The Hut Group 2017 Annual Accounts

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Your Chief Funding Officer for raising Seed and Series A
The Hut Group is one of the largest tech companies to be founded in the North West of England backed by Balderton Capital.
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
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Annual Report & Accounts
For the year ended 31 December 2017 The Hut Group Limited.Company Number 06539496
Contents 
Highlights 
2
Group International Sales 
3
Strategic Report 
4
Directors' Report 
40
Independent Auditor's Report to the  
44 
members of The Hut Group Ltd
Consolidated Statement of  
46 
Comprehensive Income
Consolidated Statement of Financial Position 
47
Consolidated Statement of Changes in Equity 
48
Consolidated Statement of Cash Flows 
49
Notes to the Financial Statements 
50
Company Only Financial Statements 
78
Company Balance Sheet 
80
Company Statement of Changes in Equity 
81
Notes to the Company Financial Statements 
82
+47%
228M
+38%
600M
Revenue
2017
2016
2015
In Strategic Investments
EBITDA
Bank Facility
From May 2018
Highlights
Group International Sales
70%
63%
50%
UK
International
2
3
Annual Report and Accounts 2017
Strategic report
Shareholders
Name
%
Matthew Moulding & Controlled Management Equity1
26.7
Kohlberg Kravis Roberts & Co
15.0
Balderton Capital
14.3
Sofina Partners S.A.
9.0
Oliver Nobahar-Cookson (held via Offshore Trust)
7.7
BlackRock Funds
7.5
Old Mutual
7.4
Others
12.4
100.0
Fully diluted shareholding of any party with a 5% or greater shareholding  
in THG (as at 31 March 2018)
1 Matthew Moulding has the beneficial interest in 20% of the 26.7% shareholding,  
although he has full control of the whole 26.7%
5
4
Progress in 2017
2017 has been another year of explosive growth for THG,  
powered by our proprietary technology ecosystem, 
Ingenuity. Revenue has grown by 47% to 736m and 
EBITDA by 38% to 69m (9% of sales).
We continue to deliver on our strategy of driving  
rapid internationalisation with 70% of our sales  
coming from outside the UK, a year-on-year increase  
of 7% and we further developed the THG Brands  
business with 58% of sales from our own brands. 
To accelerate the development of the THG model we 
carefully selected acquisitions in key vertical markets, 
investing 164m in strategic acquisitions this year. 
We enhanced Ingenuity 's end-to-end capability 
through acquiring Hangar Seven, a digital content 
studio, and UK2, a web hosting business, as well  
as continuing to build our portfolio of brands adding  
ESPA and Illamasqua. We further grew our 
international beauty retail footprint by acquiring  
RY.com.au and became Europe's largest beauty box 
provider when we added Glossybox to our growing 
beauty box and advent calendar proposition.
We also continued to invest organically, spending  
25m on developing Ingenuity functionality and  
internationalisation capability and 39m of capital 
on infrastructure projects including manufacturing, 
distribution, supply chain, and office accommodation 
whilst employing a further 1,884 people this year to 
take our total headcount to over 4,000 at year end. 
2017 has also been a standout year for us operationally, 
we commissioned our 1m sq ft warehouse, manufacturing 
and fulfillment centre in Cheshire, a production facility  
in Kentucky and we acquired a beauty manufacturing 
plant with ESPA. We continue to invest in our 
operational capability with a warehouse and 
manufacturing facility in Wroclaw, Poland  
opening in 2018. 
International Sales Mix
Sales from Own Brands
Revenue
501
334
736
2015
2016
2017
42%
35%
49%
Revenue m 
CAGR % (3 years)
Gross Profit
318
211
126
2015
2016
2017
GP m 
CAGR % (3 years)
53%
41%
59%
EBITDA
69
50
30
2015
2016
2017
Adjusted EBITDA m 
CAGR % (3 years)
49%
41%
52%
Cash in Hand
187m
174m
142m
200m
150m
100m
50m
2015
2016
2017
Banking Facility
515m
345m
210m
600m
2015
2016
2017
2018 to date
300m
500m
600m
100m
Operating Cashflow
51
88
42
2015
2016
2017
Operating Cashflow m
+38% 
EBITDA
228m 
In Strategic 
Investments
183m 
Of Equity 
Raised
+47% 
Revenue
2015
2016
2017
50%
63%
70%
2015
2016
2017
52%
52%
58%
6
7
Annual Report and Accounts 2017
THG ideas with momentum 
Our Business Model 
THG is an international technology company  
focussed on digital retail in the beauty and  
wellbeing sectors. Founded in 2004, by CEO  
Matthew Moulding, to develop an ecommerce 
technology platform, THG now operates 166  
localised websites retailing to customers in  
164 countries.
THG is powered by Ingenuity, our proprietary  
global technology ecosystem. We wholly own  
and operate a globally integrated end-to-end 
technology stack that spans hosting, warehousing  
and fulfilment, data science and ecommerce 
technologies through to integrated payment  
solutions with customer service.
 
