinued
categories
Discontinued categories are, as previously reported, certain loss-making categories and territories within THG
Beauty and THG Nutrition which following the ongoing strategic review, has led to the successful exit. These exits
do not meet the criteria under IFRS 5 Discontinued Operations at the balance sheet date, as these categories and
territories are not a major component of the Group as defined by the accounting standard; however, management
report the financial results of these categories separately in their reporting to the chief operating decision-maker
("CODM"); as such, the result has also been shown in the same format within this note.
Central costs relate primarily to the PLC Board remuneration, professional services fees, Group finance, M&A, risk (insurance) and
governance costs that are not recharged to the divisions as they principally relate to the operations of the PLC holding company.
The CODM is the executive Board directors, who make key operating decisions for the business. The CODM receives daily
financial information at the combined Group level, along with monthly information at a business level, and uses this information
to allocate resources, make operating decisions and monitor the performance of each of the businesses.
The measure of the Group’s profit or loss used by THG’s management team is Adjusted EBITDA comprising operating loss
adjusted for interest, tax, depreciation, amortisation, shared-based payments and adjusted items. This is reconciled to the nearest
IFRS measure (loss before tax) in the below table.
2024
THG
Beauty
£’000
THG
Nutrition
£’000
Central
PLC
£’000
Post
demerger
£’000
Discontinued
categories
£’000
FY 2024
Continuing
operations
£’000
External revenue
1,108,497
579,780
—
1,688,277
63,127
1,751,404
Internal revenue
—
—
—
—
—
—
Total revenue
1,108,497
579,780
—
1,688,277
63,127
1,751,404
Adjusted EBITDA
79,785
34,538
(22,237)
92,086
(8,739)
83,347
Margin %
7.2%
6.0%
—
5.5%
(13.8%)
4.8%
Depreciation
—
—
—
—
—
(24,824)
Amortisation
—
—
—
—
—
(65,386)
Share-based payments
—
—
—
—
—
(16,579)
Adjusted items
—
—
—
—
—
(124,453)
Operating loss
—
—
—
—
—
(147,895)
Finance income
—
—
—
—
—
9,049
Finance costs
—
—
—
—
—
(63,554)
Loss before taxation
—
—
—
—
—
(202,400)
Segment assets and liabilities are not disclosed because they are not regularly reported or reviewed by the Board.
Notes to the consolidated financial statements continued
154
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Loss on disposal of discontinued
and the exiting of loss-making
categories
Consistent with the Group’s ongoing
commitment to simplify and streamline
operations as part of the strategic review
of loss‑making categories and territories,
several actions concluded in 2024.
This includes the sale of its portfolio
of luxury goods websites (previously
THG Luxury) along with some non-core
brands and product offerings across
THG Beauty and THG Nutrition. This
has resulted in an inventory provision
adjustment within cost of sales and
asset impairments within administrative
costs to reflect the recoverable value.
These costs are deemed to be one-off
losses to enable and complete the exit
of loss-making areas of the business.
Associated income in respect of costs
arising for discontinued categories has
been set out in note 2. FY 2023 reflects
costs of the same nature following the
sale of THG OnDemand in July 2023 and
commencement of the strategic review.
Inventory provision following
strategic review and commercial
rebrand
In H2 2023, Myprotein initiated a
comprehensive global rebrand, reflecting
a pivotal change in strategy aimed at
broadening the accessibility of its products.
The Group’s commitment to sustainability,
notably reducing waste, underpinned this
phased rebrand which spanned several
months. This allowed for the trade through
of old brand packaging and drove minimal
disposal of stock. Where possible, stock
was sold through in line with this strategy;
however, for items that could not be sold,
primarily clothing, a one-off stock provision
has been recognised for discontinued or
obsolete items as part of adjusting items,
as these costs are not indicative of the
Group’s underlying trade as discounts
and marketing expenses associated
with the clearance of associated stock
would typically not be incurred and
are not expected to recur in 2025.
The comparative position reflects the
strategic review in 2023 for THG Beauty
manufacturing, where efficiencies were
identified that would support long‑term
cost savings. Consistent with this, a
one-off provision was recognised in the
prior year in respect of inventory that is
no longer required to drive forward the
operations.
Transportation, delivery and
fulfilment costs
The conflict in Israel has resulted in
pressures across the international
network and travel routes, with increased
costs being experienced as the war
continues, which are not fully passed
on to customers. The Group continues
to insulate the customer from the full
impact of these rising costs, with the
residual expense therefore being over
and above those incurred through
the normal course of business. The
Group was severely impacted by high
surcharges from suppliers in respect of
travel routes travelling through and into
Asia during the Covid-19 pandemic and
extended lockdown periods. The supplier
surcharge has not recurred in 2024.
Commissioning – new facilities
Consistent with its strategic priorities,
including warehouse optimisation, the
Group completed the commissioning of
its campus at Manchester Airport, UK
(“Icon”) in 2023. The warehouse is now
fully operational and no further costs
were incurred in 2024.
Loss on property portfolio
restructure
Following a Group review of properties
held within its portfolio, leased
properties no longer in use have been
sold or repurposed. Where vacated
properties are retained, unavoidable
costs relating to these sites are incurred
over the remaining life of the lease
and will continue to be classified as
adjusted items.
Other costs following the
outcome of strategic review
As part of the strategic review the Group
has consolidated acquired warehouses
into the existing THG network. The
costs that have been incurred as part of
this process include costs associated
with the dual running of facilities and
other third-party costs such as rent
and utilities. All costs recognised within
adjusted items are from the point of
management’s decision to exit the
acquired warehouse. These costs are
considered to be one-off costs and are
incremental to the ongoing trading of the
Group. The majority of these costs have
now been incurred.
Restructuring costs
Consistent with the strategic review, the
Group continues to explore and implement
corporate restructuring and evolve its
internal operations where sustainable
alternatives are identified. The costs
incurred are attributable to employee-
related severance as part of specific
operational restructuring projects as
efficiencies are implemented across the
business. During 2024, given the nature of
the programmes, additional costs in respect
of salary costs for employees within
consultation periods and dual running costs
were also included within adjusted items.
The costs of the restructuring programme
were offset by the annualised saving within
6 months. These projects, and the costs
attached, are expected to be completed
within a 12‑month period.
Acquisitions – restructuring and
integration
Costs incurred relate to the integration of
Biossance into the existing THG network
which was acquired in December 2023.
The nature of these costs is consistent
with those set out under other costs
following the outcome of strategic review
but have been incurred from the point
of initial acquisition. Given the nature of
these costs, it is not unusual for these to
span more than one accounting period
depending on the date of acquisition and
the time required for the integration to be
completed. It is expected that the costs
will reduce in 2025.
Onerous contracts
The Group entered into a sponsorship
agreement in 2023 with Williams racing
which has not delivered the expected
commercial returns, as such, this has been
identified as an onerous contract. Under
the terms of the sponsorship agreement,
the Group is contractually obligated
to incur annual fees and termination
costs. Notice of termination has been
provided, and the contract will be exited
at the earliest available opportunity;
31 December 2025. The total cost
recognised within adjusting items includes
the costs incurred from 1 January 2024
plus any unavoidable committed costs to
31 December 2025.
Additionally, the unavoidable costs
committed to an aborted implementation
of a Human Resources enterprise reporting
platform (ERP) have also been recognised
as an onerous contract. The Group
classifies these expenses as adjusted
items, as they do not represent costs
incurred in the normal course of business.
3. Operating loss
Note
2024
£’000
2023 (restated1)
£’000
Operating loss has been arrived at after charging/(crediting):
Adjusted items – cash
4
24,547
10,445
Adjusted items – non-cash
4
42,440
21,162
Adjusted items – non-cash impairment
4
57,466
—
Employee costs
6
142,253
123,770
Share-based payments
7
16,579
16,723
Depreciation on fixed assets
12.1
13,092
14,258
Depreciation on right-of-use assets
22
11,732
9,801
Amortisation
11
19,880
21,005
Amortisation of acquired intangibles
11
45,506
48,953
Net foreign exchange (gain)/loss
(37)
(201)
1. Restated for discontinued operations (refer to note 12.2).
4. Adjusted items
These are items which are material in nature and include, but are not limited to, costs relating to acquisitions, disposals and
significant events or programmes, some of which span multiple years. These items are excluded from Adjusted EBITDA as
management believe their inclusion distorts the underlying trading performance. This is consistent with the way that financial
performance is measured by management and reported to the Board.
2024
£’000
2023 (restated1)
£’000
Within cost of sales
Loss on disposal of discontinued and the exiting of loss-making categories
24,742
10,465
Inventory provision following strategic review and commercial rebrand
8,820
4,786
33,562
15,251
Within distribution costs
Transportation, delivery and fulfilment costs
1,268
1,846
Commissioning – new facilities
—
342
1,268
2,188
Within administrative costs
Impairment of assets – THG Experience
14,854
—
Impairment of assets – discontinued categories
57,466
—
Loss on property portfolio restructure
528
6,788
Loss on disposal of (or exit from) discontinued and loss-making categories
259
4,498
Other costs following the outcome of strategic review
172
152
Restructuring costs
5,582
2,184
Acquisitions – restructuring and integration
3,047
346
Onerous contracts
7,075
—
Other legal and professional costs
640
200
89,623
14,168
Total adjusted items before tax
124,453
31,607
Tax impact
(5,095)
(1,868)
Total adjusted items
119,358
29,739
Cash adjusting items before tax2
24,547
10,445
1. Restated for discontinued operations (refer to note 12.2).
2. Cash adjusting items before tax total £24.5m (2023: £10.5m) reflecting the total cash before tax expected to be paid.
Impairment of assets – THG Experience
The decision to pause refurbishment work on an asset within THG Experience has led to an impairment charge in the year of
£14.9m, this also includes the expected cost of returning the property at the end of the term, More information is included within
note 11.
Impairment of assets – discontinued categories
Following the decision to discontinue certain beauty brands an impairment has been charged totalling £57.5m against affected
assets. More information is included within note 11.
Notes to the consolidated financial statements continued
156
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
The average number of employees (including Executive Directors) during the year was:
2024
Number
2023
Number
Retail
1,593
2,108
Administration
1,655
1,483
Distribution
3,056
3,465
Information technology
823
908
Total
7,127
7,964
Continuing operations (Restated)
3,140
3,384
Discontinued operations (Restated)
3,987
4,580
The above table reflects the full-time equivalent ("FTE") number of employees calculated as an average throughout the year.
The total staff numbers on an actual basis at 1 January 2024 were 7,291 and at 31 December 2024 were 6,797.
7. Share-based payments
Overview
The Group operates a share-based compensation plan, under which the Group receives services from employees as consideration
for equity instruments (options) of the Company. The fair value of the employee services received in exchange for the grant of
the equity instruments is recognised as an expense in the Statement of Comprehensive Income with the corresponding increase
to equity.
Previously issued plans
Senior leadership plan
Under the senior leadership plan (SLT Plan), share options of the parent are granted to senior executives of the Company,
including members of key management personnel. The awards vest in three equal tranches, annually on 31 December over the
three years from grant date. Performance conditions and targets linked to ESG are attached to a small proportion of the awards
to a small number of participants. The fair value of the share options is the market price of the underlying shares on the grant
date. There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these options.
The Group accounts for the SLT as an equity-settled plan.
Employee plan
Under the employee plan, the Group, at its discretion, may grant share options of the parent to employees other than senior
executives. The option awards will vest in three equal tranches annually on 31 December over the three years from grant date,
provided participants remain in continued employments with the Company at each date. A small number of shares vested in full
on 31 December following issue. The fair value of the share options is the market price of the underlying shares on the grant date.
The contractual term of the share options is three years and there are no cash settlement alternatives for the employees.
The Group does not have a past practice of cash settlement for these awards. The Group accounts for the employee plan as an
equity‑settled plan.
Plans issued in the year
A total of 33,574,120 shares were issued in the 12 months to 31 December 2024. The shares issued during the year are as follows:
– On 7 March 2024 a total of 3,685,598 options were granted with 737,120 of these shares only vesting if targets linked to ESG
are met. The remainder of the shares vest in three equal tranches and are subject to performance based targets.
– On 15 March 2024 a total of 22,146,794 options were granted. The vesting conditions are as follows:
– 20,376,943 awards that vest in three equal tranches, with the first being 31 December following the date of grant.
The second and third tranches for each separate grant will vest on 31 December in the following two years respectively;
– 1,680,852 awards, 560,284 of which vested on grant date, with the second tranche vesting on 31 December 2024. The third
tranche will vest on 31 December 2025;
– 88,999 awards that vested on 31 December 2024.
– On 1 August 2024 a total of 3,653,846 options were granted with 730,769 of these shares only vesting if targets linked to ESG
are met. The vesting criteria is the same as that of the shares issued on 7 March 2024.
– On 30 August a total of 4,087,882 options were granted. The vesting conditions are as follows:
– 2,196,973 awards with 137,311 of these shares only vesting if targets linked to ESG are met. The remainder of the shares vest
in three equal tranches and are subject to performance based targets.
– 1,890,909 awards with 1/24th vesting at the end of each month from September 2024.
4. Adjusted items continued
Other legal and professional costs
The Group incurs legal and professional costs that are non-recurring, one-off in nature and not related to trading activities. These costs
are included as adjusted items and can include, but are not limited to, legal costs for one-off matters and other fees associated with
investor activities. The legal and professional costs incurred during 2024 relate to the transfer to the ESCC category of the Official List.
5. Auditor's remuneration
2024
£’000
2023
£’000
Fees in respect of the audit of the consolidated and parent company financial statements
2,300
2,300
Total audit fees
2,300
2,300
Other services:
– other assurance services1
280
480
Total non-audit services
280
480
Total fees
2,580
2,780
1. Fees in respect of other assurance services relate to interim procedures in accordance with International Standard for Review Engagements (UK and Ireland)
2410 and other assurance procedures.
6. Employee costs and Directors’ remuneration
Note
2024
£’000
2023
£’000
Wages and salaries
273,925
259,955
Social security costs
31,854
29,525
Pension costs
12,621
10,728
Share-based payments
7
16,579
16,723
Total
334,979
316,931
Continuing operations (restated)1
160,965
142,641
Discontinued operations (restated)1
174,014
174,290
1. Restated for discontinued operations (refer to note 12.2).
The aggregate amount of employee costs included above that have been capitalised within platform development costs was
£47.6m (2023: £46.8m).
The costs incurred in respect of the Executive Directors and Non-Executive Directors, who are regarded as the key management
personnel, were as follows:
2024
£’000
2023
£’000
Wages and salaries
2,610
1,786
Social security costs
248
267
Pension costs
2
2
Total
2,860
2,055
Continuing operations (restated)1
2,348
1,532
Discontinued operations (restated)1
512
523
1. Restated for discontinued operations (refer to note 12.2).
No retirement benefits are accruing to any of the Directors at 31 December 2024 (2023: £nil).
Notes to the consolidated financial statements continued
158
159
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Financial Statements
The difference between the tax as charged in the consolidated statement of profit or loss and tax at the UK standard rate is
reconciled below:
2024
£’000
2023 (restated1)
£’000
Loss before taxation from continuing operations
(202,400)
(92,252)
Loss before taxation from discontinued operations
(120,840)
(159,712)
Loss before taxation
(323,240)
(251,964)
Tax at statutory rate of 25.0% (2023: 23.5%)
(80,810)
(59,212)
Tax effects of:
Adjustments in respect of prior year
(353)
452
Expenses not deductible
17,011
24,906
Income not taxable
—
(11,745)
Recognised previously unrecognised deferred tax asset
(3,700)
—
Effect of overseas tax rates
650
(682)
Write down of previously recognised deferred tax asset
26,429
—
Amounts not recognised
40,251
40,907
Change in recognition of share scheme attributes
3,422
—
Effect of change in tax rate
—
1,782
Total income tax expense/(credit)
2,900
(3,592)
Total income tax (credit)/expense – continuing operations
(21,867)
15,710
Total income tax expense/(credit) – discontinued operations
24,767
(19,302)
1. Restated for discontinued operations (refer to note 12.2).
The main rate of corporation tax in the UK is 25.0%, as this is the rate of UK corporation tax with effect from 1 April 2023.
The effective tax rate of -0.9% (2023: 1.4%) differs from the average statutory rate of 25.0%. This is primarily due to a movement in
deferred tax not recognised and expenses not deductible.
