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President adds discontinued THG to cart

Tongues have been talking about a takeover of The Hut Group (THG) for months, but even that speculation hasn’t been able to dispel the gloom surrounding the digital retailer.

Shares of the owner of sites Lookfantastic and MyProtein are now trading less than a tenth from their post-IPO highs above 800p as investors grow increasingly concerned about governance and strategy. Although THG reported 35% sales growth in 2021, a broader cooling in internet retail stocks has seen it join Ocado (OCDO), AO World (AO.) and Asos (ASC) on the list of the best selling shares in London in 2022.

Its shares fell to an all-time low of 69.6p in June after two suitors separately dropped plans to buy the company. Property tycoon Nick Candy’s investment firm and a consortium led by Belerion Capital, whose previous offer of 170p per share in May was rejected for “significantly undervaluing” the company, had been considering offers. As neither came to the table by the June 16 deadline, it would be six months before they could make another offer.

In the meantime, THG faces a “difficult road to break-even” according to Numis, thanks to rising costs and already low cash margins of 7.4% in its beauty e-commerce business, while that the young technology logistics division, Ingenuity, is still taking off. S&P Global Ratings downgraded its outlook for THG to “negative” in May, citing likely pressure on profitability over the next 12 months.

Nevertheless, new THG chairman Charles Allen took advantage of the group’s low valuation to buy almost £1m worth of shares. The former ITV boss bought 1.15million shares at 86p each, although their value fell 12% in the days after the deal.

Allen joined the board in March to strengthen THG’s governance, after founder Matthew Molding came under fire for holding the positions of executive chairman and chief executive together, as well as owning a “preferred stock” that allowed him to veto takeover bids. Moulding, which has a 23.5% stake in the company, has previously hinted at ambitions to take over THG privately.

Bought
Company Director/PDMR Date Price (p) Overall value (£) Bet size
3i Stephen Daintith 30 June 22 1,112 98,412 n/a
Alphawave IP Sehat Sutardja * 29-30 June 22 136 476,310 13.01%
Related British Foods Emma Adano 29 June 22 1,636 736,200 n/a
Capital of Burford Andrea Muller 21-23 June 22 724 † 72,395 † n/a
Centric Christopher O’Shea* 24 June 22 83 40 151 n/a
City of London investment Jeanne Stabile 23 June 22 437 21,850 0.01%
digital box David Joseph (CFO) June 22 22 9 54,000 0.50%
DP Eurasia Shyam Bhartia/Hari Bhartia/Pratik Pota* 24 June 22 55 419,007 43.65%
EFJ investments Neal Wilson (PDMR) 29 June 22 121 116,492 2.81%
Sustainable forestry Richard Davidson 28 June 22 107 26,750 n/a
Sustainable forestry Sarika Patel 28 June 22 107 21,400 n/a
Metals of the future Jardee Kininmonth (ce) 24 June 22 9 † 29,757 † 0.10%
GSK Dr. Hal Barron (PDMR) June 22 22 3,422 † 41,993 † n/a
Harworth Lynda Shillaw (CE) 27 June 22 153 29,999 n/a
Harworth Alastair Lyons (ch) 30 June 22 147 24,718 n/a
GI design Anders Hedlund 28-30 June 22 80 79,824 23.50%
GI design Stewart Gilliland (ch) 28 June 22 73 36,400 0.06%
AI Insig Richard Bernstein (ch) 30 June 22 29 28,680 12.55%
Specifications Robin Totterman (CEO) 29 June 22 290 99,998 18.30%
Specifications Chris Kay (CFO) * 29 June 22 290 23,200 2.10%
TVI Andrew Cosslett (ch-d) 28 June 22 69 208,948 n/a
lords Shanker Patel (ce) * 01 Jul 22 73 720 396 51.70%
M&G Edward Braham * 29 June 22 197 79,236 n/a
M&G Kathryn McLeland (CEO) 30 June 22 194 99,495 n/a
Menhaden Resource Efficiency Ben Goldsmith (PDMR) * 07-24 June 22 102 27,347 1.59%
Naked Wines Darryl Rawlings (ch) 27 June 22 157 † 117,242 † 0.12%
NetScientific John Clarkson (ch) 27 June 22 67 40,000 n/a
Orcadian Energy Alan Hume (CFO)** 30 June 22 35 80,000 6.10%
Therapeutic Roquefort Stephen West (ch) 30 June 22 9 24,816 6.73%
Taylor Wimpey Clodagh Moriarty 29 June 22 119 29,776 n/a
THG Charles Allen (ch) 27 June 22 86 992 141 n/a
Trinity Exploration and Production Nicholas Clayton (ch) 29 June 22 102 20,480 0.08%
Warehouse REITs stephen barrow 01 Jul 22 145 24,988 n/a
Whitbread Chris Kennedy 01 Jul 22 2,436 24,843 n/a
Zotefoams David Stirling (ec) 30 June 22 273 40,950 1.01%
Sell
Company Director/PDMR Date Price (p) Overall value (£) Bet size
Dynamic AB Tony Best (PDMR) * 23 June 22 1,095 1,000 373 25.79%
Churchill China David O’Connor (CE) 24 June 22 1,400 112,000 0.20%
Churchill China David Taylor (CFO) 24 June 22 1,400 98,000 0.40%
Churchill China James Roper (PDMR) * 24-29 June 22 1,400 25,200 9.00%
Curtis Banks Nikki Presley (PDMR) 30 June 22 275 199,848 n/a
lords Chris Day (CFO) 01 Jul 22 73 675,000 n/a
lords Tim Holton (PDMR) 01 Jul 22 73 675,000 n/a
* Spouse/Family/Close associate. ** placement / open offer † Converted from $ /A$