Shares in The Hut Group fall as online beauty firm confirms it is on the hunt for a new independent chair as part of its mission to get a premium listing
- THG raked in over £507m worth of revenue in the third quarter
- The online beauty retailer’s share price fell over 5% early this morning
- Group is seeking an independent chair as it seeks premium listing
The Hut Group raked in revenue totalling over £507million in the third quarter, marking a 38 per cent increase from the same period in the previous year.
The UK-based online beauty retailer, which is backed by SoftBank, saw its THG Beauty arm enjoy the biggest spike in revenue in the quarter, with a jump of over 60 per cent.
But, the group’s share price has fallen sharply today and is currently down 5.82 per cent or 17.85p to 288.95p. A year ago the share price was closer to the 800.00p mark, meaning it has dived over 60 per cent in a year.
In charge: Matthew Moulding, right, is the boss and founder of The Hut Group
Last week, THG announced it would give up its founder Matthew Moulding’s ‘golden share’ and seek a premium listing on the London Stock Exchange after its shares plummeted.
THG was rocked by a 35 per cent share price collapse after an underwhelming investor presentation, forcing it to address corporate governance concerns more broadly.
Having delivered a bumper initial public offering last September, it has set out plans to spin off and list different parts of the business, prompting some investors to question the overall strategy and value.
The move to drop the founder’s special share will be closely watched as regulators are expected to soon allow companies with dual class share structures to access top tier share indices in a bid to attract more tech companies.
‘After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the Premium segment in 2022, thereby continuing the development of THG,’ boss Mr Moulding said last week.
Today, the group said it had also appointed Russell Reynolds Associates to undertake a search for a new independent chair for the company.
‘This will align THG to the recommendations of the UK Corporate Governance Code’, the group said.
Mr Moulding has been both chairman and chief executive of the company, an arrangement usually frowned upon in UK listed companies.
Connections: Matthew Moulding with the prime minister Boris Johnson
Mr Moulding said in today’s update: ‘We have delivered a strong trading performance in Q3 and enter our peak trading period with confidence.
‘The recent successful migration of Cult Beauty onto the Ingenuity platform is testament to the resilience of the infrastructure and the expertise of our digital talent. In under 10 weeks we have seamlessly migrated Cult Beauty, whilst delivering significant website and customer user-experience improvements at the same time.’
THS said it sold over 11,500 Cult Beauty advent calendars in two hours recently.
The group noted that logistics, labour and product inflation had all thrown up challenges in the quarter, but said that its ‘vertically integrated business model, focus on cost control and increased automation’ had helped it largely mitigate these issues.
It said the ‘early phasing’ of buying and production meant its product availability was good ahead of the peak Christmas trading period.
THG said it had £700millon worth of cash in the bank as of 30 September.
Looking ahead, the group expects full-year revenue growth of between 38 to 41 per cent on a constant currency basis.
An investigation by The Mail on Sunday revealed the owner of beauty website Lookfantastic and sports nutrition brand MyProtein was given a one-star rating out of five in 42 per cent of all its staff reviews on jobs site Indeed.
The verdicts were delivered alongside scathing comments about the treatment of staff and working practices at the firm founded by online mogul Mr Moulding.