This seamless integration makes Ingenuity a unique 
technology platform proven to power brand growth  
on a global scale; our own brands and retail sites,  
as well as providing platform services for some of 
the world's most innovative organisations. 
By owning the whole customer journey from 
manufacturing our products, selling them direct  
to consumers via our own websites, and dispatching 
from our warehouses, we can deliver high quality 
products and experiences to customers whilst 
maintaining an industry leading cost base. 
We will continue to invest in our business model  
to ensure we continue to be the leading global  
online beauty and wellbeing provider.
Internationalisation
Direct to Consumer
Data Driven Retail
8
9
Annual Report and Accounts 2017
THG powered by Ingenuity
Built over the last decade, Ingenuity is our proprietary 
technology ecosystem that is engineered for vertically 
integrated ecommerce. It powers all of our own 
brands and retailers and is key to our ability to 
internationalise as it supports multiple currencies  
and payment methods, and provides the tools for  
us to put data at the heart of our retail experience.
Ingenuity drives personalised brand experiences 
and global transactions through our proprietary 
algorithms. Optimised search and responsive 
design help to drive transactions and post purchase 
engagement is driven through automated eCRM, 
product bundling, and reward and referral systems. 
Ingenuity simplifies the transaction journey through  
one-page checkout, integration to our fulfilment 
platform and fast page load across the globe.
All of this is underpinned by our global footprint  
of 29 data centres, on demand infrastructure,  
and high performance network. Ingenuity  
provides the ultimate hosting performance for  
our brands, our retailers and our brand partners.
Our ambition for Ingenuity is to be a global  
platform leader and alongside our own brands  
and retailers we already power some of the  
world's leading businesses including Nintendo,  
The Daily Mail Group, Honda and Hero Cycles.
42 
Currencies  
Traded Worldwide
166 
Localised  
Websites
29 
Footprint of  
Global Data Centres
32 
Local and Global  
Payment Methods
22m 
Worldwide Customer 
Database
500m 
Annual Visits to THG 
Operated Websites
10 
Tbps Total 
Network Capacity
350k 
Route Optimisations  
Each month
70% 
International  
Sales Mix (in 2017)
193 
Shipping Destinations
35 
Languages 
Supported
10 
GbE Premium  
Network
450 
Dedicated 
Engineers
>30 
Courier 
Integrations
Powered by 
93% 
Growth in Brand 
Partner Revenue
Transaction & 
Finance Management
Warehousing  
& Fulfilment
Hosting
Content & 
Creative Services
Data 
Science
Translation & 
Language Services
Customer 
Services
Ecomm 
Tech Platform
11
Annual Report and Accounts 2017
10
Strategic platform investments 
 
