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THG

Thg PLC

Personal Care, Drug and Grocery Stores First-pass screen £510m
300/1000 Overall fit
AI beneficiary 35% 30
Operating leverage 25% 30
Valuation 25% 30
Downside protection 15% 28

First-pass take

THG is e-commerce retail (beauty, nutrition) with no explicit AI revenue exposure; gross margins declined 150bps and adjusted EBITDA fell 35% YoY from commodity costs and FX headwinds. Net debt of £321m (~13x adjusted EBITDA) constrains downside protection given continuing losses, though management guidance indicates H2 recovery across both divisions.

Flags

loss-makingnet-debthigh-leveragecyclicalmargin-pressurecommodity-exposedcurrency-headwind