A portion of the previously recognised deferred tax asset has been reversed. This is primarily as a result of most of the taxable
temporary differences staying with the continuing operations whereas a significant portion of the deductible temporary
differences is included within discontinued operations. This changed the overall deferred tax asset recognition profile and reduced
the amount of deferred tax asset that could be supported in the discontinued operations.
In addition to the write off of previously unrecognised deferred tax assets, an additional amount has become able to be
recognised in continuing operations. Similarly, this is related to the change in the recognition profile as a result of the split of the
business into the two separate groups. This is split across deferred tax on losses and the corporate interest restriction in the
continuing operations.
In addition, there are amounts not recognised of £40.3m relating to additional tax losses arising in the period across both
continuing operations and discontinuing operations, with limited additional taxable temporary differences being generated.
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. The
legislation was effective for the Group’s financial year beginning 1 January 2024.
The Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. This assessment is based
on the most recent information available regarding the financial performance of the constituent entities in the Group. Based on
the assessment performed, all jurisdictions should meet the Country-by-Country Safe Harbour provisions and management is not
currently aware of any circumstances under which this might change. Therefore, the Group does not expect a potential exposure
to Pillar Two top-up taxes in any jurisdiction reviewed through this assessment.
10. Business combinations
2024 Business combinations
No business combinations occurred during the current year.
2023 Business combinations
The 2023 business combinations relate to the acquisition of the trade and assets of London’s City AM newspaper and the
intellectual property and assets of US beauty brand Biossance on 26 July 2023 and 28 December 2023 respectively. The details
are set out in the 2023 Annual Report.
7. Share-based payments continued
2024
£’000
2023
£’000
Expense arising from equity-settled share-based payment transactions
16,579
16,723
The following table shows the shares granted and outstanding at the beginning and end of the year:
2024
Number of
shares
2024
Weighted
average
exercise price
2023
Number of
shares
2023
Weighted
average
exercise price
As at 1 January
68,718,060
£0.04
41,796,012
£0.06
Granted during the year
33,574,120
£0.02
35,529,824
£0.01
Forfeited during the year
(3,854,758)
£0.00
(5,324,678)
£0.00
Exercised during the year
(9,982,528)
£0.00
(3,283,098)
£0.00
As at 31 December
88,454,894
£0.04
68,718,060
£0.03
Exercisable as at 31 December
6,072,570
£0.00
19,975,803
£0.00
The key inputs to calculate the charge are the share price at the date of grant and an assumption around those not remaining in
continued employment, spread across the vesting period. Achievement of performance conditions has been considered where
appropriate. The range of exercise prices are £0.00 to £0.16, and the weighted average remaining contractual life is 8.3 years.
The weighted average share price at date of exercise of shares exercised during the year was £0.60.
8. Finance income and cost
2024
£’000
2023 (restated1)
£’000
Finance income
Bank interest receivable
9,049
12,878
Finance costs
Bank interest payable and charges
61,968
64,672
Interest on lease liabilities
1,586
1,226
63,554
65,898
1. Restated for discontinued operations (refer to Note 12.2).
9. Income tax
The tax (credit)/charge for the year on continuing operations comprises:
Note
2024
£’000
2023 (restated1)
£’000
Current tax
Tax charge for the year
2,659
15,170
Adjustments in respect of prior year
1,230
6,808
3,889
21,978
Deferred tax
Origination and reversal of temporary differences
(22,022)
589
Adjustments in respect of prior year
(3,734)
(8,645)
Change in tax rates
—
1,788
21
(25,756)
(6,268)
Total income tax (credit)/charge
(21,867)
15,710
1. Restated for discontinued operations (refer to note 12.2).
Notes to the consolidated financial statements continued
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Financial Statements
11. Intangible assets
Goodwill
£’000
Platform
development
costs
£’000
Intellectual
property
£’000
Brands
£’000
New product
development
£’000
Total
£’000
Cost or valuation
At 1 January 2023
790,977
268,249
223,972
640,756
13,213
1,937,167
Transfers
—
—
(1,627)
103
1,524
—
Additions
—
60,775
19,988
83
798
81,644
Business combinations
2,318
—
1,816
4,329
—
8,463
Currency translation
(18,901)
(199)
(8,730)
(17,606)
(8)
(45,444)
Disposals
(1,175)
(31,226)
(24,078)
(376)
(310)
(57,165)
At 31 December 2023
773,219
297,599
211,341
627,289
15,217
1,924,665
At 1 January 2024
773,219
297,599
211,341
627,289
15,217
1,924,665
Transfers
—
(1,278)
137
—
528
(613)
Additions
—
50,046
14,474
591
3,043
68,154
Currency translation
1,266
19
1,663
1,941
(12)
4,877
Disposals
(439)
(18,285)
(21,119)
(1,499)
(15)
(41,357)
Transfers to assets held for distribution
(86,896)
(324,782)
(33,343)
(14,913)
(4,893)
(464,827)
At 31 December 2024
687,150
3,319
173,153
613,409
13,868
1,490,899
Accumulated amortisation
At 1 January 2023
304,632
168,332
95,323
87,953
5,165
661,405
Transfers
—
97
(130)
33
—
—
Amortisation
—
38,520
26,893
52,474
1,485
119,372
Impairment loss
—
240
—
—
—
240
Currency translation
(1,651)
766
(5,418)
(2,437)
(2)
(8,742)
Disposals
—
(30,853)
(23,468)
(362)
(310)
(54,993)
At 31 December 2023
302,981
177,102
93,200
137,661
6,338
717,282
At 1 January 2024
302,981
177,102
93,200
137,661
6,338
717,282
Amortisation
—
43,725
29,555
36,661
2,558
112,499
Currency translation
392
(4)
1,086
370
(14)
1,830
Reclassification
—
—
15,468
(15,468)
—
—
Disposals
(428)
(17,684)
(19,762)
(2,099)
(15)
(39,988)
Impairment loss (net)
40,521
—
—
15,770
—
56,291
Transfers to assets held for distribution
(85,483)
(199,925)
(24,620)
(3,235)
(2,074)
(315,337)
At 31 December 2024
257,983
3,214
94,927
169,660
6,793
532,577
Net book value
At 1 January 2023
486,345
99,917
128,649
552,803
8,048
1,275,762
At 31 December 2023
470,238
120,497
118,141
489,628
8,879
1,207,383
At 31 December 2024
429,167
105
78,226
443,749
7,075
958,322
The reclassification line relates to the reclass of amortisation charges between appropriate intangible asset categories.
Consideration of impairment of goodwill and intangible assets
Goodwill and intangible assets that have an indefinite life are subject to annual impairment testing, or more frequently if there are
indications of impairment. Intangible assets and goodwill are reviewed by assessing the appropriate cash-generating units (CGUs)
annually, which are identified based on the smallest identifiable group of assets that generate cash inflows largely independently.
As at 31 December 2024, the continuing operations consisted of four (2023: four) CGUs within THG, being THG Beauty and THG
Nutrition, discontinued categories and certain assets of THG Experience. THG Luxury was sold during the year and therefore is no
longer a CGU. Goodwill has arisen from previous business combinations across the Group and is allocated to the CGUs that are
expected to benefit from synergies of those acquisitions. The recoverable amounts of these CGUs are the higher of fair value less
costs to dispose ("FVLCTD") and value-in-use ("VIU").
Management has reviewed each CGU in turn and has adopted the VIU approach for THG Beauty, THG Nutrition and THG
Experience. For discontinued categories, this includes beauty brands previously allocated to the THG Beauty CGU which have
discontinued in the year. Given the trade has ceased for these brands, the associated assets have been written down to nil.
THG Beauty – Goodwill totalling £296.5m (2023: £296.5m)
For THG Beauty, management has estimated a VIU using a discounted cash flow method. This method was adopted during
2023 and has been applied consistently during the current year.
The key assumptions made are as follows:
Key assumption
Discount rate
The post-tax discount rate used is 9.5% (pre-tax rate 12.7%).
Forecast cash
flows
Forecasts are based on assumptions from the Board-approved budget with projections covering a five-year
period. The key assumptions within the cash flow forecasts are the future revenue growth and EBITDA margin.
The projections are based on the best estimate of future cash flows, taking into account externally available
expectations that the beauty and online markets will continue to grow at a medium single-digit rate. During the
year, THG Beauty has outperformed forecast EBITDA margins and therefore, coupled with the shift in strategy
and the medium-term growth outlook for the prestige beauty market, the Directors believe the forecasts are both
reasonable and consistent.
Long-term
growth rate
A long-term growth rate of 3.0% was used for cash flows after the five-year period which is based on long-term
growth rate across the beauty market.
No impairment has been recognised in respect of THG Beauty.
Management has performed sensitivity analysis on the key assumptions in the impairment model using reasonably possible
changes in these assumptions. There are possible downside risks across the five year forecast period including if there was
a 5.0% reduction in revenue per annum this would lead to a reduction in headroom of £75m; an EBITDA margin reduction of
50bps per annum, £90m; and an increase in discount rate of 1.0%, £45m. Mitigations to these scenarios include; refinements to
the operating model to optimise margins and cash generation, improved control surrounding capex spend, and a further focus
on higher margin more profitable sales. The model is not sensitive to reasonably possible changes in assumptions in isolation,
however, management consider that a combination of reducing revenue by 5.0% per annum and EBITDA by 50bps per annum
into perpetuity would eliminate headroom. The aforementioned scenario does not reflect the potential mitigations including cost
reduction and margin enhancement.
THG Nutrition – Goodwill totalling £132.7m (2023: £132.1m)
The key assumptions used within the VIU calculation are:
Key assumption
Discount rate
The post-tax discount rate used is 8.1% (pre-tax rate 10.8%).
Forecast cash
flows
The VIU calculation uses cash flow projections from financial budgets approved by the Board covering a five-year
period. The key assumptions within the forecasts are the future revenue growth and EBITDA margin and are in line
with market-wide forecast growth projections.
Long-term
growth rate
A long-term growth rate of 3.0% was used for cash flows after the five-year period which is based on the
long‑term growth rate across sports and nutrition retailing.
No impairment has been recognised in respect of THG Nutrition.
Management has performed sensitivity analysis on the key assumptions in the impairment model using reasonably possible
changes in these assumptions. The model is not sensitive to reasonably possible changes in these key assumptions in isolation,
however it is recognised that a change in more than one of these assumptions could result in a material change. Management
consider that a combination of reducing revenue by 36.5% and EBITDA by 46.0% per annum into perpetuity would eliminate
headroom across the five year forecast period. THG Nutrition’s historic revenue performance and the current market outlook and
projections provide reasonable, measured assurance that there is remote possibility of performance dropping by such significant
levels for the headroom to be eliminated. Management has therefore concluded that there are no reasonably possible changes in
key assumptions that would lead to an impairment.
THG Experience – Goodwill totalling £nil (2023: £nil)
As part of the demerger, some assets within THG Experience were classified within the disposal group and were demerged with
THG Ingenuity. For those assets included within the disposal group the Directors have concluded that there are no indicators of
impairment in respect of 2024 and therefore a further impairment assessment has not been undertaken.
For the remaining assets within continuing operations, it was identified that for one asset a decision had been taken in the year to
pause refurbishment work, as such, an impairment assessment was undertaken which led to an impairment charge in the year of
£14.5m in respect of right of use assets and fixtures and fittings along with the expected cost of returning the property at the end
of the term. The impairment charge has been recognised in adjusted items within the consolidated statement of comprehensive
income. Please refer to Note 4.
Notes to the consolidated financial statements continued
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Financial Statements
11. Intangible assets continued
Consideration of impairment of goodwill and intangible assets continued
Discontinued categories – Goodwill totalling £nil (after impairment of £41.7m) (2023: £41.7m)
Discontinued categories include beauty brands previously allocated to the THG Beauty CGU which have discontinued in the
year. Given the trade has ceased for these brands, the associated assets have been written down to nil. The impairment charge
of £57.5m in respect of goodwill and brands has been recognised in adjusted items within the consolidated statement of
comprehensive income. Please refer to Note 4.
12.1 Property, plant and equipment
Motor
vehicles
£’000
Plant
and machinery
£’000
Fixtures
and fittings
£’000
Computer
equipment
and software
£’000
Leasehold
improvements
and freehold
buildings
£’000
Total
£’000
Cost
At 1 January 2023
2,317
143,100
141,393
118,719
123,719
529,248
Additions
111
11,209
6,707
12,224
2,829
33,080
Business combinations
—
—
8
11
19
38
Transfers
—
5,430
(37,869)
3,009
29,430
—
Currency translation differences
—
(302)
743
(532)
(515)
(606)
Disposals
(165)
(6,474)
(4,117)
(281)
(45,875)
(56,912)
At 31 December 2023
2,263
152,963
106,865
133,150
109,607
504,848
At 1 January 2024
2,263
152,963
106,865
133,150
109,607
504,848
Additions
137
11,935
8,712
7,053
2,474
30,311
Transfers
39
1,878
(3,698)
2,289
1,041
1,549
Currency translation differences
—
(332)
(783)
142
(33)
(1,006)
Disposals
(116)
(2,349)
(1,345)
(780)
(874)
(5,464)
Transfer to assets held for distribution
(1,893)
(109,492)
(83,062)
(124,692)
(42,431)
(361,570)
At 31 December 2024
430
54,603
26,689
17,162
69,784
168,668
Accumulated depreciation
At 1 January 2023
1,587
43,103
36,399
54,881
33,237
169,207
Depreciation (note 3)
340
14,494
13,489
21,310
6,058
55,691
Impairment loss
—
1,064
987
115
10,950
13,116
Currency translation differences
—
(342)
232
(581)
(187)
(878)
Disposals
(170)
(1,949)
(51)
(257)
(3,032)
(5,459)
At 31 December 2023
1,757
56,370
51,056
75,468
47,026
231,677
At 1 January 2024
1,757
56,370
51,056
75,468
47,026
231,677
Depreciation (note 3)
178
17,857
13,984
18,134
4,155
54,308
Transfers
—
8
(8)
—
—
—
Impairment loss
—
7,328
—
—
155
7,483
Currency translation differences
—
(92)
(224)
100
(50)
(266)
Disposals
—
(2,347)
(1,212)
(780)
(494)
(4,833)
Transfer to asset held for distribution
(1,773)
(47,492)
(42,213)
(83,675)
(9,438)
(184,591)
At 31 December 2024
162
31,632
21,383
9,247
41,354
103,778
Net book value
At 1 January 2023
730
99,997
104,994
63,838
90,482
360,041
At 31 December 2023
506
96,593
55,809
57,682
62,581
273,171
At 31 December 2024
268
22,971
5,306
7,915
28,430
64,890
Transfers relate to work in progress assets that have been transferred to the relevant asset class as these became ready for use
in the current year. In 2023, disposals include the sale of non-core freehold assets which were not commensurate to the Group’s
strategic priorities and resulted in a non-recurring and non-cash loss on disposal of £17.7m in the prior year income statement.
Subsequent to the completion of the sale of the subsidiary holding one of these disposed-of properties, the Group leased the
property back, with this now sublet to a third party.
12.2 Discontinued operations
On 17 September 2024, the Group announced its intention to demerge THG Ingenuity from THG PLC into an independent private
company. Shareholder approval was obtained on 27 December 2024 and, therefore, the Group believed that it was highly
probable that the transaction would complete within 12 months from the date of the announcement. Therefore, THG Ingenuity
was classified as a disposal group held for distribution and discontinued operations from that date. Upon demerger, THG Ingenuity
included THG Experience, which had previously been reported as part of the THG Beauty segment. The demerger successfully
completed on 2 January 2025.
The results of THG Ingenuity for the year are presented below:
2024
£’000
2023
£’000
Total revenue
654,768
685,383
Internal revenue1
(462,858)
(519,871)
External revenue
191,910
165,512
Cost of sales
(142,392)
(122,595)
Gross profit
49,518
42,917
Administrative costs
(155,949)
(171,414)
Other operating expense
—
(17,664)
Operating loss
(106,431)
(146,161)
Finance income
141
451
Finance costs
(14,550)
(14,002)
Loss before taxation
(120,840)
(159,712)
Income tax (charge)/credit
(24,767)
19,302
Loss for the financial year
(145,607)
(140,410)
1. Internal revenue is eliminated at Group level in the current year but will be recognised as external revenue within THG Ingenuity from the next financial year,
following the demerger on 2 January 2025.
