The Hut Group Upbeat After Profit Jumps To Online Demand

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Ameliorate, owned by the Hut Group. Improve.

British e-commerce company The Hut Group said Thursday that the first quarter was above expectations after adding nearly 11 million new customers in 2020 thanks to a pandemic in demand for beauty and nutrition products. In its first set of full-year results since its listing in September, the company posted a 36 percent increase in annual underlying profit to £ 45.5 million ($ 62.74 million) with retail brands such as Lookfantastic and skin care group ESPA.

E-commerce players have seen a surge in online sales during repeated lockdowns in the UK, as customers bought online for everything from groceries and essentials to fashion and shoes.

THG added 10.7 million new customers in the reported period, with food and beauty product orders up 41 percent and 58 percent as online purchases allow customers to discover products through curated content.

However, it recorded an operating loss of £ 481.8 million due to non-cash charges largely related to the vesting of stock option plans after listing.

Shares of THG were down 2.4 percent to 687 pence by 0720 GMT. The stock is still trading 37 percent higher than the IPO price of 500 pence.

THG’s flagship platforms continue to experience impressive growth, with new customers still showing a high degree of stickiness in 2020, Jefferies analysts said in a note.

Sales were up 42 percent to 1.6 billion pounds in the year to December, and the company held on to its 2021 sales outlook of 30 percent to 35 percent higher than in 2020, supported by recent acquisitions.

“Management’s goal for the IPO was to incrementally change THG’s access to funding to take advantage of Covid-19’s accelerated market changes,” said CEO Matthew Molding.

Since its IPO, the company has acquired five companies, including two US skin care brands, Perricone and Dermstore.com. It said on Thursday it would increase spending on acquisitions to around £ 250 million.

Molding told the board in September that he would not try to take advantage of his job at The Hut Group and pledged to donate 100 million shares of THG to his charity.

By Vishwadha Chander and Yadarisa Shabong in Bengaluru; Adaptation by Rashmi Aich and Christopher Cushing