Ingenuity facilitates digital first content and acquiring 
Hangar Seven in April 2017 has allowed us to scale and 
productise our content and creative services further 
across the Group. We now operate an end-to-end  
content production facility, from driving the strategy,  
to concepting and storyboarding, to video and 
photography production. 
Hangar Seven delivers global digital impact with 
localised content powered by data and insight.
With an integrated in-house digital studio we are able 
to rapidly create content assets and videos, driving 
our online marketing activities across all sites and 
customer touch points.
In May 2017, we completed our first technology 
acquisition, UK2, a web hosting business, which  
has allowed us to significantly develop our technology 
ecosystem. We now have 29 global data centres situated 
in strategic locations, with access to multiple high 
quality transit and peering providers. 100TB provides 
exceptionally high bandwidth allowing us to respond  
to customer needs, for example video hosting. 
UK2 is now a core part of our technology proposition, 
and its high performance infrastructure will facilitate 
our ability to increase capacity, speed and resilience  
for our global brands.
7 
Studio Locations Across 
Europe and the US
10 
GbE Premium 
Network
166 
Producers, Photographers, 
Stylists, Designers and 
Creative Directors
29 
Footprint of  
Global Data Centres
140k 
Sq ft of Photographic  
Studios
10 
Tbps Total 
Network Capacity
12
13
Annual Report and Accounts 2017
Warehouse and fulfilment
2017 was a year of unprecedented operational 
reorganisation as we built out the foundations for  
our global fulfilment and manufacturing footprint.
Our wholly owned 1m sq ft Cheshire based production 
and distribution facility was fully commissioned in late 
summer 2017. The facility is powered by our proprietary 
Warehouse Management Software, Voyager. During  
the year, our onsite engineering team made over  
650 service and cost enhancing software changes.  
We expect investment in the software to continue  
as the site moves towards maturity in 2018.
In 2017, the foundations were laid and building 
commenced on our Poland based European 
production and distribution facility, expected to  
open in Autumn 2018. The site will also be powered 
by Voyager. Ahead of the build of our European  
Centre, we opened a satellite facility in a nearby 
location in Poland to expedite the move into  
that region.
To support our production and distribution facility 
in Kentucky, USA, we opened a satellite fulfilment 
centre in Reno, Nevada, to service the West Coast  
and to underpin our Beauty Subscription Box 
acquisition, we commissioned two European  
satellite facilities in Sweden and Poland.
Post year end, we have finalised details of our new 
build Content Studio facility, located in the North  
West of England, with building to commence in 2018  
of a 165k sq ft Content Studio. A number of our existing 
content studios will be consolidated into this state  
of the art facility.
In addition to the above new projects, we exited a 
further 16 fulfilment facilities in the year, four legacy 
UK Food production and fulfilment facilities, and we 
inherited a further 12 facilities globally with M&A in the 
year which were exited and absorbed within our core 
infrastructure in the UK, Europe and North America.
14
15
Annual Report and Accounts 2017
THG Brands overview
The global beauty and wellbeing markets are  
being transformed by digital channel shift and  
the explosion of high growth, small and medium  
sized independent brands. We are building a  
portfolio of these brands and are uniquely  
well-placed to become the global digital leader. 
We have expertise in scaling brands direct  
to consumer, our global retail sites provide  
a platform to fuel growth, we manufacture  
products in-house at our facilities around  
the globe, and Ingenuity delivers operational 
efficiencies while internationalising rapidly,  
therefore, we are able to tackle these structural  
changes at speed, something traditional brands  
cannot easily respond to. 
Retailing over 800 prestige brands in 164  
countries provides us with unique data-driven  
insights into industry trends and international  
growth opportunities, helping to shape our  
long-term brand strategies. 
We have supplemented our brand portfolio with  
the acquisition of beauty subscription business, 
Glossybox, which has increased our ability to  
drive brand education and adoption, test innovation, 
whilst introducing new customers to our brands.
We plan to make more acquisitions in this space and  
plug them into Ingenuity's technology ecosystem to:
 
 Improve efficiency and profitability;
 
 Drive direct to consumer sales through  
both own brand and reseller websites;
 
 Improve international sales mix;
 
 Drive education and adoption through  
targeted sampling and subscription services;
 
