Hut shares crash as two directors quit
SHARES in The Hut Group crashed to record lows as it sounded the alarm over sales and saw the shock walkout of two top directors.
The embattled online retailer said Zillah Byng-Thorne and Andreas Hansson had resigned ‘with immediate effect’.
And THG said sales and profits would be lower than expected this year as costs spiral and consumers cut back on spending. Shares fell 18.4pc, or 9p, to 40p.
It is the latest in a series of blows for the business which has now lost more than 90pc of its value since joining the stock market two years ago.
At the time The Hut Group – now known as THG – was seen as the darling of the stock market, floating its shares at 500p a piece. They briefly topped 800p, leaving the company worth almost £10bn.
But it has been hit by a slew of corporate governance concerns and questions about its lofty valuation, leaving it worth around £500m. That has seen THG founder and chief executive Matt Moulding lose as much as £1.26bn on his own 22pc stake, which is now worth around £115m. Byng-Thorne was one of two directors who walked out of the boardroom yesterday alongside Hansson, who joined last October.
Her departure after nine years is a blow to the already-struggling firm as the 47year-old is one of the UK’s most successful chief executives. Byng-Thorne is credited with turning around publishing giant Future and has helped its shares soar around 1000pc in the past eight years.
Joining the board after her departure is Dean Moore, the former finance chief at Cineworld, which filed for bankruptcy in the US this month. Also joining is former Microsoft senior manager Gillian Kent.
The boardroom shake-up came alongside THG results for the first half of the year in which sales hit a record £1.1bn. But the firm behind brands including Lookfantastic and Myprotein was pummelled by soaring costs of whey and other materials. It lost £89.2m in the first half of the year, five times higher than in the same period a year ago.
THG said sales growth would stall in the second half of the year as the mounting cost of living prompts customers to rein in spending. It said sales growth will now be as high as 15pc, down from an earlier forecast of up to 24pc. Meanwhile, its profit forecast for the year was also slashed from being in line with last year’s £161m to between £100m and £130m.
Despite the most recent crash Moulding said he is still confident the business can deliver ‘long-term value’ for shareholders.
The bleak update comes just months after Moulding rejected a series of takeover bids that would have valued THG as much as £2bn.
AJ Bell investment director Russ Mould said: ‘THG declared it had made “substantial progress”, but investors who have suffered a 92pc share price loss since the company joined the stock market may think otherwise.’