By Kristy Dorsey

Online retail company The Hut Group (THG), whose investors include Scottish tycoon Tom Hunter, has upgraded its profit forecast after fourth quarter sales came in soundly ahead of expectations.

The Manchester-based company, which floated on the London Stock Exchange in September, added more than 3.5 million new active customers in the final three months of last year as demand for beauty and sports nutrition products surged. It runs the Lookfantastic, Glossybox and Zavvi websites, along with beauty brands such as Espa and Illamasqua and sports nutrition company Myprotein.

Sales across all its channels rose by 51 per cent in the fourth quarter to £558.7m, beating previous expectations for an increase of between 40% and 45%. Following this “strong finish” to 2020, the company is now predicting full-year revenue growth of between 30% and 35%, compared to its previous estimate of 20% to 25%.

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Mr Hunter was an early investor in THG, which is headed by co-founder Matthew Moulding, who serves as both executive chairman and chief executive. The company currently employs about 10,000 people globally.

The group’s £5.4 billion flotation is reported to have valued Mr Hunter’s stake in the business at around £150m. Mr Moulding holds a 25% stake in the business.

Mr Moulding said THG has started re-investing capital raised by the IPO, with £360m spent on mergers and acquisitions, primarily in the US beauty sector. He added that the majority of the 3,000 new jobs created during 2020 were based in the UK.

Shares in THG closed 1% higher in yesterday’s trading at 798p.