THG Mulls Logistics Unit Spinoff, Pretax Loss Narrows

THG weighing up options for logistics business

THG, the British online retailer, is exploring a spin-off of its logistics unit, Ingenuity, as it seeks to unlock value and focus on its core e-commerce operations. The move comes as THG reported a narrowing of its pretax loss for the first half of the year, boosted by strong growth in its beauty and nutrition divisions.

Ingenuity a key part of THG's operations

Ingenuity is a key part of THG's operations, providing logistics and fulfillment services to the group's e-commerce businesses. However, THG has been under pressure from investors to improve its profitability, and a spin-off of Ingenuity could help the group to focus on its core operations and improve its margins.

A number of options being considered

THG is considering a number of options for Ingenuity, including a sale, a joint venture, or a spin-off. A sale would allow THG to realize the value of Ingenuity and focus on its core e-commerce operations. A joint venture could allow THG to retain some control over Ingenuity while sharing the costs and risks of operating the business. A spin-off would create a separate listed company for Ingenuity, allowing THG to unlock the value of the business while retaining a stake.

Pretax loss narrows as revenue grows

In addition to exploring options for Ingenuity, THG also reported a narrowing of its pretax loss for the first half of the year. The group's pretax loss for the six months to June 30 narrowed to £109.6 million from £140.7 million in the same period last year. Revenue grew by 18% to £1.1 billion, driven by strong growth in the beauty and nutrition divisions.

Beauty and nutrition divisions drive growth

The beauty division grew by 22% to £522.5 million, while the nutrition division grew by 17% to £284.1 million. The group's other divisions, including fashion and home, also reported growth, but at a slower pace.

THG shares rise on news

Shares in THG rose by more than 5% in early trading on the news. The group's shares have been under pressure in recent months, but the latest results and the news of the potential Ingenuity spin-off have boosted investor sentiment.