 Improve quality and deliver cost synergies  
through vertical integration and in-house 
manufacturing.
16
17
Annual Report and Accounts 2017
Strategic brand investments
In September 2017, we acquired one of the world's 
leading spa and skincare brands, ESPA. The products  
are sold in over 700 luxury spas across 50 countries 
and prestige retail outlets including Liberty London 
and Harvey Nichols. 
The ESPA treatments delivered in spas all over the 
world has created strong brand awareness and affinity 
which makes it an attractive brand to grow direct to 
consumer, harnessing our retail websites and the 
power of Ingenuity. 
This acquisition complements the THG business 
model, as ESPA is vertically integrated, adding  
beauty manufacturing to our significant expertise  
in the sports nutrition market. 
We have already made significant progress by 
integrating ESPA with Ingenuity, delivering cost 
synergies and improving direct to consumer sales.  
In 2018, we plan to internationalise the ESPA  
offering further. 
12%
34%
Uplift in Profitability  
Post Acquisition
Increase in Direct to 
Consumer Participation
18
19
Annual Report and Accounts 2017
Strategic brand investments
In October 2017, we acquired colour cosmetics  
brand, Illamasqua, which is used by professional  
makeup artists around the world.
It is a cult brand renowned for award-winning, 
professional-grade products with rich cultural 
heritage. Bringing Illamasqua into our own  
brand portfolio has allowed us to increase NPD  
(New Product Development) frequency, helping to  
move the brand into the contemporary segment. 
Through integration with Ingenuity we have  
delivered efficiencies and have begun to focus  
on strategic business-to-business partnerships,  
as well as driving online direct to consumer sales.  
282%
43%
<1 
Uplift in Profitability  
Post Acquisition
Increase in Direct to 
Consumer Participation
Week to Integrate  
to Ingenuity
20
21
Annual Report and Accounts 2017
Manufacturing
A key part of our brand portfolio strategy is vertical 
integration and the ability to manufacture in-house.  
At our state of the art 65k sq ft production facility  
which resides inside our 1m sq ft Omega site in 
Cheshire, we manufacture over 80% of our Myprotein 
products in-house. These are manufactured to  
British Retail Consortium standards where we have  
been certified AA Grade for the last four years.  
We also hold ISO 9001, Informed Sports and Soil 
Association certification to allow us to manufacture 
across these ranges. 
We have numerous quality procedures in place 
throughout the whole of our production process,  
to ensure we continue to deliver the highest quality 
products in Europe. As part of this, we test every  
single raw material on entry into our factory and  
every finished product before it leaves our site  
using Near Infra-Red technology and UKAS  
accredited external testing partners ALS.
We continued to invest in our manufacturing capability 
with the acquisition of ESPA, which produces the majority 
of its products in-house in its manufacturing facility in 
Frome, Somerset which are certified to ISO 9001 2015 
standards, and fully commissioning our sports nutrition 
production facility in Kentucky. In 2018, we will open 
another manufacturing facility in Wroclaw, Poland for 
the Central European market. Our ability to invest in 
global manufacturing plants is a key strategic pillar  
to achieving international growth for our brands. 
UK
Cheshire 
Somerset
Poland
Wrocaw (2018)
USA
Kentucky
18,367MT  
Of Product Produced  
in 2017
82% 
Of Nutrition Products  
Manufactured In-House
8M+ 
Units Produced in Our  
Beauty Manufacturing  
Facility in 2017
22
23
Annual Report and Accounts 2017
Since we acquired Myprotein in 2011, the THG 
model has facilitated rapid growth through direct 
to consumer sales and aggressive international 
expansion. It is now a global leader in the direct 
to consumer sports nutrition and apparel market 
having harnessed the power of our technology  
ecosystem. Myprotein is now available in 106 
countries, across 35 languages and 74% of our  
sales in 2017 came from international markets. 
In 2017, we continued to drive impressive international 
penetration with outstanding year-on-year growth 
in Asia of almost 500% as well as continuing to 
develop high growth categories such as vegan, 
ready to eat and clothing. 
112
Shipping Destinations
34
Local Courier Networks
180
International Ambassadors
29
Payment Processors
Our business model allows us to localise our offering 
for high growth international markets, for example 
manufacturing our products in-house allows us to 
