Matt Moulding, the entrepreneur who created the £7 billion ecommerce giant The Hut Group today declared he would gift £100 million of his shares in the company to charity and give over all of his salary to good causes.
The move will make the cosmetics and health products tycoon one of the most generous charity donors in the UK.
He told the Evening Standard: “I’m from a working class background in Colne, Lancashire.
“Comprehensive school, low down the ladder of the wealth scale. So to be in a position where I can do this is hard to believe. It’s a no brainer. I hope it is just the start.
“Nobody [out there] really knows you, but you spend your life with minimal resources and suddenly you have the opportunity to do this,” he added. “I am more proud of being able to do this than all the THG performance numbers.”
Everybody who makes serious money in this country typically has made it themselves
He revealed that after THG’s bumper flotation six months ago, Bill Gates wrote him a letter congratulating him and asking what his philanthropic plans were.
“I already knew what I was going to do at that point,” he said, although he could not disclose it due to the stock market sensitive nature of the share transfer.
The deal could be announced today because the six months lock-up period for pre-IPO investors has now expired, meaning he was able to transfer his stock.
The date also means 200 THG staff can sell shares they were given in the flotation. Seventy four of them got more than £1 million of shares from their long term incentive schemes which have been running for the last decade.
Asked why it was that more Americans than British tycoons do philanthropy, he denied it was due to a cultural difference in the mindset of the wealthy, rather that there were more self-made entrepreneurs with the wealth to give.
“So many large companies here are run by management teams brought in to operate them rather than entrepreneur.
“The more growth companies we can get listed in the UK, the more philanthropy will come through naturally. In America, the numbers are just astounding and the more money, the more philanthropy.”
The sum of shares he is donating represents the equivalent of 100% of the profit his Moulding Capital property company could make over the next 100 years as a result of acting as landlord to THG’s premises.
There has been controversy among some investors that Moulding was landlord in a private capacity to his publically-owned THG business.
Alongside bumper full year earnings figures today, the company said it had already donated £300,000 to charities since last year’s IPO instead of paying Moulding and his co-director John Gallemore their salaries.
Moulding will transfer the £100 million of shares to his family’s charity, The Moulding Foundation, which is already active and has recently pledged £5 million to support building a new campus at The Seashell Trust , a residential school for seriously disabled children in the North West.
He and his wife currently hold 319 million shares, or 25%, of the group, worth around £2.23 billion and will have around 305 million after the transfer.
Moulding said: “I’m just so lucky that I come from this country because you get that opportunity no matter where you come from.
“If you look at the Rich List, it seems like 99% of it people that were working class and have made money. Everybody who makes serious money in this country typically has made it themselves.”
The Hut Group is an ecommerce health and beauty products retailer which also has a fast growing business offering to run third party retailers’ ecommerce retail operations for them under contract.
Homebase is among those putting hundreds of millions of pounds of online sales being managed through THG.
In its maiden annual results as a listed company, it reported group revenues up 41.5% to £1.6 billion and underlying profit up 354.2% to £151 million. The group generates strong cashflows, bringing in £177 million of cash for the year, with net cash standing at £282.8 million at the end of the year to 31 December.
Revenue growth of its outsourced e-commerce operations known as THG Ingenuity Commerce was 160%.
However, the company made a statutory loss of £482 million before tax due largely to the one-off cost of paying out shares to 200 staff for their long term incentive plans which vested in the IPO.
The group, which has upgraded its financial forecasts three times since the IPO, today reiterated its previous guidance of revenue growth for 2021 of 30-35% on the year.
Moulding acknowledged some investors were disappointed at not having another upgrade but said: “We’ve upgraded three times already. Yes, we’re feeling really strong for the year but we are not going to go changing our [forecast] numbers yet.”
The company also today announced it was massively ramping up its global operations with plans to add 3.6 million square feet to its current 2 million square feet of warehouse and manufacturing operations across the world.
“It’s a serious ramp up,” said Moulding, saying it would involve 3000 new jobs this year, 1000 of which will be for apprentices and graduates and mostly in the UK.
Since the IPO, Moulding has spent $350 million buying US beauty website Dermstore.com which is now expected to mean 20% of the group’s revenues will come from the States. It also bought the beauty retailer Perricone MD.