THG Ingenuity – Adjusted EBITDA
Notes
2024
£’000
2023
£’000
Operating loss
(106,431)
(146,161)
Adjustments for:
Amortisation
11
44,703
47,824
Amortisation of acquired intangibles
11
2,411
1,590
Depreciation
12.1, 22
68,407
71,054
Adjusted items – cash
a
19,211
5,346
Adjusted items – non-cash
a
2,736
13,674
Other operating expense – non-cash loss on disposal of freehold assets
—
17,664
Adjusted EBITDA
31,037
10,991
Notes to the consolidated financial statements continued
164
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Financial Statements
Additional Information
Financial Statements
12.2 Discontinued operations continued
a. THG Ingenuity – Adjusted items
2024
£’000
2023
£’000
Within administrative costs
Transportation, delivery and fulfilment costs
160
609
Commissioning – new facilities
273
2,263
Restructuring costs
10,694
524
Loss on property portfolio restructure
956
12,433
Loss on disposal of (or exit from) discontinued and loss-making categories
—
1,504
Other costs following the outcome of strategic review
932
1,329
Acquisitions – restructuring and integration
1,064
358
Onerous contracts
7,868
—
Total adjusted items before tax
21,947
19,020
Tax impact
(2,574)
(1,140)
Total adjusted items
19,373
17,880
Cash adjusting items before tax
19,211
5,346
Transportation, delivery and fulfilment costs
The conflict in Israel has resulted in pressures across the international network and travel routes, with increased costs being
experienced as the war continues, which are not fully passed on to customers. The Group continues to insulate the customer from
the full impact of these rising costs, with the residual expense therefore being over and above those incurred through the normal
course of business.
Commissioning – new facilities
Consistent with strategic priorities, the Group has completed its commissioning of its campus in New Jersey, US. The 2024
costs relate to the final stages of commissioning that were required to enable the warehouse to be fully operational and work at
optimised levels. No further costs are expected to be incurred.
Restructuring costs
Consistent with the strategic review, the Group continues to explore and implement corporate restructuring and evolve its internal
operations where sustainable alternatives are identified. As part of this, the costs incurred are attributable to employee‑related
severance as part of specific operational restructuring projects as efficiencies are implemented across the business. During 2024,
given the nature of the programmes, additional costs in respect of salary costs for employees within consultation periods and
dual running costs were also included within adjusted items.
Additionally, costs were incurred in executing the demerger of THG Ingenuity, which left the Group on 2 January 2025. These
projects, and the costs attached, are expected to be completed within a 12-month period.
Loss on property portfolio restructure
Following a Group review of properties held within its portfolio, leased properties no longer in use have been sold or repurposed.
Where vacated properties are retained, unavoidable costs relating to these sites are incurred over the remaining life of the lease
and will continue to be classified as adjusted items.
Loss on disposal of discontinued and the exiting of loss-making categories
The comparative position reflects adjustments following the sale of THG OnDemand in July 2023.
Other costs following the outcome of strategic review
As part of the strategic review the Group has consolidated acquired warehouses into the existing THG network. The costs that
have been incurred as part of this process, include:
– Those incurred to relocate the stock across the fulfilment network.
– Restructuring costs associated with the dual running of facilities, severance payments and other third-party costs such as rent
and utilities.
All costs recognised within adjusted items are from the point of management’s decision to exit the acquired warehouse. These
costs are considered to be one-off costs and are incremental to the ongoing trading of the Group. The majority of these costs
have now been incurred.
Acquisitions – restructuring and integration
The costs during the year relate to pre-acquisition settlement costs that arose before the acquisition of a subsidiary and has
been classified as an adjusted item as they relate to legacy matters predating the Group’s ownership. These costs are considered
non‑recurring in nature and do not form part of the Group’s underlying operating performance. The settlement was finalised in
2024 and no further related costs are expected to be incurred in 2025.
The 2023 costs are in relation to the integration of City AM that was acquired in July 2023.
Onerous contracts
The Group entered into a sponsorship agreement in 2023 with Williams racing which has not delivered the expected commercial
returns, as such, this has been identified as an onerous contract. Under the terms of the sponsorship agreement, the Group is
contractually obligated to incur annual fees and termination costs. Notice of termination has been provided, and the contract will
be exited at the earliest available opportunity; 31 December 2025. The total cost recognised within adjusting items includes the
costs incurred from 1 January 2024 plus any unavoidable committed costs to 31 December 2025.
The major classes of assets and liabilities classified as held for distribution as at 31 December are as follows:
31 December
2024
£’000
Assets
Intangible assets
149,490
Property, plant and equipment
176,979
Right-of-use assets
232,222
Investments
1,400
Deferred tax asset
2,705
Inventories
8,370
Trade and other receivables
101,924
Other financial assets
300
Cash and cash equivalents
88,979
Total assets held for distribution
762,369
Liabilities
Lease liabilities
267,929
Provisions
21,795
Deferred tax liability
503
Contract liability
12,236
Current tax liability
219
Trade and other payables
286,990
Total liabilities held for distribution
589,672
Net assets directly associated with distribution group
172,697
Amounts included in reserves directly associated with disposal group
(3,155)
The net cash flows incurred by discontinued operations were as follows:
2024
£’000
2023
£’000
Operating
18,113
(20,201)
Investing
(80,290)
(49,257)
Financing
(35,785)
(27,099)
Net cash outflow
(97,962)
(96,557)
Notes to the consolidated financial statements continued
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12.2 Discontinued operations continued
b. THG Ingenuity – Related party transactions
The amounts recognised within the major classes of assets and liabilities classified as held for distribution in relation to the
leases with Propco for discontinued operations in the year are as follows:
2024
£’000
Right-of-use asset
18,784
Lease liability
23,920
The amounts recognised within the results of THG Ingenuity in relation to the leases with Propco for discontinued operations in
the year are as follows:
2024
£’000
2023
£’000
Depreciation arising on right-of-use assets
7,117
7,780
Expense recognised in financing costs
5,274
6,145
Impairment arising on property plant and equipment
—
9,663
The table below gives further detail around the leases in place for discontinued operations:
Number of properties
Residual lease
term date
divestment
2024
rent
£’000
10
0-4 years
8,383
2
18-24 years
1,700
12
10,083
Fair value assessment of dividend liability
Under IFRIC 17 ‘Distributions of Non-cash Assets to Owners’, a liability to pay a non-cash dividend is measured at the fair value
of the assets and liabilities to be distributed when the dividend is appropriately authorised and it is no longer at the entity’s
discretion. The assets and liabilities to be distributed are the THG Ingenuity business.
The dividend liability was considered to be appropriately authorised on 27 December 2024 following shareholder approval and
has been recognised within the statement of financial position at 31 December 2024. The settlement of the dividend liability took
place on the date of the demerger on 2 January 2025.
The resulting gain on demerger will therefore be recognised within the FY 2025 financial statements. This gain is calculated
as the difference between the fair value and the book value of the attributable net assets. As this is a material, non-recurring
transaction, it will be recognised within adjusted items.
We have determined the fair value of the THG Ingenuity business by considering the requirements within IFRS 13 ‘Fair value
measurement’. We concluded that there was not an observable market price available for the stand-alone THG Ingenuity business
on the basis that it was part of a larger listed Group prior to demerger and became a private limited company post-demerger.
The uncertainties over future cashflows meant that this was best achieved by considering the underlying assets and liabilities as
a basis for then comparing to similar market transactions and valuations. Therefore, the fair value of THG Ingenuity has instead
been derived using a combination of the valuation techniques outlined in IFRS 13 being; the market approach, the cost approach
and the income approach. The measurement of the dividend liability is a level 3 fair value measurement. The material assets and
liabilities which were valued to assess the overall value of the business are as follows:
Asset/ liability
Method
Key assumptions
Hierarchy
Intangible
assets
Primarily relating to the
capitalised platform
development costs
Valued on a replacement
cost basis (using the
cost approach)
– Total hours and number of developers
to rebuild the platform
– Rates per hour
Level 3
If the total hours to or number of
developers to rebuild the platform, or the
rate per hour increased/decreased by
+5%/-5% the fair value would change by
+/- c.£17m respectively.
Asset/ liability
Method
Key assumptions
Hierarchy
Property,
plant and
equipment
Primarily relating to
fit‑out of fulfilment
centres including
specialist automation
equipment.
Valued on a market
approach
– Benchmarking of cost to similar fit outs
and specialist equipment
– Condition and location of assets
– Useful economic lives
These inputs are considered to be level 2
and level 3 hierarchy.
Level 2
Right-of-use
assets
Valued on a market
approach
– Market rents for similar properties
Different assumptions were applied for the
different classifications of assets such a
warehousing and offices.
Level 2
Working
capital
assets and
liabilities
Valued on a line by
line basis
– Recoverability of trade and other
receivables
– Net realisable value of inventories
– Completeness of trade and other
payables
– Cash and cash equivalents were
considered to be carried at their fair
value given the nature of the balance
Level 2
In determining the fair value, significant judgement exists in relation to the valuation techniques used and significant estimation
exists in relation to the key inputs into the models. Therefore, a fair value range was calculated. This range is sensitive to changes
made to the key inputs described above.
When concluding on an appropriate fair value within that range we considered the valuation derived in the context of alternative
data sources, such as relevant multiples on revenue and earnings. This resulted in the following transaction values:
£’000
Fair value of THG Ingenuity
501,331
Carrying value of net assets and liabilities held for distribution (note 12.2)
172,697
Intercompany receivable due from THG plc1
121,457
Gain to be recognised on 2 January 2025 within THG PLC
207,177
1. The carrying value of the net assets and liabilities held for distribution excludes intergroup balances that are eliminated on consolidation. The carrying value of
assets distributed as part of the THG Ingenuity business will also include £121m of intergroup receivables.
It is important to highlight that this fair value has been prepared on a different basis to the valuation of THG Ingenuity reported
in the Shareholder Circular. The valuation reported in the Board-approved Shareholder Circular was based on a pro-rata of the
market capitalisation of the listed Group, resulting in an £88 million valuation. This valuation is not an observable market price and
as such, was not in line with the requirements of IFRS 13. These two valuations are prepared on different bases and therefore are
not comparable.
13. Inventories
2024
£’000
2023
£’000
Goods held for resale
200,533
225,600
Raw materials
60,301
67,427
Goods in transit
4,537
4,116
265,371
297,143
Goods in transit relate to goods whose control is still to be transferred to the customers as of the reporting date. The cost
of inventories recognised as an expense and included in cost of sales amounted to £1,017.1m (2023: £1,015.5m). The value of
inventories written down and recognised as an expense in the statement of comprehensive income in the year was £38.5m
(2023: £20.4m) including adjusted items. Within goods held for resale is a £1.3m (2023: £2.4m) right to recover asset which
represents the carrying value of inventory expected to be received back from customers as returns.
Notes to the consolidated financial statements continued
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14. Financial assets and liabilities
Note
2024
£’000
2023
£’000
Assets as per balance sheet – financial assets
Trade and other receivables excluding non-financial assets
15
70,770
147,686
Cash and cash equivalents
16
308,622
416,162
Investments
—
1,400
Assets as per balance sheet – held at fair value through OCI
Derivative financial instruments designated as hedging instruments
5,317
9,613
Derivative financial instruments held at fair value through profit and loss
—
301
384,709
575,162
Liabilities as per balance sheet – other financial liabilities at amortised cost
Bank borrowings
18
604,567
650,037
Lease liabilities
22
41,370
344,977
Trade and other payables excluding non-financial liabilities
315,042
553,656
Liabilities as per balance sheet – other financial liabilities at fair value
Dividend liability
12.2
501,331
—
Derivative financial instruments designated as hedging instruments
58,969
19,763
1,521,279
1,568,433
Derivative financial instruments designated as hedging instruments
FX forwards hedging foreign exchange risk on borrowings
(53,020)
(19,763)
Interest rate swaps
(1,303)
7,999
FX forwards hedging foreign exchange risk on highly probable future cash flows
669
1,615
(53,652)
(10,149)
Assets and liabilities relating to THG Ingenuity are included within the balances for 31 December 2023, but have been classified
as net assets held for distribution at 31 December 2024. See note 12.2 for more information.
Financial instruments included within current assets and liabilities, excluding borrowings, are generally short-term in nature and
accordingly their fair values approximate to their book values. Bank borrowings are initially recorded at fair value net of direct
issue costs. The derivative financial instruments designated as hedging instruments have been recognised at fair value through
other comprehensive income. Hedging instruments used are measured based on observable inputs and have been classified at
Level 2 hierarchy level in line with IFRS 13 Fair Value Measurement. The dividend liability is explained further within note 12.2.
The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange,
interest rate and cash flow contracts are identical to the hedged risk components. To test the hedge effectiveness, the Group uses
the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes
in fair value of the hedged items attributable to the hedged risks. All the hedging activities and derivatives are established to be
effective. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives.
2024
Notional
Notional
Impact on
OCI1
£’000
Impact on
OCI2
£’000
Recycled
through interest
payable in the
statement of
comprehensive
income
£’000
Derivatives hedging foreign exchange risk on borrowings
€600,000,000
(1,201)
(1,600)
(36,556)
Derivatives hedging interest rate risk on borrowings
€600,000,000
6,977
9,303
(10,746)
Derivatives hedging foreign exchange risk on future cash flows
£11,577,753
709
945
(4,780)
1. Note impact on OCI is shown net of deferred tax.
2. Note impact on OCI is shown gross of deferred tax.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group regularly
forecasts cash flows and maintains an appropriate balance of cash and debt facilities to ensure that sufficient funds are available
to cover future expenses and capital expenditure. The Group held €600m notional of forward contracts expiring in December
2024 and €450m notional of interest swaps expiring in December 2026. Maturity of the Group’s derivative and non-derivative
financial liabilities are given below. The Group has a supplier finance arrangement in place to support the cash flow of its external
suppliers. The participation in the arrangement is at the suppliers' own discretion. The funding is provided by one of the Group's
relationship banks and gives certain suppliers the flexibility to receive early payments on specific invoices.
All early payments are processed by the funding bank and the Group settles the original invoice amount with the funders at the
original invoice due date. The Group does not provide any security to the funding bank. Included within trade payables is £44.8m
(2023: £43.1m) due to suppliers that participate in the Group’s supply chain financing agreement. The agreement does not change
the suppliers' agreed payment terms directly with the Group. Management doesn't consider the supplier finance agreement to
result in liquidity risk.
To further support cash flow initiatives, the group entered into a £30m non-recourse factoring arrangement during the year
whereby a proportion of its receivables are sold to HSBC. The Group does not retain ownership over the risks and rewards
associated with the receivables.
Contractual amount
Carrying
amount
£’000
Total
£’000
Less than
3 months
£’000
3 to
12 months
£’000
1 to
2 years
£’000
2 to
5 years
£’000
More than
5 years
£’000
31 December 2024:
Bank borrowings
604,567
610,339
—
112,785
497,554
—
—
Lease liabilities
41,370
68,943
3,015
7,363
10,426
29,828
18,311
Trade payables
315,042
315,042
286,041
29,001
—
—
—
Derivative financial liabilities
58,969
58,969
—
23,263
35,706
—
—
Dividend liability
501,331
501,331
501,331
—
—
—
—
31 December 2023:
Bank borrowings
650,037
657,934
—
29,026
109,000
519,908
—
Lease liabilities
344,977
557,100
11,636
33,128
44,764
134,290
333,282
Trade payables
553,656
553,656
524,387
29,269
—
—
—
Derivative financial liabilities
19,763
19,763
—
19,763
—
—
—
Undiscounted bank borrowings disclosed in the table above include variable-rated interest which is based on the level of the
index at the reporting date.
There is no material difference between the fair value and the carrying value of the bank borrowings.
Foreign currency risk
The Group trades internationally and is exposed to exchange rate risk on purchases (euro, US dollars and Polish zloty) and sales
(primarily in euro and US dollars). The Group’s results are presented in sterling and are thus exposed to exchange rate risk on
translation of foreign currency assets and liabilities.
The Group’s approach to managing foreign exchange risk is to designate cash flow hedges across a combination of forwards and
spot transactions, whose fair value is based on the observable market value of the respective instrument, taking into account
foreign exchange rates and market volatility at the balance sheet date.
The Group is also exposed to EUR:GBP exchange rate risk on a €600m loan within the Group and mitigates this risk through the
use of hedging instruments in the form of FX forward contracts. As at 31 December 2024, the Group held €600m notional of
forward contracts expiring in December 2026.