cater to local tastes. In 2017, we launched milk tea 
and matcha tea flavoured proteins for the Japanese 
market, and our platform, content and language 
expertise allows us to create a location specific 
customer experience. 
Americas
174% CAGR FY14-17
UK
19% CAGR FY14-17
Asia
961% CAGR FY14-17
Europe
57% CAGR FY14-17
Other
540% CAGR FY14-17
24
25
Annual Report and Accounts 2017
THG Retail
Across our 45 retail sites we sell over  
1,000 brands with 100% authorised supply.  
Our data driven approach and end-to-end  
technology ecosystem has allowed us to  
become one of the world's biggest online  
resellers of branded beauty products,  
with a portfolio of reseller brands across  
the globe. 
In 2017, we invested in our subscription  
offering, acquiring Glossybox, which  
enhances our ability to test innovation  
and drive brand adoption. 
After acquiring Lookfantastic in 2010 and  
integrating the business onto our platform  
in 2011, we have driven rapid internationalisation. 
We have been able to leverage the THG model,  
launching new markets and reaching customers  
across our 22 local language sites, selling over  
660 prestige brands across 26,000 SKUs. 
In 2017, Lookfantastic had a 71% international  
sales mix, up from 54% in 2015 and 65% in 2016. 
71%
660
International Sales Mix
Prestige Brands Sold  
on Site
26
27
Annual Report and Accounts 2017
In 2017, our beauty boxes were a significant 
contribution to our retail business, with our 
Lookfantastic advent calendars having their  
best ever year. Our beauty boxes provide a  
great platform to grow our new customer base 
along with increasing revenue through conversion  
into full size products. To further scale our beauty  
box business globally we acquired Glossybox in  
August 2017, an international beauty box leader. 
Glossybox, founded in 2011 in Berlin, is Europe's  
number one provider of beauty box subscription 
services. Operating in 10 core markets, with offices  
in the UK, Europe and the USA. Its business model 
is a subscription service for a box of beauty products.
With strong existing foundations and infrastructure  
in subscription models we were set up to accommodate 
the scope of Glossybox. Our proprietary ecommerce 
technology platform already underpins the successful 
and growing subscription models of Lookfantastic 
Beauty Box, MyGeekBox, ZBox and PopInABox. 
Acquiring Glossybox's office in Berlin, one of  
Europe's best tech and startup hubs, opened up  
a strategic opportunity for us to build out another  
tech-hub for the Group. We continue to invest in  
talent in this market and as of December 2017  
we had 118 people operating out of our Berlin HQ.
118
People Employed at Our  
New European HQ in Berlin 
at the End of 2017
10
Number of Territories 
Now Served 
45%
EBITDA Margin Increase  
Since Acquisition
28
29
Annual Report and Accounts 2017
In 2017, we invested heavily in our talent function, 
including internal communications, leadership 
academies and office infrastructure. In 2018,  
we plan to hire 2,000 more employees. 
In 2017, we built up our THG Academy offering across 
the Group. We have built a bench of leaders for future 
acquisitions by running four senior leadership 
courses, providing bespoke training, mentoring  
and coaching to prepare our high potential talent 
for more senior opportunities, many of which have 
emerged through acquisitions. Our People team  
has been heavily involved in integrating the talent  
we have gained through our six acquisitions of 2017,  
and we have been able to provide a number of wider  
THG opportunities for high quality employees who 
have joined THG. Following an employee survey in  
mid-2017, we have also run compulsory manager 
training to improve the performance of managers.
We also presented our first Gender Pay Report  
for the Group as at 5 April 2017. Our median pay  
gap of 6% is well below the national average  
and we pay bonuses to a greater proportion  
of our female employees, than we do men. 
When our Technology Division is excluded  
then our gender pay gap falls to 2%,  
and in like-for-like roles, such as  
Customer Services Advisor or  
Warehouse Operative, the  
difference is negligible  
at +/- 1%.  
Our aspiration is to be the number one destination  
for ambitious talent. Our unique high performance  
and meritocratic culture encourages ambition, 
innovation and career growth at an exceptional rate. 
The Group's talent continues to experience major 
sustained growth, with thousands of staff located 
across the globe. At the end of 2017, we had over  
4,000 employees and we created 1,884 new jobs  
during the year.
We are building an incredibly diverse pool of talent:
 
