THG PLC (LSE:THG) full-year results come around on Tuesday after an interesting few months for the Hut Group owner that has seen the shares enjoy a strong rebound, gaining two new activist investors and a new contract for its 'end-to-end e-commerce business' Ingenuity.
The share price has risen almost 50% since the start of the year to just under 80p, which might sound good but is still down almost 90% from the 500p at which its £5.4bn initial public offer was priced in late 2020.
Newly formed activist investor Kelso Group Holdings PLC (LSE:KLSO) announced in January that it has built up a stake (at an average of 54.5p) and a couple of weeks ago seemed happy enough to have topped up its stake, while also providing some advice for THG boss Matthew Moulding and chair Charles Allen ahead of the results on how to get that market value back on the way up, including getting a move on with their proposed move from London Stock Exchange’s standard list to a premium listing.
There were also some helpful titbits that could be apparent in the coming week's results, including a request for clearer details with results on THG's different division’s contributions, profits and tax losses; with Kelso saying “there is a clear path to enhancing shareholder value through more financial visibility, which we hope is detailed in the pending results”.
A share buyback was also requested “soon”, as well as a call for the company to “reinvigorate” its relationship and communications with the investment community.
“THG chief executive Matthew Moulding doesn’t seem the type to welcome interference in his business,” said one City analyst, "but other shareholders may welcome a new party putting pressure on the board to make changes".
Adding to the pressure, activist hedge fund Sparta Capital, set up by former Elliott Advisors executive Franck Tuil, was revealed to have joined Kelso on the shareholder register last month.
There is not much in Kelso's requests that most investors could argue with, so it remains to see if the company will comply, having not enjoyed the best results from some earlier attempts to connect with City investors and analysts.
Moulding, THG's founder and largest shareholder with a 22% stake, said he was going to give up his golden share, which gives him the power to veto hostile takeover approaches, in order for the company to move to a premium listing, though apparently he is yet to do so.
These results will be a good chance to see if the pressure from two activists is enough to get him to bend to outsiders' demands.