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(Sharecast News) - THG warned on profits on Wednesday as it announced the sale of its Claremont Ingredients business to Nactarome Group for around 103m in cash.
Flavour specialist Nactarome is majority-owned by TA Associates. THG said the sale marks a significant return on investment for the group, which paid 52m for Claremont in 2020.
Cash disposal proceeds will contribute towards reducing net leverage and borrowing costs in line with the company's capital allocation strategy targeting a neutral net cash/net debt position.
THG also said that following the disposal, group FY 2025 and FY 2026 earnings before interest, tax, depreciation and amortisation are expected to be reduced by around 5m and 10m respectively.
Ahead of its interim results in September, the group said it expects first-half adjusted EBITDA of around 24m, down from 37.1m in the same period a year earlier, mainly due to "substantially higher" whey pricing year-on-year in Nutrition.
Chief executive Matthew Moulding said: "Claremont has been a huge success, building Myprotein's global licensing franchise from a standing start to partnering with category leading brands in just a few years.
"After receiving a highly competitive offer, the timing was right to realise that value. The level of interest we received is a testament to the quality of the business.
"This disposal highlights the significant value embedded across THG's portfolio. My sincere thanks go to the entire Claremont team for their fantastic contribution and hard work."
"Finally, the decisions we are taking as a business to support our customers and grow Myprotein's market share aligns clearly with our wider strategy to streamline the group and focus on our core strengths, whilst maintaining a strong balance sheet."
At 0915 BST, the shares were down 1.4% at 30.16p.
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