66 nationalities
 
56% male to 44% female
 
Average age of 29
Over the course of 2017, our global footprint  
has expanded significantly; we are building global 
teams and now have offices in 10 cities including:
World class talent 
UK
London 
Manchester
Europe
Berlin, Germany 
Lviv, Ukraine 
Stockholm, Sweden 
Wrocaw, Poland (2018)
Australia 
Sydney
USA
New York 
Salt Lake City
San Antonio
30
31
Annual Report and Accounts 2017
Financial review
Revenue
The Group generated total sales growth of 47%  
during the year, consistent with the three year sales  
CAGR of 49%, with sales increasing from 501m  
to 736m. 
The Rest of the World (all geographies outside of the 
UK and Europe) delivered significant growth of 103%, 
increasing to 41% of the total revenue in the year (2016: 
29%). In the process, this has become our largest 
sector, reflecting our platform driven penetration 
into international markets. We have consolidated  
and strengthened our positions in the US, Australia, 
China, Japan and South Korea. We will consolidate  
our position in Asia as we open our first fulfilment 
centre in that continent in the current year.
European growth remains strong at 26%, now comprising  
29% of the total revenue (2016: 34%). We expect to 
further strengthen our position in this market as we 
commission our new European beauty and wellbeing 
production and fulfilment facility in Poland. This will 
allow us to further improve our service proposition 
on the continent as well as substantially increase our 
capacity to produce and distribute own brand products. 
The above achievements have been reflected in  
a Queen's Award for Enterprise in the International  
Trade category in 2018. Revenue within the UK also 
continues to excel as we bring more own branded 
products and technology services to that market.  
This is reflected in sales growth of 21% during the year.
The Group's returns rate from customers remains  
low at 1% (2016: 1%), continuing to reflect the high 
repeat, highly personalised nature of the retail  
and product offering.
Gross Profitability
The gross profit margin increased by 120bps in the  
year to 43.3% (2016: 42.1%).  
This level of improvement in the year was driven  
by a number of factors:
 
 Continued evolution in the business model 
leading to ongoing shift in sales mix towards more 
profitable, own brand beauty and wellbeing sales;
 
 Investment in wellbeing supply chain both in 
breadth and the volume of in-house production;
 
 Acquisition of two more beauty brands (ESPA  
and Illamasqua), one beauty subscription business 
(Glossybox) and a beauty reseller, (RY.com.au),  
in the year; and 
Depreciation and Amortisation
Total depreciation and amortisation costs were 
39m (2016: 20m), a reflection of our accelerated 
investment in growth projects and infrastructure:
 
 The Group invested 51m in tangible assets during 
the year (2016: 129m). This primarily relates to 
further investment in our Omega and Kentucky 
production and distribution facilities as well as 
post-acquistion investment in the UK2 network 
infrastructure. 13m of tangible assets were 
acquired through the six business combinations  
in the year. Over 125m has been invested in the 
UK fulfilment and production centre (Omega)  
which is freehold owned and with no operating 
leases in place. 
 
 The Group continued to invest in its proprietary 
technology platform during the year to facilitate 
global scale and to address the ever-changing 
social trends of our customers across the globe. 
25m was invested in the platform up from 19m  
in 2016. The net book value of the platform is 41m.
 
 The Group has acquired a range of brands and 
intellectual property as it continues to expand  
its international offering as part of the Group's 
long-term strategy. During the year these 
acquisitions resulted in additional intellectual 
property and brands of 3m and 24m respectively. 
Further information on the Group's acquisitions 
during the year can be found in note 10.
Exceptional Items
In order to understand the underlying performance  
of the Group, certain costs included within distribution 
and administrative costs, have been classified as 
exceptional items. These items principally relate to:
 
Distribution - 15m
 
 During the year the Group fully commissioned  
the 1m sq. ft. Cheshire based food production  
and distribution facility (Omega). We expect that 
the site will take a year to reach maturity as we 
continue to develop the proprietary software  
that controls the operation. Costs relating to  
the ongoing integration of this facility continue  
to be included within exceptional items.  
 
 As acquisitions are integrated onto the THG 
platform, Ingenuity, any legacy warehouses are 
exited. During the year we ceased operations in  
12 such facilities on three continents. Associated  
costs are non-recurring in nature.
 
 
 Acquisition of UK2 and Hangar Seven delivering 
economies of scale across the Group with regards 
to hosting and content creation respectively whilst 
also enhancing Group gross margin.
Operating Expenses
Distribution costs remain well controlled at  
16.8% of sales, a marginal improvement on the  
prior year (17.0%). Given our strong international  
mix this illustrates the benefits in having an  
end-to-end fulfilment model that utilises an 
extensive integrated local courier network.
Costs associated with the ongoing transition in to 
Omega, our production and distribution facility,  
have been recognised within exceptional items 
alongside various acquisition related costs.
Underlying administrative costs (staff, marketing, 
other administrative but excluding exceptional 
items, share-based payments, depreciation and 
amortisation) increased during the year to 126m 
(17.1% on sales) from 76m in 2016 (15.2% on sales), 
partially reflective of investment to support  
2018 growth plans. 
Marketing costs increased by 10bps in the year to 
8.5% on sales (2016: 8.4%) driven by increased digital 
marketing activities as we continued to invest in 
own brand penetration and customer acquisition in 
international territories. Over 4.7m new customers 
transacted with the Group in the year, which combined 
with increasing annual repeat behaviour, positions 
the Group well to further accelerate growth into 
international territories from this growing base. 
Staff costs excluding distribution increased by 
140bps to 7.1% of sales (2016: 5.7%), due to the 
significant investment in scalability, international 
growth and the success of the graduate talent 
programme.
Other administrative costs represent just 1.5%  
on sales (2016: 1.1%) which reflects the efficient 
nature of the operating model, even as the  
business grows.
  
