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THG PLC on Wednesday highlighted strong free cash flow progress, and backed full-year sales and earnings guidance despite ‘unprecedented’ whey price inflation. Ahead of Wednesday’s annual general meeting, the Manchester, England-based online retailer of sports nutrition and beauty products said sales rose 6.5% in the first half of 2026 at constant currency compared to a 2.5% decline the year prior. THG forecast adjusted earnings before interest, tax, depreciation and amortisation of at least £40 million, up 95% on-year adjusting for the sale of Claremont Ingredients which was sold last September. It said last 12 months adjusted Ebitda to May was £94 million, up from £68.9 million to May 2025, driven by ‘disciplined cost management, gross margin maintenance and targeted category expansion’. First half free cash flow is expected to be the strongest since 2021. As a result, THG expects full-year revenue and adjusted Ebitda to be in line with company consensus for £1.80 billion and £101.7 million respectively. Chief Executive Matthew Moulding said the ‘strong’ earnings growth was delivered despite the ‘broader macroeconomic backdrop, including unprecedented whey commodity inflation levels.’ THG Beauty revenue growth was underpinned by a strong skincare performance, up 9.2% year-to-date, with the Lookfantastic brand supported by new brand launches and a ‘growing active customer base’. THG Nutrition, which includes MyProtein, sales growth continued across online and offline channels with an ongoing mix shift towards gross margin accretive products and categories helping to mitigate ‘highly elevated’ whey input costs alongside ‘strategic’ pricing. THG said Myprotein will enter the energy, protein water, and breakfast markets in the second half of the year, broadening its ‘addressable market and share of convenience spend’. CEO Moulding said Myprotein is ‘reaching more consumers than ever’. Year-to-date unit growth of 60% has been underpinned by ‘our rapid retail expansion and category diversification’, he said, noting around 18% of direct-to-consumer customers purchased activewear in May. The FTSE 250-listing said it is still waiting for a response from HMRC on a possible VAT refund of around £78 million. The firm has made a retrospective claim for VAT which it has charged on powdered protein and collagen products and certain supplements in line with HMRC guidance. However, THG has pointed out a number of competitors have chosen to zero rate some products for VAT purposes, while a First Tier Tribunal ruling said that Sunwarrior protein powders qualify for 0% UK VAT. Earlier in the year, the Upper Tribunal dismissed HMRC’s right to appeal. ‘The group, along with the wider nutrition industry, awaits a substantive response from HMRC, which has indicated it will provide in late Spring 2026, but this has not yet been received,’ the firm said. Shares in THG were flat at 30.86 pence on Wednesday morning in London. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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