The Hut Group shares plunge another 21% as critics argue too much power rests with the firm’s founder
- On yet another tough day for founder Matt Moulding, the Manchester company’s shares plunged 21.1pc, or 64.8p, to 242p
- It is less than half of the 500p it floated at in September last year
- The firm owns nutrition brands including Myprotein, cosmetics line Espa and beauty retailer Lookfantastic
Shares in The Hut Group crashed to an all-time low as attempts to restore confidence in the online retailer fell flat.
On yet another tough day for founder Matt Moulding, the Manchester company’s shares plunged 21.1pc, or 64.8p, to 242p, less than half of the 500p it floated at amid great fanfare in September last year.
The fall followed a trading update for the three months to the end of September with revenues up 34pc to £507.8m. The firm owns nutrition brands including Myprotein, cosmetics line Espa and beauty retailer Lookfantastic.
Shares in The Hut Group crashed to an all-time low as attempts to restore confidence in the online retailer fell flat
Revenue at THG’s Ingenuity business, which handles everything from website design to delivery and payments for brands wanting to sell online, rose 44pc to £51.1m. ‘We have delivered a strong trading performance and enter our peak trading period with confidence,’ said Moulding.
THG said it has hired recruitment firm Russell Reynolds to find an independent non-executive chairman to beef up the board, improve corporate governance and build bridges in the City. Critics argue too much power rests with Moulding, who is executive chairman, the largest shareholder and THG’s landlord.
THG also appointed Andreas Hansson, a managing director at Japanese conglomerate Softbank, as a non-executive director. Analysts at broker Jefferies trimmed their target price to 700p from 920p. They said the update ‘should reassure’ on the progress of Ingenuity and the strength of THG’s relationship with Softbank following Hansson’s elevation to the board.
The market appeared to disagree and shares tanked again. Uncertainty in the City has sparked a series of sell-offs in recent weeks. The stock lost a third of its value in just two hours earlier this month after a presentation by Moulding to assuage concerns backfired spectacularly.
The firm has been trying to dispel worries about its corporate governance and a lack of clarity about how it makes money. Ingenuity is a top concern due to a complex investment deal under which Softbank is able to purchase 20pc of the business for £4.5bn despite a lack of public information on the division and its unproven nature.
Moulding agreed last week to relinquish his ‘golden share’, which gave him the power to block any takeovers, as well as unwind an arrangement where THG shares were collateral for a £100m loan from Barclays. However, all this has failed to stop investors’ nerves jangling.