Hut Group soars on stock market debut
Share price rise makes founder a billionaire
THE Hut Group has soared on its stock market debut – instantly inflating the fortunes of its multi-millionaire backers.
The online shopping empire listed on the London Stock Exchange yesterday morning with its shares priced at 500p apiece.
But the stock shot up immediately, and by the end of the day it had settled 25pc higher at 625p.
Eager traders added more than £1bn to its value, as its market capitalisation climbed from £5.4bn to £6.8bn. The initial public offering (IPO) had already made a fortune for The Hut’s backers.
Founder Matthew Moulding, 48, did not sell any shares during the IPO, but his 17pc stake is now worth £1.2bn.
Sir Terry Leahy, the former Tesco boss, bagged £17m from selling 3.4m shares during the IPO for 500p. His remaining 13.6m shares are now worth £85m.
Oliver Cookson, the entrepreneur who founded nutrition brand Myprotein and sold it to The Hut in 2011, pocketed £283m during the float, on top of the £58m he made from selling his business nine years ago. He now has a stake worth £62.5m.
Former Debenhams boss Terry Green had made £6m and is now left with £15.4m.
And West Coast Capital, the investment firm of Scottish entrepreneur Tom Hunter, has sold £52.5m of shares but still holds £119m. The dramatic first day of trading indicated a vote of confidence in The Hut’s prospects, despite governance concerns surrounding it and its board. Moulding said: ‘I am delighted that The Hut Group 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.’ The firm owns make-up website Look Fantastic, brands such as Eyeko, and nutrition line Myprotein. It also owns two luxury hotels in Manchester and The Hale Country Club and Spa in Cheshire, popular with footballers’ WAGs.
But investors are especially interested in its online shopping technology, which it licenses to companies such as Asda and Tesco. Traders’ enthusiasm was heightened by the long dry spell which the stock market has suffered during lockdown.
The Hut’s float was the largestever ecommerce IPO in Europe, according to the London Stock Exchange, and the largest tech IPO ever in London. But the company has been criticised for failing to comply with basic corporate governance rules.
Moulding has retained a ‘golden share’, leaving him with a heavy influence. He will also be chief executive and chairman, and is the company’s landlord after buying its properties, leasing them back for £19m per year.
Two ‘independent’ directors, Zillah Byng-Thorne and Dominic Murphy, have both worked with the company and its founder for a number of years.
Cliff Weight, a director at the private shareholders’ group Sharesoc, said: ‘This is just bad governance. There’s a lot of razzmatazz and, to be fair, huge success, but there are also a lot of red flags.’