The Hut Group raises revenue forecasts following strong fourth quarter

Matthew Moulding

Sales at Manchester-based The Hut Group soared in its fourth quarter, it revealed today.

And it upgraded revenue forecasts for 2021 to between 30-35% ahead of 2020.

In the three months to December 31, 2020, the global technology platform specialising in taking brands direct to consumers saw total revenues jump from £370m this time last year to £558.7m.

The group, which floated on the London stock exchange last September, added more than 3.5 million new active customers during the fourth quarter period alone, with more than 10.7 million added during the full year.

App users across the group reached 2.6 million by the period end, compared with less than 100,000 at the end of 2019, providing a powerful new channel in which to engage with consumers.

Gross margin expansion during the second half of 2020 enabled the group to accelerate investments in people, additional global distribution centres, technology and new customer acquisition, while maintaining stable EBITDA margins.

These investments should play a key role in underpinning long-term revenue growth.

A combination of significant investments made over the past two years and the fantastic efforts of the group’s warehouse colleagues produced a strong operational performance, despite unprecedented levels of demand.

In the recent trading update on December 7, 2020, medium-term revenue guidance was reiterated at +20% to +25%. On December 29, 2020, THG announced the acquisition of Dermstore.com, with anti-trust approval expected during January 2021.

Following the strong momentum with which THG has finished 2020, along with the expected contribution from Dermstore.com, management now expects fiscal year 2021 revenue growth to be between +30% and +35% ahead of 2020.

Following a range of contract wins announced in the December 7, trading update, THG Ingenuity Commerce today announced a further selection of direct to customer and trade partnerships within the beauty and consumer verticals.

In beauty, Galderma, a global dermatology company,has partnered with THG Ingenuity to launch its Acnecide D2C UK website. Fragrance brand Creed has agreed a deal with THG Ingenuity to fully internationalise its digital brand presence across Europe and the UAE, including personalisation. And skincare brand Erborian, part of the L’Occitane Group, is launching a D2C localised site via THG Ingenuity across Spain, with scope to enter additional international markets and expand its global reach.

In the brand and consumer market, GlaxoSmithKline is partnering with THG Ingenuity to deliver an end-to-end solution for its Vitamins portfolio in the UK, with a D2C site and support across hosting, marketing, trading, logistics, payments and customer services.

Following the announcement of THG’s 10-year partnership with Homebase, UK paint brand Dulux, part of AkzoNobel, is working with THG Ingenuity to launch an exclusive new website for its Dulux Heritage collection as a concession within Homebase. The partnership between the three companies forms part of AkzoNobel’s strategy to increase its D2C sales via digital channels.

Finally, Newton-le-Willows soft drinks brand, Vimto, is working with THG Ingenuity to digitise its proposition in the UK, with the agreement including a new D2C website, fulfilment and client services.

Executive chairman and chief executive, Matthew Moulding, said: “I am pleased to report another strong performance through Q4 2020, during what has been a transformational year for THG.

“Due to the focus and dedication of our rapidly growing global workforce we have delivered some significant milestones in 2020.

“Following our successful listing on the London Stock Exchange in September 2020, we have accelerated our sales growth across all areas of the group, underpinned by record new customer numbers.

“We have also started reinvesting capital raised at IPO, including over £360m in M&A, principally within the US beauty sector.”

He added: “Furthermore, we have also invested significantly in our people, creating 3,000 new jobs during 2020, largely within the UK, but also across our international operations.

“During 2020, we have made significant progress in commercialising our Ingenuity Platform, fast becoming a major global player in taking brands direct to consumers.

“Each of these milestones further underpin THG’s strategic growth pillars outlined at IPO, giving management significant confidence when looking ahead to 2021 and beyond, and driving the increase in our guidance for the year ahead.”

He said: “I would like to thank all our dedicated colleagues who have risen to the challenge to deliver such a strong performance in difficult and unprecedented global circumstances.”

Matthew Moulding is among a stellar range of speakers confirmed for Invest North, the first virtual conference organised by TheBusinessDesk.com, which takes place on March 24. To book click here.

Close