The Group’s foreign exchange exposure is predominantly euro, US dollars and Polish zloty. If the closing exchange rate was 5%
higher/lower, the Group’s statement of comprehensive income would be impacted as follows:
Change
in foreign
exchange rate
Effect on
change in
EUR rate2
£’000
Effect on
change in
USD rate3
£’000
Effect on
change in
PLN rate
£’000
2024
+5%
(215)
2,235
140
2024
-5%
237
(2,470)
652
20231
+5%
(401)
1,877
258
20231
-5%
444
(2,075)
(285)
1. Restated for discontinued operations (refer to note 12.2).
2. If the closing exchange rate was 5% higher/lower, the impact on Group equity would be £1.6m (2023: £4.1m) reflecting the impact of the derivative hedges
associated with the €600m term loan B.
3. If the closing exchange rate was 5% higher/lower, the impact on Group equity would be £32.0m (2023: £61.8m) reflecting the impact of the substantial other
intangible assets denominated in USD.
Notes to the consolidated financial statements continued
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14. Financial assets and liabilities continued
Interest rate risk
The Group is exposed to EURIBOR and SONIA through its loan facilities and has entered into a series of interest rate swap
agreements to mitigate this risk. As of 31 December 2024, the Group held €450m expiring in December 2026. Interest rate
sensitivity is summarised in note 18. The Group’s financial risks are detailed on pages 72 to 82 in this Annual Report.
Changes in liabilities arising from financing activities
The changes in liabilities arising from financing activities are presented below:
1 January
2024
£’000
Cash flows
£’000
New leases
and lease
modifications
£’000
Repayment
of bank
borrowings
£’000
Disposals
£’000
Foreign
exchange
movement
£’000
Other
£’000
31 December
2024
£’000
Borrowings
650,037
(44,954)
—
(22,000)
—
(23,959)
45,443
604,567
Lease liabilities
344,977
(47,476)
(1,914)
—
(213)
(1,942)
15,867
309,299
Total liabilities from
financing activities
995,014
(92,430)
(1,914)
(22,000)
(213)
(25,901)
61,310
913,866
1 January
2023
£’000
Cash flows
£’000
New leases
and lease
modifications
£’000
Repayment
of bank
borrowings
£’000
Foreign
exchange
movement
£’000
Other
£’000
31 December
2023
£’000
Borrowings
679,189
(47,804)
—
(25,000)
(9,133)
52,785
650,037
Lease liabilities
334,376
(49,486)
47,844
—
(2,396)
14,639
344,977
Total liabilities from
financing activities
1,013,565
(97,290)
47,844
(25,000)
(11,529)
67,424
995,014
Balances and movements in respect of the total Group are presented to allow reconciliation to the Group cash flow statement.
Of the total lease liabilities of £309.3m, an amount of £267.9m is allocated to the disposal group classified as held for distribution.
For further details, refer to note 12.2.
The ‘Other’ column includes the effect of accrued interest on interest-bearing loans and borrowings, including lease liabilities and
the effect of prepaid loan fees. The Group classifies interest paid as cash flows from financing activities.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities, primarily trade receivables. The Group monitors
and reviews exposure to credit risk on an ongoing basis and makes best efforts to ensure recoverability of amounts owed to the
Group. Information about the credit risk exposure on the Group’s trade receivables is disclosed in note 15.
15. Trade and other receivables
2024
£’000
2023
£’000
Trade receivables
34,578
110,912
Less: loss allowance
(1,122)
(2,056)
Net trade receivables
33,456
108,856
Prepayments
13,253
28,483
Accrued income
22,875
36,428
Other taxation and social security
40,374
59,185
Other receivables
37,314
38,830
147,272
271,782
Trade and other receivables are principally denominated in sterling.
Trade and other receivables relating to THG Ingenuity are included within the balances for 31 December 2023, but have been
classified as held for distribution at 31 December 2024. See note 12.2 for more information.
At 31 December 2024, there were 159,293,306 fully vested, but partly paid and unlisted Shares (31 Dec 2023: 160,392,591).
The average amount of unpaid share capital per fully vested but partly-paid and unlisted Share is £0.17 (2023: £0.17) representing
a receivable to the Group of £26.3m (2023: £26.7m). The amount is included within other receivables as this is repayable on
demand. The movement in the year is all due to certain fully vested but partly paid and unlisted Shares being paid-up and
converted to Ordinary Shares. During the year, the Group entered into a £30m non-recourse factoring arrangement whereby
receivables are sold to HSBC. The Group does not retain ownership over the risks and rewards associated with the receivables.
At 31 December 2024 the ageing of trade receivables of continuing operations was as follows:
2024
£’000
2023
£’000
Not due
23,039
68,952
0 to 3 months overdue
3,946
25,041
More than 3 months overdue
7,593
16,919
34,578
110,912
The movement in the loss allowance of trade receivables of continuing operations was as follows:
£’000
At 1 January 2024
2,056
Charge for the year
3,497
Released
(3,240)
Utilised
(27)
Foreign exchange movement
3
Transfer to asset held for distribution
(1,167)
At 31 December 2024
1,122
The Group’s credit risk exposure on trade receivables of continuing operations using a provision matrix is as follows:
Current
0-30
days
31-60
days
61-90
days
90+
days
Total
Expected credit loss rate
2.32%
2.41%
2.5%
2.58%
2.85%
Estimated total gross carrying amount
at default
23,039
881
1,637
1,428
7,593
34,578
Expected credit loss
(716)
(27)
(54)
(49)
(276)
(1,122)
At 31 December 2024
22,323
854
1,583
1,379
7,317
33,456
The Group has adopted IFRS 9 applying the simplified approach to measure the expected credit losses. This uses a lifetime
expected loss allowance for all trade receivables. No provision is required in respect of accrued income.
16. Cash and cash equivalents
2024
£’000
2023
£’000
Cash and cash equivalents
308,622
416,162
Cash and cash equivalents of £89.0m that left the Group on demerger have been classified as held for distribution at 31
December 2024. See note 12.2 for more information.
Cash and cash equivalents includes amounts receivable of £1.8m (2023: £3.5m) from banks and £9.9m (2023: £16.7m) from
payment providers, for credit and debit card transactions. Such amounts clear the bank shortly after the transaction takes place.
17. Trade and other payables
2024
£’000
2023
£’000
Trade payables
246,035
368,855
Accruals
69,007
182,922
Other taxation and social security
27,485
82,351
Government grants
—
2,343
Contingent consideration on acquisitions
—
1,879
342,527
638,350
Trade and other payables relating to THG Ingenuity are included within the balances for 31 December 2023, but have been
classified as held for distribution at 31 December 2024. See note 12.2 for more information.
Notes to the consolidated financial statements continued
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17. Trade and other payables continued
The Directors consider the carrying amount of trade and other payables approximates to their fair value when measured by
discounting cash flows at market rates of interest as at the balance sheet date. Included within trade payables is £44.8m (2023:
£43.1m) due to suppliers that participate in the Group’s supply chain financing agreement. The participation in the arrangement is
at the suppliers' own discretion. The funding is provided by one of the Group’s relationship banks and gives certain suppliers the
flexibility to receive early payments on specific invoices. Supplier finance terms are not renegotiated as part of the agreement.
All early payments are processed by the funding bank and the Group settles the original invoice amount with the funders at the
original invoice due date. The Group does not provide any security to the funding bank.
2024
£’000
2023
£’000
Carrying amount of trade payables that are part of the Group’s supplier financial arrangement
44,762
43,088
Of which suppliers have received payment
34,770
37,051
There were no significant non-cash changes in the carrying amount of the trade payables included in the Group’s supply chain
financing agreement.
18. Interest-bearing loans and borrowings
Note
2024
£’000
2023
£’000
Current
Bank borrowings
112,785
29,026
Lease liabilities
22
10,293
43,537
123,078
72,563
Non-current
Bank borrowings
491,782
621,011
Lease liabilities
22
31,077
301,440
522,859
922,451
Bank borrowings relate predominantly to the seven-year euro term loan B, undrawn five-year revolving credit facility and an
incremental facility. The revolving credit facility is provided by Barclays, HSBC, Santander, Citibank, NatWest and JPM. The
term loan B carried an interest rate of 4.50% plus EURIBOR and the revolving credit facility's interest rate is SONIA. This loan is
provided by the Group's existing lenders and carries a base rate of Daily RFR (SONIA). The floating element of the term loan B is
hedged by interest rate derivatives. Management note that EURIBOR is being reformed as a benchmark rate and are in dialogue
with its lending and hedging partners to minimise the impact on the Group as transition occurs. If interest rates moved by
100bps, the Group’s loss before tax would be c.£5.1m higher/lower (2023: c.£7.3m) and the subsequent move on the derivative
valuation would cause equity to be c.£7.3m higher/lower (2023: c.£15.5m) as a result of the same move. Post year end, the Group
refinanced its facilities. More information is included within note 29.
Net debt consists of loans and lease liabilities, less cash and cash equivalents, defined as referenced in note 22. For the purpose
of the Group’s net debt calculation, loans that are denominated in foreign currency are translated at the effective hedged rate
where applicable. Net debt is an alternative performance measure and is not defined under IFRS. A reconciliation to the most
directly comparable IFRS measure is included below:
2024
£’000
2023
£’000
Loans and other borrowings
(604,567)
(650,037)
Lease liabilities
(41,370)
(344,977)
Cash and cash equivalents
308,622
416,162
Sub-total
(337,315)
(578,852)
Adjustments:
Retranslate debt balance at swap rate where hedged by foreign exchange derivatives
(8,306)
15,653
Net debt
(345,621)
(563,199)
Net debt before lease liabilities
(304,251)
(218,222)
The contractual maturity analysis of bank borrowings and lease liabilities is given in note 14.
19. Provisions
Dilapidations
£’000
Onerous
contracts
£’000
Total
£’000
At 1 January 2024
23,084
2,884
25,968
Created
9,035
9,100
18,135
Utilised
(283)
(1,300)
(1,583)
Released
(1,985)
(603)
(2,588)
Interest
217
—
217
FX on retranslation
26
—
26
Transfer to assets held for distribution
(18,017)
(3,778)
(21,795)
At 31 December 2024
12,077
6,303
18,380
Current
2,238
4,231
6,469
Non-current
9,839
2,072
11,911
Dilapidations provisions relate to leased properties. Dilapidations provisions are made based on the best estimate of the likely
committed cash outflow and discounted to net present value. Future costs are expected to be incurred over the term of the
existing lease arrangements at the reporting date, which is a period of up to 20 years.
The following table shows the timeline in which undiscounted costs in relation to the dilapidation provision are expected to be
incurred:
Current
£’000
1-5 years
£’000
6-10 years
£’000
11-15 years
£’000
16-20 years
£’000
21-25 years
£’000
Total
£’000
At 31 December 2024
2,359
914
1,980
—
15,530
—
20,783
At 31 December 2023
2,544
5,488
1,178
3,145
456
11,019
23,830
Onerous contracts relate to the unavoidable costs arising where the Group no longer operates from a leased property. Unless a
separate sublease or exit has been agreed with the landlord, the Group has provided for the costs of meeting the obligations of the
contract, being primarily service charges. The cost is recognised for the existing contractual term. Additionally, the Group entered into
a sponsorship agreement in 2023 with Williams racing which has not delivered the expected commercial returns, as such, this has
been identified as an onerous contract. Under the terms of the sponsorship agreement, the Group is contractually obligated to incur
annual fees and termination costs. Notice of termination has been provided, and the contract will be exited on 31 December 2025.
Furthermore, onerous contracts include the unavoidable costs committed to an aborted implementation of a payroll ERP system.
20. Contract liabilities
2024
£’000
2023
£’000
Contract liabilities
15,650
22,864
Contract liabilities are the consideration received from the customers for sales where the Group still has an obligation to transfer
goods or services. 100% of the transaction price of the unsatisfied contracts as at 31 December 2023 was recognised as revenue
during 2024.
21. Deferred tax
The deferred tax balance comprises:
2024
£’000
2023
£’000
Short-term timing differences
(4,725)
(6,920)
Accelerated capital allowances
(478)
(5,754)
Business combinations
122,963
135,335
Tax losses
(46,366)
(29,821)
Loan relationships
(15,993)
(38,577)
Derivatives
1,547
2,253
Other balance sheet amounts
479
(818)
Total deferred tax liability
57,427
55,698
Notes to the consolidated financial statements continued
174
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THG PLC Annual Report and Accounts 2024
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Governance
Financial Statements
Additional Information
Financial Statements
21. Deferred tax continued
Reflected in the statement of financial position as follows:
2024
£’000
Continuing operations
– Deferred tax assets
(4,072)
– Deferred tax liabilities
63,701
Net deferred tax liabilities
59,629
Assets held for distribution (note 12.2)
– Deferred tax assets
(2,705)
– Deferred tax liabilities
503
Net deferred tax assets
(2,202)
The movement on the deferred tax liability during the year is as follows:
Total
£’000
Opening balance 1 January 2024
55,698
Credited to the statement of comprehensive income
(25,756)
Charged to equity
1,326
Credited to OCI
(86)
Discontinued operations (note 12.2)
26,245
Closing balance 31 December 2024
57,427
The movement in respect of discontinued operations is the overall impact on deferred tax, across statement of comprehensive income
and equity, for discontinued operations, primarily relating to the change in recognition for deferred tax assets as disclosed in note 9.
Deferred tax assets have been recognised to the extent there is a legally enforceable right to set off current tax assets and liabilities,
levied by the same taxation authority. Due to the history of losses within the Group, no deferred tax assets have been recognised in
respect of forecasted future profits.
The Group has applied the exemption from recognising and disclosing information about deferred tax assets and liabilities related to
Pillar Two income taxes as required in the amendments to IAS 12 International Tax reform to Pillar Two Model Rules, issued in May 2023.
The Group did not recognise deferred tax assets in excess of those that could be unwound against deferred tax liabilities. These assets
relate to tax attributes, which have no expiry date. There is a decrease in the unrecognised deferred assets compared to 2023 (£96m
net) due to losses in the discontinued operations.
2024
Gross amount
£'000
2024
Tax effected
£’000
2023
Gross amount
£’000
2023
Tax effected
£'000
At 31 December:
Short term timing difference (UK)
14,538
3,635
—
—
Loan relationships (UK)
120,572
30,143
—
—
Losses (UK)
460,526
115,132
384,715
96,179
Fixed assets (UK)
89,544
22,386
—
—
Losses (US)
1,527
382
—
—
No deferred tax liability has been recognised in respect of temporary differences associated with investments in subsidiaries as,
where tax would arise on the realisation of those temporary differences, the Group is in a position to control the timing of their
reversal and it is probable that such differences will not reverse in the foreseeable future.
22. Leases
Set out below are the carrying amounts of the right-of-use assets recognised and movements during the period:
Motor
vehicles
£’000
Plant and
machinery
£’000
Land and
buildings
£’000
Total
£’000
As at 1 January 2023
210
164
293,935
294,309
Additions
1,920
(3)
59,475
61,392
Depreciation (note 3)
(568)
(45)
(38,809)
(39,422)
Lease modifications
98
—
(10,377)
(10,279)
Currency translation differences
(4)
(3)
(2,358)
(2,365)
As at 31 December 2023
1,656
113
301,866
303,635
As at 1 January 2024
1,656
113
301,866
303,635
Additions
—
—
25,057
25,057
Depreciation (note 3)
(614)
(45)
(38,263)
(38,922)
Lease modifications
(3)
—
(18,531)
(18,534)
Disposals
—
—
(213)
(213)
Transfers
—
—
(950)
(950)
Currency translation differences
(4)
(1)
(1,147)
(1,152)
Impairment
—
—
(7,372)
(7,372)
Transfer to assets held for distribution
(807)
(35)
(231,380)
(232,222)
As at 31 December 2024
228
32
29,067
29,327
Set out below are the carrying amounts of lease liabilities (included under note 18 interest-bearing loans and borrowings) and the
movements during the period:
2024
£’000
2023
£’000
As at 1 January
344,977
334,376
Additions
15,950
56,708
Accretion of interest
15,867
14,641
Payments
(47,476)
(49,487)
Lease modifications
(17,864)
(8,864)
Disposals
(213)
—
Currency translation differences
(1,942)
(2,397)
Transfer to liabilities held for distribution
(267,929)
—
As at 31 December
41,370
344,977
Current
10,293
43,537
Non-current
31,077
301,440
The maturity analysis of lease liabilities is disclosed in note 14.