 
Administration - 15m
  
 Legal, financial and taxation due diligence  
costs on the six businesses acquired in the year.
 
 Post-acquisition reorganisation and restructuring 
costs associated with the deals completed in the 
year, including dual site and technology decollation 
costs, redundancies, onerous lease costs and other 
costs of a one-off nature including store closures.
Please refer to note 4 for further information.
Share-based Payments
Part of the strategy of attracting, retaining and 
motivating talent, is a share option scheme. In total, 
there are 117 participants in the Group's share schemes.  
The non-cash IFRS 2 share-based payments charge for 
the year relating to the share options in issue  
during the year was 1.8m (2016: 2.0m). 
Share-based payments also contain a cash charge for 
the year amounting to 2.3m (2016:1.1m). A number  
of employees, who met certain service criteria during  
the year, were given the opportunity to benefit from 
the share options they held ahead of the original 
vesting date. These staff members were paid the  
value of their share options early and as a result  
their share options were cancelled.
The Group issued no Employee Share Scheme (ESS) 
shares during 2017. As a result, there is no charge 
related to share issue (2016: 0.7m).
Number of options in issue 1 January 2017
383,894
Number of share options cancelled during the year
(38,931)
Number of share options in issue 31 December 2017
344,963
Number of employees holding share options 31 December 2017
117
Finance Costs
Finance costs of 7.2m (2016: 2.4m) primarily relate 
to interest on the Group's increased 515m bank facility 
and amortisation of arrangement fees. In early May 2018, 
the bank facility was increased further to 600m with 
maturity in May 2021. 
Financial review 
34
35
Annual Report and Accounts 2017
 
The Group agreed a further significant increase  
in its available corporate debt facilities in 2017,  
as we added three new banks to our current facility.  
The total facility increased to a 515m facility 
representing an additional commitment of  
213m provided by the lenders listed here. 
In May 2018, we further increased the facility with  
the same lender group to 600m, including a 51m 
accordion facility. 
The amended facility runs to May 2021 with an  
optional one-year further extension. 
The facility will be used for any strategic initiatives  
we may undertake. The scale and flexibility of the 
facility provides us with substantial capacity to 
accelerate our international expansion plans and  
fund future acquisitions. 
HSBC
8 Canada Square 
Canary Wharf 
London 
E14 5HQ
Lloyds Bank Plc
25 Gresham Street 
London 
EC2V 7HN
Barclays Bank Plc
1 Churchill Place 
London 
E14 5HP
JP Morgan Securities Plc
25 Bank Street 
London 
E14 5JP
Santander UK Plc
2 Triton Square 
Regent's Place 
London 
NW1 3AN
The Governor and Company  
of the Bank of Ireland 
Bow Bells House 
1 Bread Street 
London 
EC4M 9BE
The Royal Bank  
of Scotland Plc
36 St Andrew Square 
Edinburgh 
EH2 2YB
Silicon Valley Bank
Alphabeta 
14-18 Finsbury Square 
London 
EC2A 1BR
Citibank N.A  
London Branch
33 Canada Square 
Canary Wharf 
London 
E14 5LB
PDL Europe Holdings LP
1100-10830 Jasper Avenue 
Edmonton 
Alberta 
T5J 2B3 
Canada
Banks
600m
Facility From May 2018
2021
Maturity of the Facility 
10
Bank Syndicate
36
37
Annual Report and Accounts 2017
 
