LSE.L Share News (LSE)

(Sharecast News) - The Hut Group has announced plans to float on the London Stock Exchange with the aim of raising approximately £920m, for a 'pre-money' valuation of £4.5bn.
Matthew Moulding, the group's chief executive officer and one of its co-founders, expressed his "strong" belief in the "significant" potential of the company, which he said was underscored by the rapid growth enjoyed since it was founded in 2004, strong brands and its proprietary direct-to-consumer digital platform.

In 2019 the company achieved 24.5% year-on-year growth in sales to reach £1.1bn for earnings before interest, taxes, depreciation and amortisation of £111m.

Growth had further accelerated over 2020 with revenues jumping 35.8% to £676m over the last half and with management now intending to scale its footprint and grow in what it termed as the "very large" global end markets for beauty and nutrition.

The firm also credited the increasing shift towards online transactions and the non-discretionary nature of the beauty and nutrition categories for its strong performance.

Its own brands included Mypotein and Lookfantastic but the firm also "powered" 1,100 third-party brands, through its THG Ingenuity platform.

The company also runs the Hale Country Club in Cheshire, and the King Street Townhouse and the Great John Street hotels, both of which are in Manchester.

Over the past three years, the company had also converted its adjusted EBITDA into adjusted free cash flow, before growth investments, at a rate of roughly 40-60%.

The group's directors expected the global nutrition market to grow from £16.9bn at present to £25.0bn by 2024, while the online segment of the same was expected to go from £4.0bn to £7.8bn.

In parallel, the size of the prestige beauty market was seen increasing from £107bn to £150bn.

Combined, the result was expected to be overall medium-term annual growth in turnover of 20-25%.