The Group had total cash outflows for leases of £47.5m in 2024 (2023: £49.5m).
The following are the amounts recognised in the year in the consolidated statement of comprehensive income:
2024
£’000
2023
(Restated)1
£’000
Depreciation expense on right-of-use assets
11,732
9,801
Interest expense on lease liabilities
1,558
1,226
13,290
11,027
1. Restated for discontinued operations (refer to note 12.2).
Notes to the consolidated financial statements continued
176
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THG PLC Annual Report and Accounts 2024
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Additional Information
Financial Statements
23. Share capital and reserves
THG PLC is a public company limited by shares and incorporated in England and Wales. It has a standard listing on the London
Stock Exchange and is the holding company of the Group. The Company has nine classes of shares: Ordinary Shares of £0.005
each, all of which are fully paid; B Shares of £0.005 each, all of which are fully paid; D1 Shares of £0.005 each; D2 Shares of £1
each, all of which are fully paid; E Shares of £0.005 each; F Shares of £0.005 each; G Shares of £0.005 each; Deferred 1 Shares
of £0.005 each, all of which are fully paid; and Deferred 2 Shares of £0.005 each. As at 31 December 2024, the Company’s
issued share capital comprised:
Class
2024
Number
2023
Number
Nominal
value
£ each
Ordinary Shares
1,322,058,529
1,299,700,302
0.005
B Shares
204,081,632
—
0.005
D1 Shares
56,082,651
56,082,651
0.005
D2 Shares
17,066
17,441
1.000
E Shares
48,605,750
48,944,593
0.005
F Shares
26,715,453
27,014,247
0.005
G Shares
16,885,866
17,267,066
0.005
Deferred 1 Shares
323,059
317,613
0.005
Deferred 2 Shares
21,563,860
21,563,860
0.005
1,696,333,866
1,470,907,773
The rights attaching to the shares are set out in the Directors' Report on pages 124 to 129.
Capital risk management
The Group’s objectives when managing capital, which comprises equity, are to safeguard the Group’s ability to continue as a going
concern, to provide returns for Shareholders and benefits for other stakeholders, and to maintain an optimal capital structure.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to Shareholders, return
capital to Shareholders, issue new shares or sell assets to reduce debt.
During the financial year ended 31 December 2024, the following share conversions took place in respect of pre-IPO employee
share schemes:
Following the receipt from certain Shareholders of valid elections to participate in the demerger of THG Ingenuity from
the Company, 204,081,632 Ordinary Shares were redesignated as B Shares on 30 December 2024. These B Shares were
redesignated as Deferred 1 Shares upon completion of the demerger on 2 January 2025. Further information on the demerger
and the B Shares is included within the circular that was made available to Shareholders on 28 November 2024.
24. Pension commitments
During the year, the Group operated an auto-enrolment pension scheme. The scheme is managed by independent fund managers
and the Group contributes in accordance with the statutory requirements. In addition to the auto-enrolment scheme, a subsidiary
company operates a defined contribution pension scheme which is also managed by independent fund managers and its assets
and liabilities are held separately from that of the Group. The total Group pension charge represents the amount paid by the Group
and amounted to £12.6m (2023: £10.7m) of which £6.0m (2023: £4.6m) relates to continuing operations. £1.2m of contributions
due to the fund were outstanding at year end (2023: £1.2m) of which £0.6m relates to continuing operations.
25. Cash flow generated from operations
Note
2024
£’000
2023
£’000
Loss before taxation from continuing operations
(202,400)
(92,252)
Loss before taxation from discontinued operations
(120,840)
(159,712)
Loss before taxation
(323,240)
(251,964)
Adjustments for:
Depreciation of property, plant and equipment
12.1
54,308
55,691
Depreciation of right-of-use assets
22
38,922
39,422
Amortisation
11
64,582
68,829
Amortisation of acquired intangibles
11
47,917
50,543
Share-based payments
7
16,579
16,723
Adjusted items
4, 12.2
146,400
50,627
Other operating expense
12.1
—
17,664
Net finance costs
8, 12.2
68,914
66,571
Operating cash flow before adjusting items and before movements in working
capital and provisions
114,382
114,106
Decrease in inventories
1,280
70,678
Decrease/(increase) in trade and other receivables
24,500
(10,414)
Decrease in trade and other payables1
(9,798)
(11,336)
Increase/(decrease) in provisions
6,084
(575)
Foreign exchange loss
(36)
(201)
Cash generated from operations before adjusting items
136,412
162,258
1. Included within trade and other payables is an increase in contract liabilities of £5.0m (2023: decrease £11.4m).
Refer to the Chief Financial Officer’s Review on page 26 of this report for details regarding undrawn borrowing facilities that may
be available in the future for the operating activities and settling capital commitments.
26. Earnings per share
The following table reflects the income and share data used in the basic and diluted EPS calculations:
2024
2023
(Restated)1
Loss for the financial year – continuing operations (£’000)
(180,533)
(107,962)
Loss for the financial year – discontinued operations (£’000)
(145,607)
(140,410)
Total loss for the financial year (£’000)
(326,140)
(248,372)
Weighted average number of Ordinary Shares for basic EPS
1,368,632,773
1,296,925,602
Basic and diluted EPS (£’s)
(0.24)
(0.19)
Basic and diluted EPS – continuing operations (£’s)
(0.13)
(0.08)
Basic and diluted EPS – discontinued operations (£’s)
(0.11)
(0.11)
1. Restated for discontinued operations (refer to note 12.2).
In 2024, if the impact of impairment charges in the year was removed, the Basic and Diluted EPS would have been £(0.19).
Notes to the consolidated financial statements continued
(i)
2,339 Ordinary Shares were converted from 742 F Shares and
1,597 G Shares
(ii)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(iii)
16,878 Ordinary Shares were converted from 16,878 E Shares
(iv)
8,717 Ordinary Shares were converted from 3,524 F Shares and
5,193 G Shares
(v)
103,867 Ordinary Shares were converted from 42,474 E Shares,
24,483 F Shares and 36,910 G Shares
(vi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(vii)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(viii)
14,096 Ordinary Shares were converted from 14,096 F Shares
(ix)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(x)
65,000 Ordinary Shares were converted from 65,000 F Shares
(xi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xii)
26,337 Ordinary Shares were converted from 10,572 F Shares
and 15,765 G Shares
(xiii)
20,869 Ordinary Shares were converted from 20,869 E Shares
(xiv)
3,000 Ordinary Shares were converted from 3,000 E Shares
(xv)
13,215 Ordinary Shares were converted from 5,048 F Shares
and 8,167 G Shares
(xvi)
16,000 Ordinary Shares were converted from 16,000 F Shares
(xvii)
209,440 Ordinary Shares were converted from 28,786 E Shares
and 180,654 G Shares
(xviii)
14,105 Ordinary Shares were converted from 14,105 E Shares
(xix)
13,095 Ordinary Shares were converted from 13,095 G Shares
(xx)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(xxi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xxii)
1,000 Ordinary Shares were converted from 1,000 E Shares
(xxiii)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(xxiv)
8,000 Ordinary Shares were converted from 8,000 G Shares
(xxv)
2,000 Ordinary Shares were converted from 2,000 E Shares
(xxvi)
15,326 Ordinary Shares were converted from 15,326 F Shares
(xxvii) 80,000 Ordinary Shares were converted from 24,255 E Shares
and 55,745 F Shares
(xxviii) 4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xxix)
35,055 Ordinary Shares were converted from 14,096 F Shares
and 20,959 G Shares
(xxx)
35,055 Ordinary Shares were converted from 14,096 F Shares
and 20,959 G Shares
(xxxi)
185,476 Ordinary Shares were converted from 185,476 E Shares
(xxxii) 50,395 Ordinary Shares were converted from 27,792 F Shares
and 22,603 G Shares
178
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THG PLC Annual Report and Accounts 2024
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Governance
Financial Statements
Additional Information
Financial Statements
26. Earnings per share continued
The basic loss per share has been calculated by dividing the loss attributable to the Group by the weighted average number of
Ordinary Shares in issue. Earnings per share has been calculated with respect to total loss for the year for the Group, including
both continuing and discontinued operations (see note 12.2).
The diluted loss per share has been calculated by adjusting the weighted average number of shares for the effects of the D, E, F
and G Shares assuming full vesting of all potentially dilutive shares. The number of these shares is disclosed in note 23.
Basic and diluted earnings per share are equal since the effect of all potentially dilutive shares outstanding was anti-dilutive.
27. Related Party Transactions
The Directors’ interests in the Ordinary Share capital of the Company at the balance sheet date are detailed below:
£ per share
Ordinary
Shares
2024
Number
Ordinary
Shares
2023
Number
M J Moulding
0.005
269,702,708 249,294,545
M J Moulding
1.000
360
360
J A Gallemore
0.005
4,216,826
4,216,826
J A Gallemore
1.000
3,174
3,174
D Sanders
0.005
487,487
21,926
C Allen
0.005
2,942,000
2,400,000
G Kent
0.005
53,600
—
D Moore
0.005
53,143
—
S Farr
0.005
171,743
67,397
H Jones
0.005
134,084
—
I McDonald1
0.005
2,691,419
2,505,943
280,456,544 258,510,171
1. I McDonald stepped down from the Board on 31 March 2024.
In addition to the shareholdings noted above, the Directors had the following interests in vested shares issued under previous
incentive arrangements at the balance sheet date. These shares carry no voting rights.
Date of
award
2024
Subscription/
exercise price
£
2023
Subscription/
exercise price
£
2024
Number
2023
Number
M J Moulding
Dec-19
0.23
0.23
43,641,266
43,641,266
M J Moulding
Aug-20
0.33
0.33
20,197,808
20,197,808
M J Moulding
Aug-20
0.28
0.28
7,733,792
7,733,792
J A Gallemore
Dec-19
0.23
0.23
185,476
185,476
J A Gallemore
Aug-20
0.33
0.33
2,666,963
2,666,963
J A Gallemore
Aug-20
0.28
0.28
4,000,537
4,000,537
I McDonald1
Dec-19
0.23
0.23
—
185,476
78,425,842
78,611,318
1. I McDonald stepped down from the Board on 31 March 2024.
Details of unvested awards granted to the Directors under the 2024 LTIP scheme are provided in the Directors’ Remuneration
Report. Also refer to note 15 and the Directors' Remuneration Report for further information as to shareholdings.
In 2024, the Group has provided interest free loans to the Directors of £0.6m (2023: none) for them to subscribe for shares as
part of the employee benefit scheme which remain outstanding at the balance sheet date. A further £0.3m of interest-free loans
provided in previous years for the same purpose also remains outstanding at the balance sheet date. Full details of the Directors’
shareholdings are detailed in the Directors’ Remuneration Report on page 110. Movements in shareholdings post year end,
following the demerger have been disclosed within note 29.
The Group has in place an agreement on commercial terms with Moulding Capital Limited to provide property, facilities and project
management services to the entity and its subsidiaries. This agreement generated £235,382 (2023: £307,720) for the Group,
recognised within administrative expenses.
Prior to the IPO which took place in September 2020, THG divested the Propco Group, an entity now wholly owned by the Group’s
CEO. The Propco Group owns property assets occupied and utilised by THG and its operating businesses.
The amounts recognised on the Group’s balance sheet in relation to the leases with Propco for continuing operations in the year
are as follows:
2024
£’000
2023
£’000
Right-of-use asset
12,742
154,682
Lease liability
24,025
174,457
The amounts recognised on the Group’s statement of comprehensive income in relation to the leases with Propco for continuing
operations in the year are as follows:
2024
£’000
2023
£’000
Depreciation arising on right-of-use assets
2,764
2,286
Expense recognised in financing costs
991
1,052
Impairment arising on property, plant and equipment
7,372
—
The table below gives further detail around the leases in place for continuing operations:
Number of properties
Residual lease
term date
divestment
FY 2024
rent
£’000
5
0-4 years
470
10
9-10 years
1,770
1
18-24 years
650
16
2,890
Refer to Note 12.2 for further details on related parties in relation to discontinued operations.
28. Subsidiary undertakings
These consolidated financial statements include the results of all subsidiaries owned by THG PLC as listed in the table below,
split below by those pertaining to continuing and discontinued operations. Some of these subsidiaries, in respect of continuing
operations, which are listed below, have taken the exemption from an audit for the year ended 31 December 2024 permitted by
s479A of Companies Act 2006. In order to allow these subsidiaries to take the audit exemption, the parent company THG PLC has
given a statutory guarantee, in line with s479C of Companies Act 2006.
At the balance sheet date, the following subsidiaries were controlled by the Group (a company incorporated in England and
Wales). All investments are 100% owned by THG PLC either directly or indirectly.
Continuing operations
Subsidiary
Registered
office
Country of
incorporation
Nature of
business
The Hut Holdings Limited
1
England and Wales
Dormant
Cend Limited
1
England and Wales
Holding company
Ensco 818 Limited
1
England and Wales
Holding company
Mankind Holdings Limited
3
Guernsey
Holding company
Mankind Direct Limited
1
England and Wales
Dormant
Lookfantastic Group Limited
1
England and Wales
Holding company
Lookfantastic.com Ltd
1
England and Wales
Holding company
Lookfantastic Franchising Limited
1
England and Wales
Holding company
Lookfantastic London Limited
1
England and Wales
Dormant
Lookfantastic Salons Limited
1
England and Wales
Holding company
Exante Diet Limited
1
England and Wales
Dormant
Bike Kit Limited
1
England and Wales
Dormant
CNP Professional Holdings Limited
3
Guernsey
Holding company
MyVitamins Limited
1
England and Wales
Dormant
HQ Hair Limited
3
Guernsey
Holding company
Cend International Limited
1
England and Wales
Holding company
Mama Mio Limited
1
England and Wales
Holding company
Mama Mio Distribution Limited
1
England and Wales
Dormant
Notes to the consolidated financial statements continued
180
181
THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Subsidiary
Registered
office
Country of
incorporation
Nature of
business
Mama Mio US, LLC
7
USA
Holding company
Gadbrook Limited
1
England and Wales
Holding company
THG International Limited
1
England and Wales
Marketing company
The Hut Group International (Shanghai) Co Limited
10
China
License holding company
PC Beauty Inc.
1
USA
Holding company
Performance Supplements LLC
7
USA
Holding company
Salu Australia PTY Limited
15
Australia
Holding company
Skincarestore Australia PTY Limited
15
Australia
Online retailing
Salu Beauty, LLC
1
USA
Holding company
RY.com.au Pty Limited
15
Australia
Online retailing
Media Ark Limited
1
England and Wales
Holding company
Illamasqua (Holdings) Limited
1
England and Wales
Holding company
Illamasqua Limited
1
England and Wales
Holding company
Beauty Box Beteiligungen GmbH
16
Germany
Holding company
Beauty Trend Holding GmbH
16
Germany
Online retailing
Beauty Trend GmbH
16
Germany
Online retailing
Jade 1150. GmbH
16
Germany
Holding company
Beauty Trend S.A.S France
4
France
Holding company
GlossyBox Sweden Holding UG
16
Germany
Holding company
GlossyBox Sweden AB
23
Sweden
Online retailing
GlossyBox United Kingdom Holding GmbH
16
Germany
Holding company
Beauty Trend UK Limited
1
England and Wales
Online retailing
VRB GmbH & Co. B-149 KG
16
Germany
Holding company
Beauty Trend USA Inc.
7
USA
Online retailing
EI Spa Holdings (UK) Limited
1
England and Wales
Holding company
ESPA International (UK) Limited
1
England and Wales
Holding company
Primavera Aromatherapy Limited
1
England and Wales
Holding company
ESPA International (US) LLC
7
USA
Holding company
ESPA International FZE
12
UAE
Holding company
Make Money Limited
1
England and Wales
Holding company
M Beauty Limited
1
England and Wales
Holding company
Acheson & Acheson Limited
1
England and Wales
Manufacturing
1010 Products Limited
1
England and Wales
Dormant
Ameliorate Skincare Limited
1
England and Wales
Holding company
Great John Street Hotel Limited
1
England and Wales
Hotel operator
THG Trustee Limited1
1
England and Wales
Trustee of EBT
THG Nutrition US Inc.
1
USA
Holding company
Myprotein Japan K.K.
