THG ‘edging closer’ to flotation, valuing group at £4.5bn

THG chief executive Matthew Moulding

Manchester-based online retailer The Hut Grou‎p (THG) has lined up seven banks to work on a potential £4.5bn flotation, according to Sky News.

It says THG has hired Citi, JP Morgan, Barclays, Goldman Sachs, HSBC, Jefferies and Numis to advise on what could be the UK’s biggest initial public offering of 2020.

Sources claimed the banks had been hired in the past few days with a view to a £1bn sale of new and existing shares.

It is thought this could take place as soon as September.

Sky reported on a possible float for THG a month ago, when the company declined to comment.

However, it quoted a THG spokesperson responding to the latest claims as saying: “Each year THG speaks to major global investors about future investment options to support global growth plans.

“This has always been done as a private company, and this year is no different.”

It is believed that the hiring of such a large syndicate of banks indicates that THG is closer to a flotation than at any point in its 16-year history, following its founding in 2004 by Matthew Moulding and John Gallemore.

Early in June this year THG announced annual sales of more than £1bn, together with new finance facilities of €1bn.

Results for the year ended December 31, 2019, revealed a 24% jump in group sales to £1.140bn.

Gross profit increased by 22% to £511m, while EBITDA was up 22% to £111m.