E-commerce company The Hut (THG) surged 27% higher to 635p on its London Stock Exchange (LSE) debut on Wednesday, having priced one of the largest UK IPO’s since 2015 at 500p-a-share, valuing the company at £5.4 billion on its Main Market arrival.

Manchester-based The Hut’s positive start to public company life reflects strong appetite for the growth story from fund managers, although it also demonstrates how dormant the UK market for new flotations has been in recent years.


A slightly pick and mix collection of assets and businesses, the online retail outfit is probably best known for its Lookfantastic beauty and cosmetics products site and the Myprotein sports nutrition brand, The Hut owns its own brands, websites, warehouses and delivery network (as well as some hotels and a gym).

Russ Mould, investment director at AJ Bell, explained: ‘Much of the excitement around the stock surrounds its Ingenuity e-commerce fulfilment platform. In the same way Ocado’s (OCDO) online groceries solution is sold to third party supermarkets – The Hut is signing up the likes of Nestle and Proctor & Gamble to Ingenuity and this is seen as the big growth opportunity for the business.’

Despite generating sales of £1.1 billion in 2019, like most platform businesses Hut Group invests heavily in order to grow and net losses for the year were £48 million.


As Shares reported here, there are several red flags at The Hut that investors need to be aware of. Eyebrows have been raised over some governance issues including the fact management are incentivised on share price performance.

Furthermore, the limited free float and founder share held by Matthew Moulding, which allows him to veto unwanted takeover approaches, prevent the shares from qualifying for inclusion in FTSE indices.

Moulding, who in a breach of good governance practice is clinging to both the chief executive’s and chairman’s roles, said: ‘I am delighted that THG has received such strong support from some of the world’s largest investors, which means we have been able to achieve a highly successful offer of shares in the company.

‘The results of the offer are a clear validation of our business model, significant growth prospects, and recognition of the hard work and talent of all our colleagues. Our flotation is the start of an exciting new phase in THG’s development and we look forward to sharing that journey with our new shareholders.’

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Issue Date: 16 Sep 2020