8
Japan
Online retailing
Colorist Christophe Robin S.A.S.
4
France
Online retailing
Colorist Christophe Robin US LLC
7
USA
Holding company
THG General Trading LLC
19
UAE
Online retailing
David Berryman Ltd
1
England and Wales
Online retailing
David Berryman Holdings Limited
1
England and Wales
Holding company
Fair Juice Limited
1
England and Wales
Dormant
Claremont Ingredients Ltd
1
England and Wales
Online retailing
THG 100 KING STREET LIMITED
1
England and Wales
Holding company
Lion/Wrinkle Holdings, LLC
1
USA
Holding company
Lion/Wrinkle Parent LLC
1
USA
Holding company
Subsidiary
Registered
office
Country of
incorporation
Nature of
business
Lion/Wrinkle Intermediate LLC
1
USA
Holding company
N.V. Perricone LLC
7
USA
Holding company
Perricone MD Cosmeceuticals UK Limited
1
England and Wales
Holding company
THG Intermediate OpCo Limited
1
England and Wales
Holding company
THG Operations Holdings Limited
1
England and Wales
Holding company
THG Intermediate Holdings Limited1
1
England and Wales
Holding company
THG Shelfco Limited
1
England and Wales
Holding company
THG Beauty USA LLC
7
USA
Online retailing
The Protein Lab (UK) Limited
1
England and Wales
Manufacturing
Brighter Foods Limited
1
England and Wales
Manufacturing
Bentley Laboratories Blocker Company
7
USA
Holding company
Bentley Laboratories LLC
14
USA
Manufacturing
Cult Beauty Limited
1
England and Wales
Holding company
THG Beauty Limited
1
England and Wales
Online retailing
THG Beauty Singapore PTE Limited
17
Singapore
Online retailing
THG Luxury Limited
1
England and Wales
Online retailing
THG Nutrition Limited
1
England and Wales
Online retailing
THG AUS Nutrition PTY Limited
15
Australia
Online retailing
THG Nutrition India Private Limited
18
India
Online retailing
THG Nutrition Singapore PTE Limited
17
Singapore
Online retailing
THG Nutrition Poland s.p.z.o.o
6
Poland
Online retailing
THG Beauty Europe GmbH
16
USA
Online retailing
THG Shared Services Limited
1
England and Wales
Shared service centre
THG Shared Services AUS PTY Limited
15
Australia
Shared service centre
THG Shared Services Poland sp.z.o.o
6
Poland
Shared service centre
THG Shared Services US LLC
13
USA
Shared service centre
THG Beauty Trading LLC
21
UAE
Online retailing
THG Insurance Limited1
3
Guernsey
Holding company
Dermstore LLC
1
USA
Holding company
THG Finco PLC
1
England and Wales
Holding company
1. Companies owned directly by THG PLC
Discontinued operations
Subsidiary
Registered
office
Country of
incorporation
Nature of
business
The Hut.com Limited
1
England and Wales
Online retailing
The Hut Platform Limited
1
England and Wales
Holding company
The Hut.com (Trading) Limited
2
Jersey
Holding company
Guco Internet Supplies Limited
3
Guernsey
Holding company
Iwantoneofthose Limited
3
Guernsey
Holding company
Moo Limited
1
England and Wales
Online advertising
THGPP LLC
1
USA
Holding company
THG International LLC
1
USA
Warehouse and
distribution
Hale Country Club Limited
1
England and Wales
Retail and leisure company
Ideal Shape LLC
7
USA
Marketing company
UK-2 Limited
1
England and Wales
Webhosting
Another.com Limited
1
England and Wales
Holding company
Virtual Internet Holdings Limited
1
England and Wales
Holding company
Hosting Services Inc.
1
USA
Webhosting
UK2 Ukraine LLC
5
Ukraine
Webhosting
Virtual Internet (UK) Limited
1
England and Wales
Webhosting
Notes to the consolidated financial statements continued
28. Subsidiary undertakings continued
Continuing operations continued
182
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Subsidiary
Registered
office
Country of
incorporation
Nature of
business
The Hut.com (Poland) sp. z.o.o.
6
Poland
Warehouse and
distribution
THG Studios Limited
1
England and Wales
Visual content producer
H7P Portugal Unipessoal LDA
11
Portugal
Holding company
Language Connect International Ltd
1
England and Wales
Translation and
interpretation
Language Connect, Inc.
7
USA
Translation and
interpretation
THG Ingenuity Singapore Pte. Limited
24
Singapore
Translation and
interpretation
Eddie Rockers Limited
1
England and Wales
Holding company
King Street Investments Limited
1
England and Wales
Hotel operator
The Hut Group Limited
1
England and Wales
Dormant
THG Hangar Holdco Limited
1
England and Wales
Holding company
THG Hangar 2 Limited
1
England and Wales
Holding company
The Hut Group, S.L
9
Spain
Online retailing
THG Ingenuity Limited
1
England and Wales
Holding company
Arrow Film Distributors Limited
1
England and Wales
Motion picture distributor
and film processing
The Engine House Media Services Limited
1
England and Wales
Holding company
Indigo Environmental Limited
1
England and Wales
Environmental consulting
activities
Indigo Environmental Holdings Limited
1
England and Wales
Holding company
Indigo Polymers Limited
1
England and Wales
Dormant
Three Counties Reclamation Limited
1
England and Wales
Recovery of sorted metals
Preston Plastics (Holdings) Limited
1
England and Wales
Holding company
Preston Plastics Limited
1
England and Wales
Recovery of sorted metals
Eco Credits Limited
1
England and Wales
Environmental consulting
activities
THG AUS Fulfilment PTY Limited
15
Australia
Fulfilment
THG Eco Ltd
1
England and Wales
Holding company
THG Ingenuity Germany GmbH
16
Germany
Online retailing
THG Experience Limited
1
England and Wales
Holding company
THG OnDemand Limited
1
England and Wales
Online retailing
THG OnDemand Netherlands B.V
20
Netherlands
Online retailing
THG OnDemand US LLC
13
USA
Online retailing
THG Ingenuity General Trading LLC
22
UAE
Holding company
THG Icon CP PropCo Limited
1
England and Wales
Holding company
City A.M. Limited
1
England and Wales
Financial and business
newspaper
Registered offices:
1.
Icon 1 7-9 Sunbank Lane, Ringway, Altrincham, United Kingdom, WA15 0AF.
2.
2nd Floor, Charter Place, 23/27 Seaton Place, St Helier, Jersey, JE1 1JY.
3.
PO Box 296, Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 4NA.
4.
73 rue Sainte-Anne, Paris, France.
5.
79060, Ukraine, Lviv, Naukova str. 7D, office No. 305.
6.
ul. Magazynowa 1, 55-040 Magnice, Poland.
7.
06-101, WeWork 115 Broadway, New York, NY 10006, USA.
8.
DLA Piper Tokyo, 2-1-1 Marunouchi, Chiyoda-ku, Meiji Seimei Kan 7F, Tokyo, 100-0005, Japan.
9.
Monte Equinza 30 Bajo Izquierda 2810, Madrid, Spain.
10.
Room 204-10, Tower 2, 38 Debao Road, China (Shanghai) Pilot Free Trade Zone.
11.
R Hortas de Fanares 30 Loja Esquerda 2725-326 Mem Martins, Portugal.
12.
Jebel Ali Free Zone, Dubai, UAE.
13.
300 Creekview Road, Suite 209, Newark, New Castle, 19711.
14.
111 Fieldcrest Avenue, Edison NJ 08837.
15.
C/O Azure Group PTY Ltd, Suite 20.01, Level 20, 133 Castlereagh Street, Sydney NSW 2000, Australia.
16.
Maximilianstrasse 5480538 Munich.
17.
100 Tras Street, #16-01 100AM, 079027, Singapore.
18.
203, 2nd Floor, Time Tower, Gurgaon Haryana, India.
19.
Office F-31, Hamood Abdulla Ismail Alyasi – Port Saeed, Dubai, UAE.
20.
FAO NTREE, De Boelelaan 30 1083 HJ Amsterdam, The Netherlands.
21.
Office 350, 1st floor Onyx Business Office Building al Khabeesi Deira Dubai, UAE.
22.
Office 1105-102, The Offices at IBN Battuta Gate, Dubai, UAE.
23.
c/o Intertrust (Sweden) AB, Box 16285, 103 25 Stockholm.
24.
Rawlinson & Hunter Singapore – 30 Cecil Street, #18-02 & 03, Prudential Tower, Singapore 049712.
Subsidiary audit exemptions
The below subsidiaries have taken the exemption from an audit for the year ended 31 December 2024 permitted by s479A of
Companies Act 2006. In order to allow these subsidiaries to take the audit exemption, the parent company THG PLC has given a
statutory guarantee, in line with s479C of Companies Act 2006.
Name
Company number
Ensco 818 Limited
7459909
Lookfantastic Group Limited
5381562
Illamasqua (Holdings) Limited
6116121
EI Spa Holdings (UK) Limited
9317257
Make Money Limited
5880897
THG Intermediate Holdings Limited
12526036
Lookfantastic.com Ltd
3519634
Mankind Direct Limited
4112104
Cend Limited
4067712
THG Shared Services Limited
13515579
The Protein Lab (UK) Limited
8491800
THG Nutrition Limited
13400484
Gadbrook Limited
9867117
Lookfantastic London Limited
6338404
Mama Mio Distribution Limited
7721655
Fair Juice Limited
6494686
Beauty Trend UK Limited
7569585
THG International Limited
10523712
Illamasqua Limited
6301971
Primavera Aromatherapy Limited
2053064
M Beauty Limited
5850964
THG 100 KING STREET LIMITED
12938227
Cend International Limited
8651475
ESPA International (UK) Limited
2742156
Acheson & Acheson Limited
2764368
Great John Street Hotel Limited
7973960
THG Beauty Limited
13400467
THG Luxury Limited
13515580
Media Ark Limited
6127322
Ameliorate Skincare Limited
3427037
THG Trustee Limited
10511000
Notes to the consolidated financial statements continued
28. Subsidiary undertakings continued
Discontinued operations continued
184
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THG PLC Annual Report and Accounts 2024
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Name
Company number
THG Intermediate OpCo Limited
12297092
David Berryman Holdings Limited
10392135
Claremont Ingredients Ltd
2817306
David Berryman Ltd
2185279
Perricone MD Cosmeceuticals UK Limited
6471993
Lookfantastic Franchising Limited
5382066
Lookfantastic Salons Limited
6310534
Mama Mio Limited
5251791
Brighter Foods Limited
8815259
Cult Beauty Limited
6195011
Bike Kit Limited
8317188
The Hut Holdings Limited
7002848
THG Finco PLC
15788663
Exante Diet Limited
7126424
1010 Products Limited
3402920
Myvitamins Limited
8179216
THG Shelfco Limited
13120197
29. Post balance sheet events
Discontinued operations
On 17 September 2024 the Group announced that it was progressing options for the demerger of THG Ingenuity from the
Group into an independent private company. To effect the demerger Shareholder approval was sought to the business set out
in the circular which was made available to Shareholders on 28 November 2024, with Shareholder approval being obtained on
27 December 2024. The Company therefore believed that it was highly probable that the transaction would complete within
12 months of the date of the announcement and thus THG Ingenuity was classified as a disposal group held for distribution and
discontinued operations from that date. The demerger successfully completed on 2 January 2025.
As required by IFRIC 17, a dividend liability has been recognised at the balance sheet date for the accounting fair value of THG
Ingenuity. The delta between the net assets and the accounting fair value will be recognised within adjusting items within the
FY25 financial statements (at the date of demerger). For further information please see note 12.2 to the financial statements.
Equity placing and equity raise
On 27 March 2025 the Company announced that, following an oversubscribed equity fundraise, it would receive gross proceeds
of £90m, comprising £22m raised from the equity placing and an equity contribution of £68m from Matthew Moulding structured
by way of a convertible loan. As subsequently announced on 31 March 2025, Matthew Moulding transferred 23,327,894 voting
Ordinary Shares to the placing book to satisfy demand from new and existing investors in the fundraise. Further details on the
change in Matthew Moulding’s holding in Ordinary Shares between 31 December 2024 and the date of signing can be found in
the ‘Directors’ shareholdings (audited)’ section of the Annual Report on Remuneration. Post year end, 68,527,697 new Ordinary
Shares were issued and a convertible loan of £68m has been recognised.
Refinancing
On 4 April 2025 the Company announced the completion of its debt refinancing through to 2029. As part of a plan to delever, an
‘amend and extend’ refinancing was agreed that reduced the Term Loan B from €600m to €445m with maturity extended by three
years to December 2029. The Term Loan A was partially repaid with a final stub of £35m maturing in October 2025. The undrawn
RCF totals £150m and has also been extended to 2029. The reduction in facilities was partially funded by the equity placing and
equity raise referred to above. Additional liquidity was also obtained through asset backed lending facilities.
The demerger of THG Ingenuity will materially reduce the cash outflows of the Group with substantial reductions in lease
commitments (c. £20m cash cost per annum) and capex requirements which, in turn, mean that the Group requires smaller banking
facilities. There are no key covenants attached to the Term Loan B or Term Loan A facilities which are drawn down. Covenants attached
to the RCF are linked to net debt leverage and only become effective when the facility is drawn above a certain level, which is not
anticipated to occur on test dates.
Notes to the consolidated financial statements continued
28. Subsidiary undertakings continued
Subsidiary audit exemptions continued
Note
2024
£’000
2023
£’000
Non-current assets
Investments
5
5,000
541,303
5,000
541,303
Current assets
Receivables
6
1,582,356
1,599,654
Assets held for distribution
7
501,331
—
Cash
47,860
52,112
2,131,547
1,651,766
Payables: amounts falling due within one year
8
(514,962)
(7,320)
Net current assets
1,616,585
1,644,446
Total assets less current liabilities
1,621,585
2,185,749
Provisions for liabilities
9
(689)
—
Net assets
1,620,896
2,185,749
Capital and reserves
Called-up share capital
10
8,219
7,072
Share premium
2,117,148
2,024,824
Merger reserve
615
615
Capital redemption reserve
523
523
Loss for the year
(173,572)
(16,288)
Retained earnings
(332,037)
169,003
Total Shareholders’ funds
1,620,896
2,185,749
The financial statements on pages 187 to 193 were approved by the Board of Directors on 28 April 2025 and were signed on its
behalf by:
Damian Sanders Chief Financial Officer Registered number: 06539496
Company statement of financial position
for the year ended 31 December 2024
186
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Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
Ordinary
Shares
£’000
Share
premium
£’000
Merger
reserve
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2023
6,903
2,024,452
615
523
152,280
2,184,773
Loss for the year
—
—
—
—
(16,288)
(16,288)
Issue of Ordinary Share capital
169
372
—
—
—
541
Share-based payment
—
—
—
—
16,723
16,723
Balance at 31 December 2023
7,072
2,024,824
615
523
152,715
2,185,749
Balance at 1 January 2024
7,072
2,024,824
615
523
152,715
2,185,749
Loss for the year
—
—
—
—
(173,572)
(173,572)
Issue of Ordinary Share capital
1,147
92,324
—
—
—
93,471
Share-based payment
—
—
—
—
16,579
16,579
Dividend in specie
—
—
—
—
(501,331)
(501,331)
Balance at 31 December 2024
8,219
2,117,148
615
523
(505,609)
1,620,896
Company statement of changes in equity
for the year ended 31 December 2024
1. Accounting policies
The principal accounting policies
have been applied in accordance
with Financial Reporting Standard 101
Reduced Disclosure Framework ("FRS
101") and are detailed below. The policies
have been applied consistently
throughout both the current and
preceding year.
a. Basis of preparation
The Company financial statements
have been prepared in accordance with
United Kingdom’s Generally Accepted
Accounting Practice, including Financial
Reporting Standard 101 Reduced
Disclosure Framework ("FRS 101"), and
in accordance with the provisions of the
Companies Act 2006. The Company has
taken advantage of section 408 of the
Companies Act 2006 not to present the
parent company profit and loss account.
The loss for the financial year in the
financial statements of the Company is
£173.6m (2023: £16.3m). The financial
statements have been prepared on the
historical cost basis.
In accordance with FRS 101, the Company
has taken advantage of the following
disclosure exemptions:
– Company cash flow statement and
related notes;
– disclosures required by IFRS 2
Share‑based Payments;
– disclosures required by IFRS 7
Financial Instrument Disclosures; and
– disclosure of Related Party
Transactions.
