THG reposted this
Founder & CEO at THG | Building a global giant from the UK
“What if we don’t raise the money now?” said Steve Whitehead yesterday at 7.30am. We'd announced to a group of c30 investors our plans to raise monies to fund the demerger of THG Ingenuity from THG PLC (which in plain English means taking Ingenuity back to being a private company). You get little insight into how deals like these come together. They're lively affairs, involving an incredible amount of effort, stress and strain over months. It then comes down to a 24-hour period where investors decide to back a plan…or not. Ingenuity is a serious business, with c4,000 staff across the world delivering c£600m of revenues across tech, fulfilment and content solutions for many of the world’s best-known brands. Since starting THG, any profits and cash we’ve made from our Beauty & Nutrition businesses have been relentlessly reinvested into building Ingenuity. The benefits are clear - in the past few years alone, fulfilment costs in Beauty & Nutrition have plummeted by c20% despite high inflation, saving THG c£80m a year. All our external clients are leveraging these savings too, explaining the growing list of major client wins. It's clear that the LSE isn't a place for a tech/infrastructure business like Ingenuity. It's been a volleyball for rogue operators to hit when looking for a quick win. And so, after over 4 years, it’s time for a change. After months of background work, THG’s Board recently agreed to privatise Ingenuity, while also ensuring it was fully funded for life as a private company. This meant raising c£95m via a placing, which mainly goes to Ingenuity when it breaks away from THG in December. THG’s list of long-time backers, agreed to provide most of the money, with me investing a further £10m. This takes my share purchases in THG to £50m since IPO…..a bizarre concept given IPO's are a route for founders to sell shares NOT to keep buying more 🙈🤣 The demerger means our Beauty & Nutrition divisions, which are highly profitable and generate significant cash each year, will solely make up THG PLC. In 2023, these divisions generated Sales of c£1.9bn, profits of £105m and cash of c£77m. Instead of reinvesting this cash back into Ingenuity each year, THG will now use the cash however it chooses. Given that me and long-term supporters of THG had already pledged most of the monies before we launched the fundraise, we knew it would be fine. But Steve’s real question was “What will people think of the deal?”. The deal was 4 x oversubscribed from the small group of investors we spoke with. This speaks volumes. When allocating shares late last night, we made sure that orders from real people, real supporters were favoured. Thank you to our shareholders, Board, THG people and wider stakeholders alike. It’s good to finally make some moves. Let's hope this it's just the start 🙏 Pic is this morning, just before we did the investor/analyst call: Bobby Finemore Kate Grimoldby John Gallemore #Onwards #Moves #Partnerships