Share surge makes Hut Group founder a billionaire 

Shares in the online health and beauty group soared by almost a third on their trading debut on Wednesday amid strong demand

Matthew Moulding 
Matthew Moulding founded the Hut Group in 2004 

The founder of a Manchester-based online health and beauty retailer has become a billionaire after shares in the Hut Group surged on their London debut on Wednesday.

Matthew Moulding saw his wealth rocket as the stock jumped by almost a third, raising £1.9bn and making it the UK's biggest float since 2017.

On Wall Street, meanwhile, shares in  cloud-data software maker Snowflake began trading at $245 - more than double their offer price, raising almost $3.4bn in a record for a US software listing. Later in the day the value of the company soared to $70bn (£54bn), marking an astonishing duo of listings on both sides of the Atlantic.

The Hut Group, founded in 2004 as a white-label ecommerce services provider, operates a string of websites that sell nutrition and beauty products under brands including Myprotein and Glossybox.

It also operates a proprietary ecommerce platform business – used by groups such as Nestlé and Johnson & Johnson – that has given the group tech-stock credentials.

Investors rushed to get a slice of the company, snapping up all the shares on offer less than an hour after it began taking orders.

Shares opened at 600p, 20pc higher than its issue price of 500p and went as high as 658.3p before closing up 22pc at 609p, giving the group a market capitalisation of £6.5bn and catapulting into the ranks of Britain’s biggest companies.

However, despite its size, it will not qualify for inclusion in the FTSE 100, having retained a "dual-class" stock structure similar to many US tech groups, in which Mr Moulding has the power to veto any attempted hostile takeover for the next three years.

As a result, it cannot qualify for listing on the premium segment of the London Stock Exchange.

Mr Moulding is both chief executive and chairman of the newly listed group, named THG Holdings, and has retained a 25.1pc stake. His dual role contravenes the corporate governance code.

He stands to receive a further roughly £700m in what would be one of the UK’s biggest corporate paydays if the group’s average market cap stays above £7.25bn for more than 15 days between now and December 2022.

The float is London’s biggest since Allied British Banks’ £3bn offering in June 2017, and marks the best debut for a major listing since Codemasters two years ago. It marked a bonanza for London bankers, with eight involved in the sale.

Hut Group has beauty, fitness and ecommerce divisions Credit: Handout

Phil Drury at Citi – one of the sales’ four global coordinators alongside JP Morgan, Goldman Sachs and Barclays – said THG’s float had attracted “significant demand at a multiple level of over-subscription from technology investors around the world”.

HSBC, Jefferies and Numis acted as joint bookrunners, while Rothschild & Co. were advisers.

The group sold £920m of new shares to investors, with a further £961m sold by existing shareholders including a slew of retail veterans such as former Tesco boss Sir Terry Leahy.

Scottish billionaire Sir Tom Hunter, who sold retail chain Sports Division to JJB Sports in 1998, sold £52.5m worth of shares, the majority of which will go to his charitable foundation. Private equity giant KKR sold the entirety of its nearly £450m stake.

Earlier this month, THG said major investors Blackrock, Janus Henderson, Merian and the Qatari Investment Authority had together committed to buying more than half the new shares.

Mr Moulding 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.”

Its software wing THG Ingenuity, which offers a direct consumer platform used by a variety of major global brands, is seen as one of its most valuable divisions.

Liberum analyst Wayne Brown said Ingenuity, which represents about 11pc of the group’s total revenues, “is a proven digital brand builder, driving global leadership positions across digital beauty and nutrition categories”.

He added: “THG is well-positioned to benefit from the shift from offline to online retail sales. The outbreak of Covid19 has accelerated this trend, with online retailers significantly outperforming during lockdown.”