There have been no new or amended
accounting standards or interpretations
adopted during the year that have had
a significant impact on the Company’s
financial statements.
There are no standards, interpretations
or amendments to IFRS that have been
issued but are not yet effective that are
expected to have a material impact on
the Company’s financial statements.
b. Taxation and deferred
taxation
Current tax including UK corporation
tax is provided at amounts expected
to be paid or recovered using the tax
rates and laws that have been enacted
or substantively enacted by the balance
sheet date.
Deferred taxation is provided in full
on timing differences that result in an
obligation at the balance sheet date to
pay more tax, or a right to pay less tax, at
a future date, at rates expected to apply
when they crystallise based on current
tax rates and law.
Temporary differences arise from
the inclusion of items of income and
expenditure in taxation computations in
periods different from those in which they
are included in the financial statements.
Deferred tax assets are recognised to the
extent that it is regarded as more likely
than not that they will be recovered.
Deferred tax assets and liabilities are not
discounted.
c. Financial instruments
Financial assets and financial liabilities
are recognised on the Company’s
balance sheet when the Company
becomes a party to the contractual
provisions of the instrument.
The most significant financial asset
relates to an intercompany debtor,
representing funding requirements within
the Group. Management have considered
all aspects of IFRS 9 with respect to
recognising the appropriate value of
this financial instrument at the balance
sheet date, including credit risk, and have
concluded that this has not adversely
changed since initial recognition.
d. Financial liabilities and equity
Financial liabilities and equity
instruments are classified according
to the substance of the contractual
arrangements entered. An equity
instrument is any contract that evidences
a residual interest in the assets of the
Company after deducting all its liabilities.
e. Investments in subsidiaries
Investments in subsidiaries are held at
cost, less any provision for impairment.
Where equity-settled share-based
payments are granted to the employees
of subsidiary companies, the fair value
of the award is treated as a capital
contribution by the Company and the
investments in subsidiaries are adjusted
to reflect this capital contribution.
f. Share-based payments
The Group operates share-based
compensation plans, under which the
Group receives services from employees
as consideration for equity instruments
(options) of the Company.
The fair value of the employee services
received in exchange for the grant of the
equity instruments is recognised as an
increase to investments in the statement
of comprehensive income. The total
charge is recognised over the vesting
period, which is the period over which all
the specified vesting conditions are to
be satisfied. At the end of each reporting
period, the Group revises its estimates
of the number of equity instruments
that are expected to vest based on the
non-market vesting conditions along with
taking account of any equity instruments
that may have been cancelled or modified
in the period. It recognises the impact of
the revision to original estimates, if any, in
the statement of comprehensive income
with a corresponding adjustment to
equity. Note 7 in the consolidated financial
statements details the schemes in place.
g. Dividends received
Dividends received from subsidiaries
are recognised in the statement of
comprehensive income when the right to
receive payment is established, unless
the equity method is used, in which case
the dividend is recognised as a reduction
of the carrying amount of the investment.
h. Dividend liability
The dividend liability is measured
at the fair value of the assets to be
distributed at the date the distribution
is approved. The liability is remeasured
at each reporting date and at the date
of settlement, with any changes in fair
value recognised directly in equity. On
settlement, the difference between the
carrying amount of the asset distributed
and the amount of the dividend liability is
recognised in profit or loss.
Notes to the Company financial statements
188
189
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
1. Accounting policies continued
i. Critical accounting judgements and key sources of estimation uncertainty
Critical accounting judgements
Impairment of investments
The carrying amounts of the Company’s investments are reviewed at each reporting date to determine whether there is any indication
of impairment in accordance with the accounting policy set out in note 1 of the consolidated financial statements. The Company
considers impairment of its investments in subsidiaries by estimating the recoverable amounts of its investments. In performing
this assessment, management have considered the cash flows at a group consolidated level adjusted for applicable intercompany
borrowings and external borrowings held at a subsidiary level, consistent with the impairment review for the Group's goodwill. See note
5 for more information. Note 11 in the consolidated financial statements details the assumptions used together with an analysis of the
sensitivity to changes in key assumptions which could impact the Group level assessment. There are no critical assumptions in respect
of the parent level adjustments which would reasonably change to the overall assessment performed.
Key sources of estimation uncertainty
Recoverability of intercompany receivables
The Company uses estimates to determine the recoverability of amounts due from its subsidiaries. Under IFRS 9, the carrying
amounts of receivables from other Group subsidiaries are required to be assessed for recoverability on a forward-looking basis
through the recognition of an expected credit loss ("ECL") provision. This requires the estimation of loss given default ("LGD")
and probability of default ("PD") to compute the ECL, which is deemed to reflect the risk over recoverability of intercompany
debtors. The Group external credit risk ratings have been used as the primary measure of PD. Management consider this to be a
reasonable metric of the Company as a result of the funding arrangements in place and as these ratings provide an independent
view as to financial health and market sentiment, including the impact of macroeconomic factors. Other sources of internal and
external information are also used in determining the final PD applied, including financial forecasts, financing arrangements and
an assessment as to significant changes in credit risk and default events of each borrower.
Valuation of dividend liability
The dividend liability, included within payables: amounts falling due within one year, is measured at the fair value of the assets
to be distributed at the date the distribution is approved. Determining the appropriate valuation required judgement, including
assessing the fair value of the business based on comparable transactions, market conditions, and internal financial projections.
Refer to note 12.2 of the THG PLC Group notes to the consolidated financial statements for management’s detailed considerations
in respect to this matter.
2. Employee costs and numbers
2024
£’000
2023
£’000
Short-term employee benefits
993
961
Social security costs
187
137
Pension costs
2
1
1,182
1,099
The average number of employees during the year was three (2023: three).
3. Auditor remuneration
Amounts paid to the Company’s auditor are disclosed in note 5 of the Group’s consolidated financial statements.
4. Dividend received
A dividend was received from the Company's immediate subsidiary to reflect the receipt of the investment of THG Ingenuity in
advance of demerger:
2024
£’000
2023
£’000
Dividend received
501,331
—
Notes to the Company financial statements continued
5. Fixed asset investments
Fixed asset investments comprise investments in subsidiary undertakings.
2024
£’000
2023
£’000
At 1 January
541,303
524,580
Additions – share based payments
16,579
16,723
Additions – dividend received (note 4)
501,331
—
Transfer to assets held for distribution (note 7)
(501,331)
—
Impairment
(552,882)
—
At 31 December
5,000
541,303
An impairment of £552.9m has been recognised in respect of fixed asset investments. The recoverable value for the investment
in THG Intermediate Holdings Limited was determined with reference to the recoverable amount of the Group’s trading entities,
utilising the forecasts applied as part of Group goodwill impairment assessments. The Group uses a 5-year discounted cash
flow (DCF) approach for each of the businesses and this has been used as the starting position for the amount available for
distribution to the parent.
Appropriate adjustments have been made to these DCFs to determine the cash flows available to support the Group’s
investments including deducting amounts receivable from the investment group, adding cash held in the investment group and
deducting amounts payable by the investment group to settled it’s external financing facilities.
This recoverable value has then been compared to the investment carrying values resulting in an impairment of £552.9m.
The impairment arose as a result of the removal of THG Ingenuity from the recoverable amount of the investment following the
planned demerger and separate presentation of THG Ingenuity along with the impact of the performance in THG Nutrition. Given
the mathematical workings and limitations of a 5-year DCF model under IAS 36 these changes have led to an impairment charge
in the year.
6. Receivables
2024
£’000
2023
£’000
Trade and other receivables
3,260
3,004
Amounts owed from Group undertakings
1,547,499
1,564,437
Unpaid share capital
26,335
26,685
Corporation tax asset
2,368
2,486
Other taxation and social security
715
1,080
Prepayments and accrued income
2,179
1,962
1,582,356
1,599,654
Amounts owed by Group undertakings are unsecured, non-interest bearing and repayable on demand. The current amount
includes amounts of £1,547.5m (2023: £1,564.4m) due on demand but expected to be settled after one year. This amount is net
of an Expected Credit Loss allowance of this amount of £11.0m (2023: £8.9m).
At 31 December 2024, there were 159,293,306 fully vested, but partly paid and unlisted Shares (31 Dec 2023: 160,392,591).
The average amount of unpaid share capital per fully vested but partly-paid and unlisted Share is £0.17 (2023: £0.17) representing
a receivable to the Group of £26.3m (2023: £26.7m). The movement in the year is all due to certain fully vested but partly
paid and unlisted Shares being paid-up and converted to Ordinary Shares.The amount is included within receivables as this is
repayable on demand.
7. Assets held for distribution
The following investment is held for distribution, being the investment within THG Ingenuity which was demerged on
2 January 2025:
2024
£’000
At 1 January
—
Transfer from fixed asset investments (note 5)
501,331
At 31 December
501,331
190
191
THG PLC Annual Report and Accounts 2024
THG PLC Annual Report and Accounts 2024
Strategic Report
Governance
Financial Statements
Additional Information
Financial Statements
8. Payables: amounts falling due within one year
2024
£’000
2023
£’000
Trade creditors
4,598
1,697
Accruals and deferred income
8,588
5,488
Other taxation and social security
133
135
Onerous contract (note 9)
312
—
Dividend liability
501,331
—
514,962
7,320
A dividend liability has been recognised for the accounting fair value of the asset held for distribution at 31 December 2024 in
THG Ingenuity which was demerged on 2 January 2025. More details are included within note 12.2 of the THG PLC Group notes to
the consolidated financial statements.
The Directors, in accordance with their duties and the relevant provisions of the Companies Act, determined the sufficiency
of the Company’s distributable reserves up to and including the date of completion of the demerger of THG Ingenuity on
2 January 2025.
9. Provisions for liabilities
Onerous
contract
£’000
Total
£’000
At 1 January 2024
—
—
Created
1,001
1,001
At 31 December 2024
1,001
1,001
Current (note 8)
312
312
Non-current
689
689
During the year the implementation of a payroll ERP system was aborted, as such being identified as an onerous contract. As a
result, a one-off provision has been recorded to reflect these unavoidable costs associated with fulfilling the contract. The Group
classifies these expenses as adjusted items, as they do not represent costs incurred in the normal course of business.
10. Share capital and reserves
THG PLC is a public company limited by shares and incorporated in England and Wales. It has a standard listing on the London
Stock Exchange and is the holding company of the Group. The Company has nine classes of shares: Ordinary Shares of £0.005
each, all of which are fully paid; B Shares of £0.005 each, all of which are fully paid; D1 Shares of £0.005 each; D2 Shares of £1
each, all of which are fully paid; E Shares of £0.005 each; F Shares of £0.005 each; G Shares of £0.005 each; Deferred 1 Shares
of £0.005 each, all of which are fully paid; and Deferred 2 Shares of £0.005 each.
As at 31 December 2024, the Company’s issued share capital comprised:
Class
2024
Number
2023
Number
Nominal
value
£ each
Ordinary Shares
1,322,058,529
1,299,700,302
0.005
B Shares
204,081,632
—
0.005
D1 Shares
56,082,651
56,082,651
0.005
D2 Shares
17,066
17,441
1.000
E Shares
48,605,750
48,944,593
0.005
F Shares
26,715,453
27,014,247
0.005
G Shares
16,885,866
17,267,066
0.005
Deferred 1 Shares
323,059
317,613
0.005
Deferred 2 Shares
21,563,860
21,563,860
0.005
1,696,333,866
1,470,907,773
Notes to the Company financial statements continued
During the financial year ended 31 December 2024, the following share
conversions took place in respect of pre-IPO employee share schemes:
(i)
2,339 Ordinary Shares were converted from 742 F Shares and
1,597 G Shares
(ii)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(iii)
16,878 Ordinary Shares were converted from 16,878 E Shares
(iv)
8,717 Ordinary Shares were converted from 3,524 F Shares and
5,193 G Shares
(v)
103,867 Ordinary Shares were converted from 42,474 E Shares,
24,483 F Shares and 36,910 G Shares
(vi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(vii)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(viii)
14,096 Ordinary Shares were converted from 14,096 F Shares
(ix)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(x)
65,000 Ordinary Shares were converted from 65,000 F Shares
(xi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xii)
26,337 Ordinary Shares were converted from 10,572 F Shares
and 15,765 G Shares
(xiii)
20,869 Ordinary Shares were converted from 20,869 E Shares
(xiv)
3,000 Ordinary Shares were converted from 3,000 E Shares
(xv)
13,215 Ordinary Shares were converted from 5,048 F Shares and
8,167 G Shares
(xvi)
16,000 Ordinary Shares were converted from 16,000 F Shares
(xvii)
209,440 Ordinary Shares were converted from 28,786 E Shares
and 180,654 G Shares
(xviii)
14,105 Ordinary Shares were converted from 14,105 E Shares
(xix)
13,095 Ordinary Shares were converted from 13,095 G Shares
(xx)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(xxi)
4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xxii)
1,000 Ordinary Shares were converted from 1,000 E Shares
(xxiii)
17,620 Ordinary Shares were converted from 7,048 F Shares and
10,572 G Shares
(xxiv)
8,000 Ordinary Shares were converted from 8,000 G Shares
(xxv)
2,000 Ordinary Shares were converted from 2,000 E Shares
(xxvi)
15,326 Ordinary Shares were converted from 15,326 F Shares
(xxvii) 80,000 Ordinary Shares were converted from 24,255 E Shares
and 55,745 F Shares
(xxviii) 4,452 Ordinary Shares were converted from 1,855 F Shares and
2,597 G Shares
(xxix)
35,055 Ordinary Shares were converted from 14,096 F Shares
and 20,959 G Shares
(xxx)
35,055 Ordinary Shares were converted from 14,096 F Shares
and 20,959 G Shares
(xxxi)
185,476 Ordinary Shares were converted from 185,476 E Shares
(xxxii) 50,395 Ordinary Shares were converted from 27,792 F Shares
and 22,603 G Shares
Following the receipt from certain Shareholders of valid elections to participate in the demerger of THG Ingenuity from
the Company, 204,081,632 Ordinary Shares were redesignated as B Shares on 30 December 2024. These B Shares were
redesignated as Deferred 1 Shares upon completion of the demerger on 2 January 2025. Further information on the demerger
and the B Shares is included within the circular that was made available to Shareholders on 28 November 2024.
11. Related Party Transactions
The Company has taken exemption under FRS 101 not to disclose transactions with wholly owned subsidiary companies.
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Financial Statements
Additional Information
Additional Information
The Group tracks a number of alternative
performance measures in managing
its business, which are not defined or
specified under the requirements of
IFRS because they exclude amounts
that are included in, or include amounts
that are excluded from, the most directly
comparable measure calculated and
presented in accordance with IFRS, or
are calculated using financial measures
that are not calculated in accordance
with IFRS.
The Group believes that these alternative
performance measures, which are not
considered to be a substitute for or
superior to IFRS measures, provide
stakeholders with additional helpful
information on the performance of the
business. These alternative performance
measures are consistent with how the
business performance is planned and
reported within the internal management
reporting to the Board.
These alternative performance measures
should be viewed as supplemental to,
but not as a substitute for, measures
presented in the consolidated financial
information relating to the Group, which
are prepared in accordance with IFRS.
The Group believes that these alternative
performance measures are useful
indicators of its performance.
However, they may not be comparable
with similarly titled measures reported by
other companies due to differences in the
way they are calculated.
Profit-related APMs frequently
exclude significant recurring business
transactions (e.g. restructuring charges
and acquisition-related costs) that
impact financial performance and
cash flows.
The Audit Committee has reviewed
the overall presentation of APMs to
ensure that these are not given undue
prominence, challenged the nature and
amount of adjusting items and evaluated
the reconciliations used by Management.
In determining whether an item should
be presented as an allowable adjustment
to IFRS measures, the Group considers
items which are significant either
because of their size or their nature,
and which are non-recurring. For an
item to be considered as an allowable
adjustment to IFRS measures, it
must initially meet at least one of the
following criteria:
– It is a significant item.
– It has been directly incurred as a result
of acquisition-related restructuring
and integration costs, transportation,
delivery or fulfilment costs in relation
to a one-off event or as part of the
outcome of the strategic review or
divisional reorganisation.
– It is unusual in nature or linked to a
one-off agreement signed outside of
the normal course of business.
