Tue. May 24th, 2022

THG said profit margins for 2021 would miss analysts’ forecasts, but the UK e-commerce group expects them to recover this year.

Margins before interest, tax, depreciation and amortization will be 7.4 to 7.7 per cent against market expectations of around 7.9 per cent, mainly due to exchange rate fluctuations, the Manchester-based group said on Tuesday.

It added that margins should improve throughout 2022 as investment in automation and new customer gains counteract inflationary pressures, although this will be weighed after the second half of the year.

THG shares tumbled at the end of 2021 when investors questioned the prospects for its Ingenuity division and criticized the group’s disclosure. The shares have lost more than 75 percent of their value over the past 12 months.

The group responded by promising to appoint an independent chairman and to scrap a “special share” structure that gives co-founder and CEO Matthew Molding the power to veto hostile takeovers.

Sales to the group in the fourth quarter were £ 711 million, 27 per cent higher than last year, although it was boosted by acquisitions. Revenue at Ingenuity, the e-commerce technology business that has been the subject of market interest over the past year, has risen by 41 percent.

Molding said in Tuesday’s statement that the new year had started well and the group remained confident.

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