THG, the e-commerce firm that owns brands such as Cult Beauty, Lookfantastic, and Myprotein, warned on profits today as it announced the sale of its Claremont Ingredients business to Nactarome Group for around £103m in cash.
Claremont is a leading flavour manufacturing and development laboratory for sports nutrition, alongside specialisms in bakery and beverages. THG acquired the business with the aim of accelerating the growth of its Myprotein brand and developing new products.
The company noted that the sale marks a significant return on investment for the business, having paid £52m for Claremont in 2020. It stated that cash disposal proceeds will contribute to reducing net leverage and borrowing costs, in line with its capital allocation strategy of targeting a neutral net cash/net debt position.
THG stated that following the disposal, its group FY 2025 and FY 2026 EBITDA would be reduced by around £5m and £10m respectively.
Ahead of its interim results in September, the group stated that it now expects first-half adjusted EBITDA of around £24m, down from £37.1m in the same period a year earlier, primarily due to “substantially higher” whey pricing year-over-year in its Nutrition unit.
“Claremont has been a huge success, building Myprotein’s global licensing franchise from a standing start to partnering with category-leading brands in just a few years,” said Chief Executive Matthew Moulding.
“After receiving a highly competitive offer, the timing was right to realise that value. The level of interest we received is a testament to the quality of the business.
“This disposal highlights the significant value embedded across THG’s portfolio. My sincere thanks go to the entire Claremont team for their fantastic contribution and hard work.
“Finally, the decisions we are taking as a business to support our customers and grow Myprotein’s market share aligns clearly with our wider strategy to streamline the group and focus on our core strengths, whilst maintaining a strong balance sheet.”