Purpose
The Group uses APMs to improve the
comparability of information between
reporting periods, either by adjusting for
uncontrollable factors or special items
which impact upon IFRS measures.
Their use is driven by characteristics
particularly relevant to THG:
– Adjustments to operating profit –
the Group has a significant non-current
asset base and consequently incurs
a high proportion of depreciation and
amortisation. APMs are used to provide
adjusted measures for users of the
financial statements to evaluate our
operating performance.
– One off events - such as the demerger
and completion of the strategic review
have led to adjusted items which
management do not consider reflect the
ongoing underlying results of the Group.
APM
Closest equivalent
IFRS measure
Adjustments to reconcile to
primary statements
Purpose
Adjusted
gross profit
Gross profit
– Depreciation
– Amortisation
See following pages for reconciliation.
To show gross profit before depreciation and
amortisation charged due to its nature to aid
comparability.
Adjusted
distribution
costs
Distribution
costs
– Adjusted items
– Depreciation and amortisation
See following pages for reconciliation.
To show distribution costs before adjusted items
and depreciation and amortisation charged due
to their nature to aid comparability.
Adjusted
administrative
expenses
Administrative
expenses
– Adjusted items
– Depreciation and amortisation
– Share-based payments
See following pages for reconciliation.
To show administrative expenses before
adjusted items and depreciation and
amortisation charged due to their nature
to aid comparability.
Adjusted
amortisation
Amortisation
– Amortisation on acquired
intangibles (Adjusted items)
See following pages for reconciliation.
To show amortisation before the impact of
the amortisation of acquired intangibles to aid
comparability.
Adjusted
operating
profit
Operating profit
– Adjusted items
To show operating profit before adjusted items
due to their nature to aid comparability.
Alternative performance measures (“APMs”)
APM
Closest equivalent
IFRS measure
Adjustments to reconcile to
primary statements
Purpose
Adjusted
EBITDA
Operating profit
– Adjusted items
– Depreciation and amortisation
– Share-based payments
– Other operating expense –
non‑cash loss on disposal freehold
assets
See the Chief Financial Officer's
Review for a reconciliation.
EBITDA is a useful measure for investors
because it is a measure closely tracked by
Management to evaluate THG's operating
performance and to make financial, strategic and
operating decisions and may help investors to
understand and evaluate, in the same manner
as Management, the underlying trends in
operational performance on a comparable basis
year on year.
Share-based payment costs are added back,
following the launch of the share-based
payment scheme in the year, and Management
consider these to be outside of the underlying
day-to-day operations. Given the material size of
these charges they are removed from underlying
Adjusted EBITDA.
Pre-demerger
EBITDA
Operating profit
– Adjusted items
– Depreciation and amortisation
– Share-based payments
– EBITDA from discontinued
categories
See following pages for reconciliation.
To disclose adjusted EBITDA as this would have
been reported before the demerger occurred.
Post-
demerger
Adjusted
EBITDA
Operating profit
– Adjusted items
– Depreciation and amortisation
– Share-based payments
– EBITDA from discontinued categories
– Discontinued operations – THG
Ingenuity
See following pages for reconciliation.
To disclose adjusted EBITDA as this will be
reported following the demerger from FY25
onwards.
Free cash
flow
Cash flow
– Debt (repayments)/proceeds
– Acquisition cash flows
– In respect of FY 2023, a cash
receipt remitted from HMRC
to the Group
Refer to note 25 for further detail.
Free cash flow is a useful measure that is
closely tracked by Management in order to
evaluate and assess the profitability of the
business. The free cash flow calculation is
routinely reviewed by Management and forms
the basis of strategic decisions made in respect
of working capital management.
Net (debt)/
cash before
lease
liabilities
Cash
– Loans and other borrowings
– Foreign exchange (retranslate debt
balance at swap rate where hedged
by foreign exchange derivatives)
– Lease liabilities
See the Chief Financial Officer's
Review for a reconciliation.
To show the cash balance after the deduction
of the loans and other borrowings balances
but before lease liabilities are deducted and
after retranslation of debt balance at swap rate.
This measure is tracked by Management when
reviewing liquidity and the indebtedness of the
Group which is then used to drive any strategic
or acquisition-related decisions.
Net debt
Cash
– Loans and other borrowings
– Foreign exchange (retranslate debt
balance at swap rate where hedged
by foreign exchange derivatives)
See the Chief Financial Officer's
Review for a reconciliation.
To show the cash balance after the deduction
of the loans and other borrowings balances and
after retranslation of debt balance at swap rate.
This measure is tracked by Management when
reviewing liquidity and the indebtedness of the
Group which is then used to drive any strategic
or acquisition-related decisions.
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Governance
Financial Statements
Additional Information
Additional Information
The definitions set out below apply throughout this document, unless the context requires otherwise.
Term
Meaning
2022 AGM
the annual general meeting of the
Company held on 10 June 2022
2024 AGM
the annual general meeting of the
Company held on 24 June 2024
2023 Annual
Report
the Annual Report and Accounts of the
Company in respect of the financial year
ended 31 December 2023
2018 Code
the UK Corporate Governance Code (July
2018), published by the FRC and applicable
to financial years beginning prior to 1
January 2025
2024 Code
the UK Corporate Governance Code
(January 2024), published by the FRC and
applicable to financial years beginning on
or after 1 January 2025
2030
Sustainability
Strategy
the Group’s Sustainability Strategy, THG
x Planet Earth, for a better, sustainable
future with targets centred around three
key priorities: (i) protecting climate and
nature; (ii) strengthening our supply chain
and circularity; and (iii) empowering people
and communities
Active
Customers
customers who have purchased at least
once within the period
Adjusted
EBITDA
the non-GAAP measure which is defined
as Earnings Before Interest, Taxes,
Depreciation, Amortisation, share-based
payments, SaaS change in accounting
policy and adjusting items as detailed
in note 4 of the financial statements
contained within this Annual Report
Pre-demerger
Adjusted
EBITDA
the non-GAAP measure which is defined
as Earnings Before Interest, Taxes,
Depreciation, Amortisation, share‑based
payments, adjusting items and
discontinued categories in respect of THG
Beauty, THG Nutrition and THG Ingenuity
net of central costs
Post-
demerger
Adjusted
EBITDA
the non-GAAP measure which is
defined as Earnings Before Interest,
Taxes, Depreciation, Amortisation,
share‑based payments, adjusting items
and discontinued categories in respect
of THG Beauty and THG Nutrition net of
central costs
Term
Meaning
Admission
the admission of the Ordinary Shares to
both the standard listing segment of the
Official List of the FCA and the London
Stock Exchange’s main market for listed
securities, which took place on or around
16 September 2020
AGM
the annual general meeting of the
Company that will be held on 25 June
2025
Annual Report
this Annual Report and Accounts of the
Company in respect of the financial year
ended 31 December 2024
AOV
Average Order Value
ASP
Average Selling Price
Articles of
Association
the Articles of Association of the Company,
as adopted by special resolution on 9
September 2020
B2B
business to business
Bentley
Bentley Laboratories LLC, an innovative
developer and manufacturer of prestige
skincare and haircare products that was
acquired by THG on 15 June 2021
Board
the board of directors of the Company from
time to time
Board
Committees
the Company’s Board-constituted
committees i.e. the Audit Committee, the
Nomination Committee, the Related Party
Committee, the Remuneration Committee,
the Risk Committee and the Sustainability
Committee, and "Board Committee(s)"
means any, or a combination, of them as
the context requires
B Shares
following the receipt from certain
Shareholders of valid elections to
participate in the demerger of THG
Ingenuity from the Group, 204,081,632
Ordinary Shares were redesignated as B
Shares on 30 December 2024, and these
B Shares were subsequently redesignated
as Deferred 1 Shares upon completion of
the demerger on 2 January 2025 (further
information on the demerger and the B
Shares is included within the circular that
was made available to Shareholders on 28
November 2024)
Glossary
Term
Meaning
Chair or
Independent
Chair
Charles Allen, Lord Allen of Kensington, CBE,
independent non-executive chair of the
Company, appointed on 22 March 2022
Chief
Executive
Officer or CEO
Matthew Moulding, the Company’s Chief
Executive Officer and co-founder
Chief
Financial
Officer or CFO
Damian Sanders, the Company’s Chief
Financial Officer
Chief
Operating
Officer or
COO
John Gallemore, the Company’s former
Chief Operating Officer and co‑founder
Code
the 2018 Code or the 2024 Code, as the
context requires
Companies
Act
the Companies Act 2006 (as amended
from time to time)
Company
THG PLC, a public limited company
incorporated in England and Wales with
registered number 06539496, whose
registered office is at Icon 1, 7-9 Sunbank
Lane, Ringway, Altrincham, United Kingdom
WA15 0AF
Company
Secretary
James Pochin, the Company Secretary of
THG PLC
Constant
currency
without taking into account fluctuations in
the exchange rate; therefore showing the
figures as if the exchange rate remained
constant
Covid-19
the disease caused by Severe Acute
Respiratory Syndrome Coronavirus 2,
responsible for the global pandemic that
has impacted the Group’s operations
Cult Beauty
Cult Beauty Limited, the UK-based online
beauty retailer of prestige and emerging
independent brands that was acquired by
THG on 3 August 2021
D1 Shares
the D ordinary shares of £0.005 each in
the capital of the Company, having the
rights and being subject to the restrictions
set out in the Articles of Association
D2 Shares
the D ordinary shares of £1.00 each in the
capital of the Company, having the rights
and being subject to the restrictions set
out in the Articles of Association
Term
Meaning
D2C
direct to customer
Deferred 1
Shares
the deferred 1 shares of £0.005 each in the
capital of the Company, having the rights
and being subject to the restrictions set
out in the Articles of Association
Deferred 2
Shares
the deferred 2 shares of £0.005 each in
the capital of the Company, having the
rights and being subject to the restrictions
set out in the Articles of Association
Dermstore
Dermstore LLC, the pure play online
prestige skincare business that was
acquired by THG on 2 February 2021
Directors
the directors of the Company from time to
time and “Director” means any one of them
Disclosure
Guidance and
Transparency
Rules or DTRs
the Disclosure Guidance and Transparency
Rules made by the FCA under Part VI of
the Financial Services and Markets Act
2000 (as amended from time to time)
EDI
equity, diversity and inclusion
Employee
Incentive Plan
the employee incentive plan that was put
in place during the financial year ended 31
December 2022 and under which Ordinary
Share awards are made to certain key
employees below the level of the Executive
Leadership Team
ESCC
category
the equity shares (commercial companies)
category of listing pursuant to UKLR 1.5.1
ESG
environmental, social and corporate
governance factors which are non‑financial
and are used in assessing the sustainability
and societal impact of the Group and its
value chain
EU
the European Union
E Shares
the E ordinary shares of £0.005 each in the
capital of the Company, having the rights
and being subject to the restrictions set
out in the Articles of Association
Executive
Leadership
Team
collectively, those individuals holding
executive management positions within the
Company
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Financial Statements
Additional Information
Additional Information
Additional Information
Term
Meaning
Executive
Directors
the executive directors of the Company
from time to time, being the Chief
Executive Officer and the Chief Financial
Officer at the date of this Annual Report,
and “Executive Director” means any one of
them
EY or External
Auditor
Ernst & Young LLP, the Group’s statutory
auditor
FCA
the Financial Conduct Authority
FMCG
fast moving consumer goods
FRC
the Financial Reporting Council
F Shares
the F ordinary shares of £0.005 each in the
capital of the Company, having the rights
and being subject to the restrictions set
out in the Articles of Association
GAAP
Generally Accepted Accounting Principles
GDPR
the General Data Protection Regulation
(EU) 2016/679
General
Counsel
James Pochin, the General Counsel of the
Company
GHG
greenhouse gas or greenhouse gases, as
the context requires
Group or THG
the Company and its subsidiaries and
subsidiary undertakings from time to time
G Shares
the G ordinary shares of £0.005 each in
the capital of the Company, having the
rights and being subject to the restrictions
set out in the Articles of Association
H1 2024
the six-month period from January 2024 to
June 2024
H Shares
the H ordinary shares of £0.005 each in
the capital of the Company, having the
rights and being subject to the restrictions
set out in the Articles of Association
IAS
International Accounting Standards
IFRS
International Financial Reporting Standards
IPO
the initial public offering of Ordinary Shares
by the Company in September 2020
KPI
key performance indicator
London Stock
Exchange
the London Stock Exchange PLC or its
successor
Term
Meaning
LTIP
any long-term incentive plan operated by
the Company from time to time
M&A
mergers and acquisitions
Management
or Senior
Management
the direct reports of the Executive
Leadership Team
NEDs
the non-executive directors of the
Company from time to time, and “NED”
means any one of them
Notice of
Meeting
the notice of AGM circulated to
Shareholders on or around the date of
posting of this Annual Report
NPD
new product development
Official List
the FCA’s list of securities that have been
admitted to listing
Ordinary
Shares
means the voting ordinary shares of
£0.005 each in the capital of the Company,
having the rights and being subject to
the restrictions set out in the Articles of
Association
Perricone MD
Perricone MD, the US prestige skincare
brand that was acquired by THG on 29
September 2020
Propco Group
Moulding Capital Limited (formerly
Kingsmead Holdco Limited), a company
incorporated in Guernsey (registered
no. 51762), whose registered office is at
PO Box 296, Regency Court, Glategny
Esplanade, St Peter Port, Guernsey GY1
4NA (“Propco”), and its subsidiaries from
time to time, which together hold certain
property assets that are used or occupied
by THG under leases between the
relevant Group company and the relevant
subsidiaries of Propco
Propco
Transaction
the sale of the Propco Group prior to
Admission to Moulding Group Limited
(formerly FIC Holdings Limited), which is
wholly owned by Matthew Moulding, the
CEO
RCF
revolving credit facility
Related Party
Transaction
a transaction, arrangement or relationship
in respect of which the Company, or any
of its subsidiaries, will be a participant and
where any related party has a direct or
indirect interest
Term
Meaning
Remuneration
Policy
the Shareholder-approved policy which
sets out the remuneration arrangements
for Directors (as amended from time
to time)
SaaS
software as a service
SBTi
the Science Based Targets initiative, the
global body enabling businesses to set
emissions reduction targets in line with
climate science
Section 172
section 172 of the Companies Act which
relates to the duty of a company’s directors
to promote the success of the company
Sedex
Supplier Ethical Data Exchange
Shareholder
a holder of Ordinary Shares
Shares
together the Ordinary Shares, B Shares,
D1 Shares, D2 Shares, E Shares, F Shares,
G Shares, H Shares, Deferred 1 Shares and
Deferred 2 Shares or any, or a combination,
of them as the context requires
SID
the Board’s senior independent NED,
currently Sue Farr who was appointed on
24 April 2023
TAM
Total Addressable Market
TCFD
the Task Force on Climate-related Financial
Disclosures, a framework to help public
companies and other organisations more
effectively disclose climate-related risks
and opportunities through their existing
reporting processes
THG Beauty
a key business of the Company relating
to beauty products, commerce and
distribution
THG Eco
the Company’s sustainability solutions
business
THG
Experience
the prestige event and experience venues
included within the THG Beauty business
in support of the Group’s influencer
marketing
THG Ingenuity
The Hut.com Limited, a company
incorporated in England and Wales with
registered number 05016010, whose
registered office is at Icon 1, 7-9 Sunbank
Lane, Ringway, Altrincham, United Kingdom
WA15 0AF
Term
Meaning
THG Luxury
the Company’s luxury fashion retail
included within the THG Beauty business
which was sold during 2024
THG Nutrition
a key business of the Company relating
to nutritional products, commerce and
distribution
THG
OnDemand
the Company’s business unit offering
personalisation and customisation to a
range of consumers via online platforms –
this business unit was sold during FY 2023
THG Studios
the Company’s business unit which
produces digital content and included
within the THG Ingenuity business
Transition
category
the equity shares (transition) category of
listing pursuant to UKLR 1.5.1
UK Listing
Rules or
UKLRs
the rules published by the FCA, as
contained in the UK Listing Rules
sourcebook (as part of the FCA Handbook),
laying down minimum requirements for
the admission of securities to the Official
List and the continuing obligations of listed
issuers
YoY
year on year
Glossary continued
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Financial Statements
Additional Information
Notes
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THG PLC
(Company number: 06539496)
Icon 1
7-9 Sunbank Lane
Ringway, Altrincham
UK
WA15 0AF
thg.com