Son of a tarmac layer with £4.5bn empire
A BRITISH online shopping tycoon is being lined up for a £700million windfall as his business floats on the stock market.
Matthew Moulding’s firm, The Hut Group, has emerged as one of the major winners from the shift towards online shopping during lockdown, selling a plethora of beauty and health products through its 200 websites.
The fast-growing business has been valued at £4.5billion ahead of its planned debut on the London Stock Exchange next month
And under a long-standing share plan, Mr Moulding will be handed £700million worth of shares if the company reaches a value of £7.25billion in the next two years. The company also makes money from licensing the technology underpinning its platforms to a string of customers including Boots, Nestle and Johnson & Johnson.
Lancashire-born Mr Moulding, pictured, is married with four children. He is executive chairman and owns 32 per cent of the company with his family. The son of a tarmac layer, he now has an estimated fortune of £960million, according to the Sunday Times.
The hut Group has unveiled plans for a blockbuster £4.5bn float.
In what will easily be London’s biggest listing of the year, the online shopping company hopes to raise £920m by issuing new shares when it joins the stock market in mid-September.
existing shareholders will also sell some of their holdings, with 20pc of the business set to be floated overall. At the same time, the listing is expected to set up boss Matthew Moulding for a potential £700m payout – potentially one of the biggest paydays in British corporate history.
he will secure the bonus if the company’s market capitalisation rises to £7.25bn within two years.
The entrepreneur is a former Phones4U executive who has rubbed shoulders with Boris Johnson and Barack Obama. Yesterday the 48-year-old said: ‘Our intention to float ThG on the London Stock exchange reflects the achievements of the past but also our strong belief in the significant potential for The hut Group in the future.’
The hut Group is one of Britain’s biggest online retailers, boasting annual revenues of £1.1bn and owning brands such as nutrition supplement Myprotein, moisturiser espa and cosmetics seller Lookfantastic (pictured above).
It describes itself as ‘vertically integrated’, meaning it handles almost all levels of its business in house, from website design to product development and distribution.
The company’s three divisions are beauty, nutrition and ‘Ingenuity’, with the final one referring to the ecommerce technology it licenses to rivals including Boots, Nestle and Johnson & Johnson.
Insiders believe Ingenuity will prove to be one of the firm’s most lucrative lines of business and liken its model to online supermarket Ocado, which provides internet shopping logistics to Marks & Spencer and other grocers globally.
‘The brands we own today give us leading strategic positions in prestige beauty and nutrition,’ Moulding added. ‘Ingenuity powers not just our brands but those of many other leading consumer brand owners around the world, creating a highly resilient, verticallyintegrated business with significant growth opportunities.’
The company’s float will seek to cash in on demand for tech stocks, which have boomed this year even as the coronavirus crisis has ravaged the global economy.
CMC Markets analyst Michael hewson added: ‘The technology is proven, and the business is used by big consumer brands as a logistics and infrastructure provider.’
however, The hut Group’s decision to opt for a ‘standard’ London listing rather than a premium one means that it will not be eligible for a place on the FTSe100 index, despite its mooted value being high enough.
The Manchester-based company’s governance arrangements are also expected to raise eyebrows among some investors.
Moulding’s position as executive chairman is frowned upon under City rules – which say the chairman should be an independent figure and separate from the chief executive – and his insistence on a ‘founder’s share’ to block takeovers is unusual.
But Neil Wilson, chief analyst at Markets.com, said: ‘After a considerable ramp in tech valuations this year, this looks like a well-timed move, at least on the part of the founder who is due a bumper £700m payout should all go well and still remain very much in control.’
he added that the deal also looked like ‘another banker buffet’, with four of the same banks from Aston Martin’s listing – Goldman Sachs, JP Morgan, hSBC and Numis – in addition to Citigroup, Barclays and Jefferies taking part. Aston Martin has seen its market cap plunge from £4.3bn since its listing to just £1bn, prompting claims it was wildly overvalued.
Wilson added: ‘Let’s hope ThG enjoys a better time on the public markets than Aston.’
The hut Group’s rise reflects the growing shift towards internet shopping in recent years.
It was founded in 2004 by Moulding and business partner John Gallemore using savings of £500,000.
The pair built it from a small operation selling CDs and DVDs from the Channel Islands – using a now-closed tax loophole – into a huge player in ecommerce, although the company has remained littleknown until now.
Its listing is expected to be the biggest London float since 2013, according to Reuters.
The pandemic largely halted new listings earlier in the year when markets recorded sharp falls as investors avoided risk.
‘This looks like a well-timed move’