Posted on April - 22 - 2010
The Hut Group to float and double in size
Online retailer The Hut Group expects to nearly double its workforce to more than 300 over the next 18 months after raising £14m in equity funding for acquisitions ahead of a stock market float.
The Cheshire-based group plans to list on the Alternative Investment Market next year – a move revealed by the MEN earlier this year.
The Hut has a war chest for takeovers after securing investment from City fund managers Artemis and The William Currie Group, venture capital firm Balderton and former Matalan chief executive Angus Monro.
The new shareholders have taken a 43 per cent stake in The Hut, valuing the business at £32m.
At present The Hut employs 175 staff but expects to add up to 150 employees as it grows organically and through acquisitions.
Formed in 2004 by Matthew Moulding and John Gallemore, The Hut sells games, DVDs, CDs and books via its websites, including Zavvi.com bought last year, and designs and builds websites for chains such as Asda, Tesco, WH Smith and Argos.
This week it announced moves into the handbags, fashion accessories and gifts sectors and is looking to use its war chest to add other lines including footwear and health and beauty.
It is in talks with two takeover targets and hopes to complete deals this year.
The Hut, based in Northwich, turned over £51m in 2009 and made pre-tax profits of £1.5m.
The group is on track to double both revenues and earnings this year.
Mr Moulding said: “It is testament to the calibre of the people across the business and the opportunities ahead that we have been able to secure the support of such a high quality set of investors.
“The capital will be deployed to assist with our growth plans and acquire specialist online businesses which complement our existing product offering.”
Its acquisitions programme will be led by director Steve Whitehead, who joined in January from Barclays Private Equity.
Mr Monro, who joins The Hut’s board and is expected to become chairman, said: “With The Hut Group’s focus on fast-moving consumer goods and serving the online consumer, it is very well positioned to benefit from the continued retail channel shift to online.”
Mike Fletcher led a team at the Manchester office of investment bank Altium who advised The Hut and said: “The appetite from such high quality investors to back The Hut Group has been exceptional and reinforces the company’s potential for growth.”
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