A secretive firm that blew the whistle on a string of corporate failures has published a withering report on billionaire Matt Moulding’s shopping and technology conglomerate The Hut Group after £2.6billion was wiped off its value in one month.
The Analyst, run by Mark Hiley, has advised its City clients to bet on a further slide at the group – now known as THG – branding the ‘controversial’ owner of brands from LookFantastic and MyProtein as ‘overhyped’.
The Mail on Sunday has seen a copy of the top secret report, which was circulated among institutional City investors just days ahead of a pivotal briefing to shareholders on Tuesday.
The Analyst is recognised as the whistleblower that sounded the alarm in 2014 over Wirecard, which last year filed for insolvency with debts of more than £3billion.
Blast: The Analyst has published a withering report on THG headed by Matt Moulding (pictured with PM Boris Johnson)
It also declared that shares in Carillion and Debenhams were worthless well ahead of the firms collapsing.
The Analyst raises concerns over the prospects for THG’s Ingenuity tech business, now central to the valuation of the firm following a deal with Japanese giant SoftBank that values the division at £4.5billion.
It also says expectations of the division’s growth are ‘unrealistic’ – and growing doubts make the stock ‘a compelling short’, referring to the stock market practice of making money from a decline in a share price.
The document, dated October 1, forecasts THG shares could reach a low of £2.60 over the next two years as the City wakes up to the group’s limitations.
The shares have already fallen from £7.99 in January, and closed on Friday at £4.53.
Critics say THG has failed to convince investors of its strategic plans, including splitting its business units into separate companies.
John Gallemore, co-founder and boss of its Ingenuity arm, admitted to The Times yesterday: ‘Undoubtedly we have done a poor job explaining what we do.’
The report also flagged audit errors in 2019 and, more recently, recurring exceptional charges and deteriorating free cash flow as areas of concern.
Moulding is on Tuesday expected to brush aside corporate governance concerns, insisting he ‘conforms to or exceeds’ standards.
The Mail on Sunday last weekend revealed how THG’s share price had plummeted below the £5 value placed on the stock at the time of the public offering a year ago as big investors reduced their stakes.