THG’s activist investor to vote against chair Charles Allen

An activist investor in UK ecommerce company THG said that it would vote against the reappointment of chair Charles Allen in protest at what it said was the lack of progress in reviving the group’s share price.

Kelso, a UK investment firm that owns about 0.5 per cent of THG’s shares, said it was disappointed with the lack of progress in trying to spin off some of the group’s divisions and moving the group’s listing to the premium segment of the London market. 

After listing at a £5.4bn valuation in 2020, THG, previously known as The Hut Group, has endured a bruising time as a public company. Shares in the group, which owns sites including Lookfantastic, and also sells technology to online retailers, have slumped 90 per cent since its IPO.

Matthew Moulding, THG’s chief executive and co-founder, has blamed the company’s woes on a broader wariness from investors towards London-listed companies as well as negative coverage from the media.

But Kelso, in which Moulding has built a stake in a personal capacity in recent months, said THG had to take the blame for its share price performance.

“Whilst major strategic and structural issues remain unaddressed, the poor share price cannot be blamed on the London Stock Exchange,” Kelso said.

In 2021, THG said its divisions spanning beauty, nutrition and ingenuity would likely pursue “individual public market listings or partnerships, with THG retaining significant majority ownership”. The group reiterated this ambition in January.

As a result of the lack of progress, Kelso said it would vote against the re-election of Allen at THG’s annual meeting on June 24. THG recruited Allen, the former chief of broadcaster ITV, in 2022 in an effort to build confidence in its corporate governance and wider strategy.

Kelso said THG’s divisions are worth more than the whole group’s current market capitalisation of about £1bn.

THG has previously said it would wait to see if the standard and premium segments of the London stock market would be replaced with a single listing category before making a change.

In its most recent quarter to March 31, THG reported a 2.1 per cent increase in revenues to £455mn, helped by sales of its beauty products.

THG declined to comment.