Never a dull moment at THG: director opposed by 23% of shareholders but Moulding laughs through AGM

THG’s annual general meeting passed by without major upsets, though the reappointment of Iain McDonald, a long standing non-executive director, was opposed by 23.73% of the shareholders, prompting an enquiry into why. 

A move anticipated by the board in advance, McDonald was moved from his position as chair of the audit and remuneration committee. 

As reported on TheBusinessDesk.com, the board will be joined by former Unilever executive Helen Jones, a FTSE heavyweight with senior governance experience.

Nevertheless, in response, the company said in a footnote it will undertake a review to understand why so many voted against, “the Company notes that a significant number of votes were cast against resolution 9 relating to the re-election of Iain McDonald as a director of the Company.” 

It went on to say THG will “undertake a detailed review of any feedback received on this resolution” and in line with the provisions of the UK Corporate Governance Code (July 2018), will provide an update on the views received from shareholders and actions taken in response within six months.

CEO grins at THG AGM (source: Matt Moulding on LinkedIn)

More typical of the meeting, held at the Bowdon Rooms in the wealthy Altrincham suburb, was the vote by 95.65% of shareholders to reappoint Moulding.

All other resolutions were similarly passed.

In one of his typically cheeky LinkedIn posts Moulding posed for selfies at the AGM and said such meetings were usually duller than watching paint dry: “And as someone who, as a student, painted many a pub wall and ceiling, I talk from experience.”

He added: “AGMs are usually held in a soulless hotel conference room, attended by a tiny handful of people, namely press. A script is read out, lasting for 10 minutes, and the meeting ends. The nicest bit from today’s AGM was the supportive comments of two small shareholders.”

However, he couldn’t resist a further dig at the City and the complexities of running a listed business, saying the successful restructuring was more difficult as it was carried out under intense pressure. 

“As a private company, these are simple decisions. But when listed, the pressure to be short term focused is intense – market hysteria surrounds long-term decision making, no matter the circumstances. I’m proud of THG’s actions, and the support the Board gave to the plan. We took short pain for long term gain.

“This explains why THG not only held onto huge sales growth during Covid (growing Sales from c£1bn to c£2bn over 2 years) but grew sales further in every division in 2022. Very few competitors, if any, achieved sales growth in 2022, and even less managed to hold onto to growth delivered during Covid.”

His parting shot was: “And to the blatant bad actors in the City – especially Numis and their close “friends” – thanks for the extra motivation. Not that we ever need it.”

Activist investor Kelso, which owns 8 million shares, and is largely supportive of Moulding, said it “noted” the “significant increase” in profits released in the pre-AGM trading statement. 

“We also note Matthew Moulding relinquishing the Golden Share; a clear sign of his confidence in the business and shareholder register, alongside improving governance.

“Kelso reiterates its belief that the current stock market value does not reflect the underlying value of the sum of each of the main THG divisions.”

Kelso was established in 2022 to identify, engage and unlock trapped value in the UK stock market, but so far has only taken a position in THG. It’s heavyweight investors include entrepreneurs Luke Johnson, Nigel Wray and Umar Kamani. 

It is advised by Zeus Capital and led by former Zeus chief executive John Goold.

Kelso completed a fundraising of £3.0 million in January 2023.