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E-commerce play slides to new lows as latest trading update delivers more bad news
Thursday 20 Jan 2022 Author: Tom Sieber

Online cosmetics and health products seller THG (THG) continued to suffer large share price declines, with investors giving the thumbs down to its latest trading update
(18 Jan).

At face value, revenue growth of 38% for 2021 looked impressive. However, markets are forward-looking and guidance for growth to slow to between 22% and 25% in 2022 didn’t go down well. The company also said margins for 2021 would come in slightly below expectations.

At 169.7p, THG trades well below its all-time high of 837p hit in January 2021 and the 500p price at which it joined the stock market.

THG seems to have found it difficult to adjust to the demands
of being a public company, including managing expectations effectively and getting its corporate governance on point.

In November 2021 the company endured a disastrous investor day centred on its Ingenuity platform, a logistics and e-commerce platform sold to third parties which had generated much of the excitement around the group.

The market was apparently frustrated by a lack of detail and clarity on Ingenuity, with founder and CEO Matthew Moulding’s response to hand over a conspiracy dossier to the Financial Conduct Authority alleging hedge funds and stockbrokers colluded to drive down the share price.

Against this backdrop it would not be a surprise to see Moulding follow through on hints he might take the business private.

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