The Hut Group has announced that group revenues soared by 42% to £1.6bn in its full-year results, as the wider consumer shift to digital channels “continued apace”.
In what was a “milestone” year for the group, EBITDA was up by 35% to £150.8m in the period and new customers rose by 10.7 million, as consumers were “increasingly engaged through digital channels enabling discovery of new products and emerging brands via curated content”.
Despite this, the group incurred an operating loss of £481.8m in the year. This was largely driven by a £331.6m share based payments charge, a £105.1m impact of the impairment on assets held for sale, and sale and leaseback charges, as well as £14.3m in IPO fees and £39.2m in Covid-related costs.
Nonetheless, the group said the sales momentum seen in FY20 has continued into FY21 across all divisions, reporting revenue growth for the first quarter of 58.2%. It noted that Ingenuity Commerce has been a highlight of the quarter with 187.9% growth, up from 160.4% in 2020 and 144.0% in the fourth-quarter 2020.
It added that its integration strategy remains on track to achieve double digit EBITDA margins by the end of FY 2021, as the brand pivots to a digital-first strategy.
Ahead of THG’s IPO in September 2020, Moulding also notified the board that he would not seek to profit from his employment at THG. Instead, he waived his salary with the group, making a charitable donation of similar value. Between IPO and the end of 2020, THG donated £300,000 to various charities, instead of paying his base salary.
Moulding said: “We approach FY21 with confidence having navigated successfully through a milestone year in the group’s history. I am particularly proud of how our people have responded to the changing environment, displaying determination to make a difference across all aspects of our operations from new product development, to digital marketing, M&A, fulfilment and THG (eco).
“Our global D2C brand building capabilities and proprietary Ingenuity technology platform has enabled us to further develop both our external brand relationships, and our expanding portfolio of Beauty and Nutrition own brands. Leveraging the platform to build an impressive client base of blue-chip consumer brands has been a highlight of the year, supported by encouraging momentum in the current year Ingenuity Commerce pipeline.”
He added: “Management’s purpose for the IPO was to step change THG’s access to funding in order to capitalise on Covid-19 accelerated market changes. As we progressed through 2020, those changes became more apparent in terms of the volume and scale of opportunities available to the group, as evidenced by the c. £400m committed to acquisitions since IPO, most notably the acquisition of Dermstore in the US.
“We have delivered exceptionally well on our commitments at IPO and we move forward with purpose, to advance our strategy with investment in talent, infrastructure, THG (eco) and targeted M&A, and to continue to deliver growth on a global scale.”