The Hut Group reports operating loss despite soaring revenues in ‘milestone’ year

By Becky Bargh 19-Apr-2021

Revenues for Matthew Moulding’s e-commerce business skyrocketed 42% for 2020, but one-off payments swung the group into the red

The Hut Group acquired the spa-inspired brand in 2017

Despite recording a ‘milestone’ year, with revenues up 42% year-on-year to £1.6bn, Matthew Moulding’s The Hut Group (THG) has reported an operating loss for fiscal year 2020.

The Manchester-based business’ international revenues saw growth upwards of 61% across all markets, while the acquisition of online beauty retailer Dermstore is expected to account for 20% of the group’s revenue.

THG Beauty, including ESPA and Illamasqua, experienced growth of 57% compared with 2020 to generate £751.6m in revenue.

Betting on companies expansion in e-commerce, the specialists in online saw revenue for its Ingenuity Commerce, THG’s e-commerce solution service, shoot up 160% during the 12 months with a 324% growth in live sites.

But payments for one-off items drove the group into the red, with £331.6m non-cash share based payments and £105.1m of non-cash charges on assets held for sale.

IPO fees incurred reached £14.3m, while costs due to the Covid-19 pandemic made up almost £40m.

“We approach FY21 with confidence having navigated successfully through a milestone year in the group’s history,” said Moulding.

“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.”

Following on from THG’s outstanding 2020 performance, the Lookfantastic owner has begun 2021 with the same momentum.

Q1 growth surpassed 58% compared with the same period in 2020 to £447m with all categories in THG’s portfolio experiencing double-digit improvement.

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THG OnDemand was the business’ best performing category with 114% growth, followed by THG Beauty up 90%.