Investors Back THG’s Plan for Loss-Making Tech Arm Divestment
- THG shareholders approve Ingenuity split
- 89% of investors back the plan
- Ingenuity ecommerce platform to become separate company
- Valuation of £90m for technology arm
- Ingenuity provides tech support for retailers like The Range and Holland & Barrett
- 13 warehouses across UK
- £95.4m funding round raised, £55m debt secured for Ingenuity operations
- Improved balance sheet and cash-flow profile for THG
- Technology division narrows losses from £227.6m to £140.9m in FY21
THG shareholders have voted in favor of spinning off its loss-making Ingenuity ecommerce platform into a separate company. Around 89% of investors backed the LookFantastic and MyProtein owner’s divestment of its technology arm at a valuation of £90m on Friday. Ingenuity, which employs about 3,500 people, provides technology to support online operations for retailers including The Range and Holland & Barrett. THG launched a funding round to raise £95.4m and secured a debt funding of £55m, which it said will be used to fund Ingenuity until its operations are no longer loss-making. THG stated that the demerger simplifies its business model as a free cash-flow generative consumer, beauty, and nutrition group with an improved balance sheet, capital expenditure, and cash-flow profile. The board believes there is a significant opportunity to create value for shareholders by demerging Ingenuity into a separate private company with no public listing or other trading facility for the Ingenuity shares.
Factuality Level: 8
Factuality Justification: The article provides accurate and relevant information about THG’s decision to spin off its Ingenuity ecommerce platform into a separate company, the percentage of shareholders in favor, the valuation, the number of employees, the purpose of the demerger, and the reduction in losses. However, it lacks some details on the specific reasons behind the decision and the impact on THG’s future operations.
Noise Level: 3
Noise Justification: The article provides relevant information about THG’s decision to spin off its loss-making Ingenuity ecommerce platform into a separate company and the reasons behind it. It also mentions the support from shareholders and the funding raised for Ingenuity. However, it lacks in-depth analysis or exploration of long-term trends or consequences of this decision.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses THG’s plan to spin off its loss-making Ingenuity ecommerce platform into a separate company, and the impact on the business model of the parent company. It also mentions a funding round to raise £95.4m for Ingenuity. However, there is no direct mention of financial markets or specific companies being impacted.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text and it doesn’t meet the criteria of an extreme event happening in the last 48 hours.
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