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Hut Group float is no triumph for London

Founder Matthew Moulding likes to give the impression that he's done the capital a favour by floating here rather than Wall Street

What a transformation, and no, not just Matt Moulding’s wardrobe. The Hut boss has had a makeover that would make Trinny and Susannah proud. Gone are the dowdy suits, plain shirts, and pale complexion, replaced by polo shirts, leather jackets, and bronzed biceps. Jeff Bezos eat your heart out.

Mid-life crises are all the rage in tech-land, it seems. Perhaps it’s a distraction tactic, designed to stop investors noticing the governance nightmare that has just erupted in the City.

Still, no one can argue that what Moulding has achieved is mightily impressive, turning a mishmash of online health and beauty brands into a technology platform with the potential to be the next Amazon or Ocado, or a hybrid of the two - at least according to the company’s legion of cheerleaders that is.

Fund managers certainly don’t seem to care about a catalogue of governance red flags that makes Mike Ashley look like the poster boy for the ESG crowd. They’re too busy it seems rushing to snap up shares in a company that started off as a tax wheeze, posting CDs to customers from Guernsey to get around VAT laws. It now calls itself a “vertically integrated digital-first consumer brands group”, or in plain English: it sells stuff over the internet, including for scores of multinationals.

Hut is off to a flying start as a public company after the shares rocketed from a float price of 500p to as high as 658p - a spike of more than 30pc. A company that critics said was being too racy with a target valuation of £4.5bn, equivalent to 40 times pre-tax earnings, was actually worth £6.5bn by the end of day one.

A total of £1.9bn was raised - £920m for the company coffers and a further £960m to be shared among existing shareholders, including Moulding who pocketed £56m and has been left with a 25pc stake worth £1.6bn.

It also means that a controversial eye-watering bonus plan that promises to propel its founder further into the ranks of the super-rich already looks attainable. He stands to earn as much as £700m if Hut’s market value averages £7.25bn for more than 15 days between now and December 2022.

Meanwhile, the City has pipped Nasdaq in the battle to house one of Europe’s brightest technology prospects at a time when share sales are rarer than a face mask at a Trump rally.

But don’t mistake this for a triumph. In a recent interview, Moulding made it sound like he was doing us all a favour. “We have tried our best to ensure that we do list in the UK” - the rationale being that he would have had even more control over the business across the Atlantic.

Yet it’s not as if the entrepreneur has given up a great deal by selling shares here instead. Moulding will be chairman, chief executive, and landlord to boot, as well as retaining a “founder’s stake” that means he can bat away any hostile takeover bids.

In short, full control still, and a company that contravenes just about every City code going. There are those that argue it is a price worth paying, that it is worth turning a blind eye in a bid to woo the next generation of technology companies but that’s desperately short-sighted.

There is no point in the UK engaging in a race to the bottom. It’s a race with only one loser and it will ultimately harm London’s standing as it begins to resemble the corporate governance Wild West of Silicon Valley.

Hut Group founder Matthew Moulding  Credit: THG Holdings/Reuters

What took Hitachi so long? 

It isn’t a shock that Hitachi has decided to walk away for good from plans to build two nuclear power plants in the UK.

The shock is that it took the Japanese nearly two years to accept that the proposals were definitely doomed, having mothballed the sites at Wylfa, Anglesey, and Oldbury, Gloucestershire, in January last year.

The warning signs were everywhere: a government so desperate for the £20bn project to go ahead that it dangled every available carrot, including an equity stake for the state, debt guarantees and generous subsidies; spiralling costs and repeated delays at that other radioactive catastrophe Hinkley Point; and Toshiba’s decision to give up on a £10bn facility in Cumbria just two months before Hitachi had a change of heart.

You would have thought then it might have come up with a more original excuse than Covid-19, not least with the pandemic raging since March. Still, with the writing on the fall for so long, ministers have had plenty of time to come up with a Plan B for Britain’s energy needs.

With doubts over China’s involvement in the Sizewell C facility on the Suffolk coast to add to the mix, our nuclear strategy is now in total meltdown, so what’s the alternative: wind; solar; gas? The truth is, no one in government would be able to tell you.