The Hut Group announces 40% sales surge but tech arm growth is slow

The Hut Group announced a 40 per cent increase in its sales after the shift to online shopping during the pandemic provided new business.

The Manchester based ecommerce brand reported a boom in its sales to £1.61 billion for the year finishing in December, seeing a rise of 10.7 million new customers.

“I think we will continue to increase our share,” company co-founder Matt Moulding said to The Times.

Underlying profits leapt to to £151 million, an increase of over a third, however one-off costs have resulted in a loss of more than £500 million.

The online retailer’s losses are attributed to its £5 billion listing on the stock market, which was deemed as a success for the tech industry after Deliveroo’s disappointing IPO.

“[There was] inevitably some bumpiness that comes with bringing a company to market

“My advice [to other businesses] would be to take time to get your story out there. If you say you’re a high-growth business, you need to explain properly why you are.” Moulding added.

Its stock market listing cost £14.3 million in bankers’ fees and the company also paid staff full furlough wages during lockdowns.

READ MORE: The Hut Group’s investors sell £250 million shares as demand skyrockets

The group also owns a series of up-market hotels which were closed during lockdown restrictions as the hospitality sector took a hit.

Its heavily backed white-label technology division, THG Ingenuity, an ecommerce enablement platform suffered slow growth of only severn per cent.

Investors had high hopes for Ingenuity and shares were down 5.8 per cent yesterday, valuing the company at £6.8 billion, after being listed at £4.5 billion earlier this year.

The Hut Group recently added Homebase and UK’s Pentland companies to its roster of Ingenuity clients but declines to comment on the total amount.

While the company only reported a growth of severn per cent, Ingenuity chief executive John Gallemore told analysts it signed 31 new clients in the first three months of this year compared with just three in the same period in 2020 according to The Times.

The ecommerce brand said that without its one-off costs it would have made a £45.5 million operating profit.

The group said it planned to increase acquisition spending to £250 from a previous estimate of £50 million after the nature of new potential business had improved over the pandemic.

It current assets include a web-based tree planting and carbon offset platform which it acquired for £4 million previously.

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