THG sells Claremont ingredients business, limits Myprotein price hikes, and aims to bolster balance sheet

THG sells Claremont ingredients business to Nactarome Group for £103m in a bid to reduce debt and bolster its balance sheet. The company will also limit price hikes within its Myprotein nutrition business to boost market share despite the impact of record high whey prices. THG has been working to simplify the business, having sold off Ingenuity unit earlier this year.

THG PLC (GB:THG) has announced the sale of Claremont Ingredients, a UK-based flavour manufacturing and development laboratory, to Nactarome Group for approximately £103 million. This strategic move aligns with THG's objective to simplify its operations and achieve a net cash balance sheet [1].

The sale represents a significant return on investment for THG, as Claremont was originally acquired for £52 million in 2020. Financially, the disposal will aid in reducing THG's net leverage and borrowing costs. Operationally, the relationship with Claremont will continue through a long-term supply contract, ensuring Myprotein's flavour capabilities remain robust [1].

The transaction is expected to impact THG's EBITDA in the coming years. However, the company anticipates double-digit revenue growth for THG Nutrition in the second half of 2025, driven by stable whey prices and strategic pricing approaches to enhance market share [1].

In related news, THG has been working to simplify the business, having sold off Ingenuity unit earlier this year. The company has also indicated that it will limit price hikes within its Myprotein nutrition business to boost market share despite the impact of record high whey prices [1].

The most recent analyst rating on GB:THG stock is a Sell with a £0.49 price target. According to Spark, TipRanks’ AI Analyst, GB:THG is a Neutral, impacted by financial challenges and valuation concerns. Continued focus on operational improvements is necessary for better performance [1].

The recent earnings call for The Hanover Insurance Group (THG) highlighted a period of "extraordinary progress," with a record operating ROE of 18.7% and operating earnings of $4.35 per diluted share, with earnings growth of approximately 25% on an ex-CAT basis [2].

Management projects net written premium growth of "6% to 7% range for the second half of 2025," supported by the company’s disciplined underwriting, targeted pricing strategies, and strategic investments in AI and workflow automation [2].

The company expects growth of net written premiums to be in the 6% to 7% range for the second half of 2025, with a combined ratio of 92.5% for the quarter [2].

References:
[1] https://www.tipranks.com/news/company-announcements/thg-plc-divests-claremont-ingredients-for-103-million
[2] https://seekingalpha.com/news/4476345-hanover-signals-6-percentminus-7-percent-net-written-premium-growth-for-h2-2025-supported-by