Hut Group confirms £4.5bn London IPO

Online retailer The Hut Group (THG) on Thursday confirmed plans for a public float in London that would value the company at £4.5bn.

The company, founded in 2004, said it was looking will look to raise £920m in an IPO set for September. Founder Matthew Moulding will be awarded shares worth about £700m if the company’s valuation reaches £7.25bn in the next two years as part of an incentive scheme.

THG said it was still performing strongly despite the coronavirus pandemic, reporting “elevated revenue and profitability growth” in the six months ended to June 30 versus the same period last year with warehouses and production facilities operational throughout lockdowns.

This meant online sales continue across all websites and brands throughout the period.

“The directors believe these trends reflect the continued acceleration of online channel shift, driven in part by Covid-19's impact on consumer behaviour,” the company said in the IPO filing.

THG owns the Lookfantastic beauty website and sports nutrition firm Myprotein. It owns its websites, warehousing systems and a delivery network and earns money licensing this technology to other businesses.

Customers include Nestlé, Johnson & Johnson, Procter & Gamble, and Nintendo.

The Qatar Investment Authority, private equity firms Janus Henderson, BlackRock and Merian Global Investors have committed to buy a total of £565m of the shares between them.

“Our intention to float THG on the London Stock Exchange reflects the achievements of the past but also our strong belief in the significant potential for THG in the future,” Moulding said.

He added that the company achieved year-on-year revenue growth of 24.5% to £1.1bn in 2019 billion with adjusted core earnings of £111.3m. It was targeting future overall revenue growth of around 20 – 25% over the medium term based on a strong growth trajectory in all segments, according to the IPO filing.

The firm has rapidly expanded as shoppers increasingly turn online for health and lifestyle brands, with around 7,000 staff now employed by the Manchester-based group.