The Hut Group boss Matthew Moulding said it has no plans to float amid concerns about generous valuations and volatile share prices.
Moulding’s comments come after fashion retailer Fat Face abandoned its float plans, citing “equity market conditions” as potential floats fail to impress.
Moulding said he has observed high valuations from other IPOs and volatile share prices but The Hut doesn’t need to “get caught in the cross-fire”. He added that The Hut has no need to raise funds as it has returned £13m to investors, which include private equity group Balderton and big retail names Sir Terry Leahy and Sir Stuart Rose.
“It would have been all too easy to rush to market with the incredibly frothy valuations,” he told the Financial Times.
Moulding, who owns 17% of The Hut, said: “It has been down to how hard do you want to push on your own valuation, at IPO. That sets the mark. Hence you have seen [some very high] valuations. Everyone needs to see how that settles down first. We don’t have any need to get caught in that crossfire.”
Share prices of a number of recent floats such as electricals etailer AO World are below their debut prices.
Moulding added: “A lot of investors will look to have lost a lot of money and so there will be a reflection point where they try to understand better the business models. And, also, we need to see some results from those businesses that come to market.”
The Hut looked at floating in 2011. It is likely to seek a listing within the next two years, but Moulding denied it might miss the boat.
“It doesn’t bother me if the stock market – the tech stocks – crashes 90% in the next two years. It only really matters if you need to raise funds,” he said.
The Hut also revealed that in the year to December 31 pre-tax profit increased from £308,000 to £3.97m and EBITDA increased from £10.1m to £15m. Total sales increased from £157.2m to £184.3m. It also generated £22.3m of cash and aims to increase this to between £25m and £30m, up from £24m at year end.
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