Hut Group improves governance, ups guidance to £1.5bn

Shares of Manchester-based consumer brand and e-commerce giant The Hut Group (THG) rose as much as 10% on Monday after it lifted its full-year revenue guidance in its first trading update since going public last month.

The company also unveiled a move to improve its corporate governance by forming an independent advisory panel to bolster its non-executive directors.

The Hut Group has been criticised because founder Matthew Moulding is both chief executive and chairman and holds a “golden share” that gives him extra voting power.

In a third quarter trading statement, THG said it now expects full-year revenue to rise up to 33% to between £1.48 billion and £1.52 billion “following the group’s strong Q3 performance and continued momentum so far in Q4.”

At its initial public offering (IPO) last month, THG had guided to revenue of about £1.43 billion.

The Hut Group, which employs more than 7,000 people, runs websites including lookfantastic.com, myprotein.com, espaskincare.com and coggles.com that sell beauty and nutrition products.

THG said revenue in its third quarter increased 38.6% year on year to £378.1 million, up from the 35.8% growth rate seen in the first half.

Shares in The Hut Group, sold at £5 each in its September IPO, rose to touch a new high of £7.80 before settling around £7 at lunch time to give the firm a stock market value of roughly £6.5 billion.

The unusual structure of The Hut Group’s IPO had raised some concerns among corporate governance watchers.

The Hut Group’s corporate governance structures meant the firm had to pursue a “standard” rather than “premium” listing on the London Stock Exchange (LSE) and that it is not eligible for the FTSE 100 despite being big enough for the index. 

The new advisory panel includes Damian Sanders, who was until recently a senior audit partner at Deloitte in Manchester, as well as PwC partners Adam Waller and Alan McGill.

Moulding, THG executive chairman and CEO, said: “I am pleased to report a strong period of trading in our first quarterly update as a public company, including an upgrade to revenue growth guidance for 2020.

“I would like to thank all our colleagues for their huge contribution to date.

“Our strong organic revenue growth across all divisions, numerous THG Ingenuity partnership deals, and the recent acquisition of luxury skincare brand Perricone MD, demonstrates our strategic direction and progress in the period.

“Our decision to list on the London Stock Exchange provides us with a strong platform to raise the profile of both Ingenuity and our brands, and further supports their strong organic growth.

“Our acquisition strategy remains unchanged, with a focus to complement organic growth with brand IP and Ingenuity infrastructure additions.

“THG has a very strong balance sheet, enabling us to further invest across each of our growth pillars. 

“THG’s core competencies leave it exceptionally well placed and we are witnessing increased opportunities, in scale and volume, for selective acquisitions across all our divisions and geographies.

“I am delighted to announce the establishment of our advisory panel with the first three appointments made to provide additional counsel and support to THG’s board sub-committees.  

“This is a transformational step for THG and we look forward to making additional appointments over the medium term.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.