Sir Tom Hunter: ‘significant stake’

Sir Tom Hunter said he stood by his decision to back the THG despite the e-commerce company’s collapse in value.

The entrepreneur said he had taken £100m out of the business and he continues to hold a “significant stake”.

Sir Tom took a 3.75% pre-IPO stake in the company, formerly The Hut Group, when it was priced at 500p a share.

But the shares nosedived following a botched capital markets presentation in October when £1.85 billion was wiped from its value in one day to leave it worth £3.48bn.

Shares in the Manchester-based business were trading yesterday at 214.5p.

Sir Tom sold down his holding before investors became alarmed over suggestions that Softbank may not take up an option to invest further in the business.

A spokesman for the Scottish entrepreneur said: “THG plc has been a stand out investment for us and since we first invested years back we have taken out over £100m.  

“We continue to hold a significant stake and believe Matt Moulding [founder] is one of the best entrepreneurial disrupters of his generation and are proud to be investors with him.”

Annual accounts for Sir Tom’s West Coast Capital investment vehicle, show listed investments, which had a market value of £74.9m as at 31 March 2021, had a market value of £24.2m at the date of signing the latest financial statements (21 December).

Speaking to Daily Business, Sir Tom said the fall in the value of the company “would only have affected me if I had sold the shares.”

He declined to comment on speculation that Mr Moulding wanted to de-list THG.

West Coast reported “another solid year of progress” with no external debt and equity sitting at over £200m.

Significant progress is being made with several investments, not least Winchburgh with six house builders on site, three new schools coming on stream in 2022 and the marina opening for business in the Spring.

Sir Tom added: “We can see ourselves in Winchburgh for 15 years.”

A donation of £29.6m has been made to The Hunter Foundation, similar to last year’s contribution.

On the current restrictions imposed by the Scottish Government, Sir Tom said that “if businesses were good before the pandemic then it was for the government to make them good again. This is easier said than done, but these are the tough decisions that governments have to take.”

Asked if he thought the government may have over-reacted to the crisis, he said: “We have to trust them on this and err on the side of caution.”

On the government’s attitude to business, he added: “They tell us they are listening, but I will judge them on their actions.”

He added that it will be entrepreneurs who will lead the recovery.

“My view is that this is the time for entrepreneurs who can act quickly and pivot their businesses.”

Sir Tom, who made his fortune by selling his Sports Division retail business in the 1990s, added: “I am very glad I am not in high street retail [at this time]. On the other hand, online retail is a compelling proposition.”

The accounts show that former Bank of Scotland executive Peter Cummings has joined the board.