THG revenues soar, says both Beauty and Ingenuity are strong
Under-pressure THG issued a Q3 trading statement on Tuesday and said that revenue continues to soar. Group revenue rose 38% year-on-year to £507.8 million and that meant growth of 93.8% on a two-year, constancy-currency basis.
The firm also said that 2022 its Ingenuity Commerce revenue expectations have increased by 20%-25% to a range of £108 million to £112 million. That's hugely important for the company that's placing a lot of its focus on growth at the Ingenuity unit.
For now though, beauty is the key category fo the firm. And in the three months to September 30, THG Beauty revenue rose by 57.2% to reach £247.6 million. That was an increase of almost 130% on a two-year basis.
Ingenuity — which houses Ingenuity Commerce and is the tech tech solution that helps brands get online easily — saw Q3 revenue rising 44.1% to £51.1 million.
Its beauty ops and its Ingenuity unit are clearly closely linked. The company said that after its August Cult Beauty buy, the brand “has been successfully migrated to the Ingenuity platform ahead of schedule, delivering immediate improvements including a 30% uplift in conversion rates, a 6% uplift in average order values, a 36% improvement in page load times and lower technology costs to serve”. A highlight post re-platforming “has been the success of the Cult Beauty Advent calendar which sold over 11,500 units in two hours with no website downtime”.
Meanwhile, at Ingenuity Commerce, “momentum continued to build during the third quarter, with reported revenue growth of 131% year-on-year, with a record number of clients acquired in the quarter (up 50% vs Q2 2021)”.
The 44 new clients won in Q3 cover a broad range of consumer sectors and are on board with agreements of between three and 10 years. The company’s offer includes a variety of options such as re-platforming them from existing technology solutions, undertaking new market launches, and offering fulfilment-only services, in addition to end-to-end services. It’s also entering new areas such as supporting Kao Group, the Japanese conglomerate, with a five-year multi-brand, multi territory rollout in the UK and abroad. That Kao deal also includes Molton Brown.
THG also said that 59% of Ingenuity’s revenue was recurring in the third quarter, up from 55% in the prior quarter. That was clearly designed to soothe investor concerns that too much of ingenuity’s revenue is non-recurring, such as webstore start-up costs.
And the company also appointed a new non-executive director: SoftBank MD Dr Andreas Hansson. Softbank is a key investor and there had been worries that it was getting cold feet over its future commitment to the business. But the new appointment appears to contradict that.
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