THG PLC (LSE: THG) has divested two of its subsidiary businesses, accruing approximately £4 million in the process. This includes the sale of ProBikeKit, a provider of cycling gear, to Frasers Group PLC (LSE: FRAS), a company owned by Mike Ashley.
In addition, THG, also known as the Hut Group, has transferred its OnDemand personalisation and customisation division to its management team. The management buy-out was financially backed by advisory and investment firm Gordon Brothers, and OnDemand will persist as a client of THG Ingenuity’s tech, operational and digital services.
OnDemand, along with other ‘discontinued categories’, led to an underlying EBITDA loss of around £14.6 million last year, with OnDemand’s sales experiencing a 17% drop. However, the group’s free cash flow remained in the negative for the 12 months ending on June 30, 2023, but was “ahead of expectations”, according to THG. This figure is around £40 million, even after accounting for the revenue from selling non-core freehold property assets.
Matthew Moulding, the CEO of THG, described OnDemand as a nurturing division that has “cultivated our talent, technology and trading strategies” over time. He emphasized the continuing relationship with the OnDemand management team and the Frasers Group, stating, “We will remain close partners… through continued Ingenuity services.”
It’s noteworthy that THG originally acquired ProBikeKit from Encore Capital in 2013.
