THG secures 17-month extension to revolving credit facility

4th Mar 2024 08:40

(Sharecast News) - THG announced the extension of its revolving credit facility (RCF) by 17 months on Monday, stretching its maturity to May 2026.

The London-listed e-commerce firm, formerly known as The Hut Group, said the facility, amounting to £170m, had remained untapped since its initial public offering (IPO).

It said no alterations were slated for the financial covenants or interest margin beyond the current maturity date.

However, come December, the facility would be reduced to £150 million.

The board said the decision to extend the RCF followed its robust financial performance, with the group reporting strong profit and cash figures.

Its closing net leverage for the 2023 financial year stood at 1.8x, marking a significant improvement from the 2.8x recorded in the prior period.

THG said it expected a further reduction in leverage going forward into the 2024 financial period, providing a solid foundation for continued growth and financial stability.

"The extension affords the group continued significant financial flexibility during uncertain geopolitical times," the THG board said in its statement.

"As at December 2023, the group had £600m of cash and undrawn facilities providing substantial liquidity and flexibility to capitalise on growth opportunities."

At 1005 GMT, shares in THG were down 3.17% at 60.93p.

Reporting by Josh White for Sharecast.com.