THG, the London-listed firm behind fitness supplement brand Myprotein, has announced the sale of flavour manufacturing and development lab Claremont.
The company will sell Claremont for £103m to international flavour specialist, Nactarome Group, having purchased the business for £52m in late 2020.
City AM is part of THG Ingenuity, which was demerged from THG at the beginning of the year.
CEO Matthew Moulding said the “time was right” to sell Claremont, adding that the My Protein-maker will retain a long-term supply contract with the lab.
“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,” Moulding said.
The cash disposal proceeds from the sale will contribute towards reducing net leverage and borrowing costs at THG.
Earnings in 2025 and 2026 will be reduced by £5m and £10m respectively, following the sale.
Higher whey prices affect earnings
Alongside the sale of Claremont, THG announced that half year earnings before interest, tax, depreciation and amortisation (EBITDA) fell from £37.1m to £24m.
The company said this “primarily reflect[ed] substantially higher whey pricing year on year.”
“Whey commodity prices have remained stable at record highs during the last 12 months, with strong global demand matching new supply capacity, leading to market wide nutrition consumer price increases,” THG said.
THG Nutrition delivered double-digit revenue growth in June and July, with 10 per cent to 12 per cent revenue growth expected in the second half of the year.
The revenue growth rate at THG Beauty has “improved”, the company added.
“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,” Moulding said.