38
39
Annual Report and Accounts 2017
Principal risks and uncertainties 
The execution of the Group's strategy and the 
management of its business are subject to a number 
of risks and uncertainties. The principal risks and 
uncertainties include competition, supply chain  
risk, technological change and employee hiring  
and retention.
Competitor activities are constantly monitored  
to ensure that the business can react in a timely 
manner to such activity and ensure that the Group 
maintains a competitive position in each market in 
which it operates.
Significant effort is placed on working with suppliers to 
manage the potential risk of interruptions and delays 
in supply or distribution that may adversely impact 
on trade. The Group has multiple delivery routes and 
options, and uses multiple delivery service providers,  
to reduce the level of dependency on any single provider. 
There is continuous monitoring of service levels and 
warehouse handling to ensure goods are delivered in 
a timely manner. All products are on relatively short 
lead times, with a steady flow of products into the 
warehouse, enabling the supply chain to be diverted to 
alternative locations if necessary within a manageable 
time frame.
The Group's technology platform provides a real time, 
single data view of the business enabling trading and 
operational decisions to be based on high quality 
management information. On-going investment is 
made in the IT systems to ensure that they are able to 
continue to respond to the needs of the business and 
do not become obsolete. Business recovery processes 
are in place to minimise the effects of damage or 
denial of access to the infrastructure of systems.
The Group is able to attract and retain high calibre 
employees through a combination of competitive basic 
salaries and performance based bonuses coupled with 
share option schemes, which are open to individuals at 
every level in the business.
Financial risk management objectives and policies 
Senior management are aware of their responsibility for 
managing risks within their business units. The head  
of each business unit reports to the Board on the status 
of these risks through management reports. Risk is 
regularly reviewed at board level to ensure that risk 
management is being implemented and monitored 
effectively. The Board is supported by a Group Internal 
Audit function which assists the Board in fulfilling its 
oversight responsibilities. 
The Board's policy is to ensure that the business 
units are empowered to operate effectively and 
appropriately, bearing in mind the requirements 
for timely decision making and commercial reality. 
Through management reports, risks are highlighted 
and monitored to identify potential business risk areas 
and to quantify and address the risk wherever possible.
Commercial and general risk 
Standard form contracts are provided by the Group's 
in-house legal team for commercial use and to ensure 
the commercial functions negotiate within approved 
parameters. Insurance policies are regularly reviewed 
to ensure these are adequate, appropriate and in line 
with the nature, size and complexity of the business.
Financial risk management 
The Group's operations involve exposure to credit risk, 
liquidity risk, currency risk and interest rate risk. 
The Board's policies for managing these financial  
risks are implemented by the Chief Financial Officer.
Credit risk 
The majority of the Group's customers pay in advance 
for purchases. Where services are supplied without 
advance payment, a credit review of the customer 
is undertaken at the point the order is received and 
subsequently on a periodic basis. The maximum 
credit risk exposure is represented by the carrying 
value as at the balance sheet date (see note 15).  
The credit risk on bank balances is considered to  
be low as they are held with A rated counterparties.
Liquidity risk 
The Group regularly forecasts cash flow and maintains 
an appropriate balance of cash and debt facilities 
to ensure that sufficient funds are available from 
trading to cover future expenses and capital 
expenditure.
Currency risk 
The Group receives an increasing proportion of its 
revenue in foreign currency. In addition, certain key 
suppliers invoice in euros and US dollars. The Group  
aims to naturally hedge these transactions and 
where appropriate uses financial instruments 
in the form of foreign currency swaps to hedge 
future currency cash flows. The fair value of 
foreign currency swaps outstanding at the balance 
sheet date is detailed in note 14 to the financial 
statements.
Interest rate risk 
The Group's interest rate risk arises from therevolving 
credit facilities in place. The Group reviews its 
exposure to variable interest rates on a regular  
basis and fixes rates.
By order of the Board
J P Pochin 
Company Secretary 
29 May 2018
Risk Management
 
40
41
Annual Report and Accounts 2017
The Directors and advisors of the Group who were in office during the year from 1 January 2017 and up to the 
date of signing the financial statements are listed below with the Directors' interests detailed in note 26.
Dividends
No dividends will be distributed for the year ended 31 December 2017 (2016: nil).
The Board returned 3.8m (2016: 17.0m) of equity to minority shareholders in a continued effort to provide 
ongoing shareholder liquidity.
Directors
M J Moulding
R J Pennycook
A Monro
B Liautaud
(appointed 5 September 2017)
A Duckworth resigned 17 April 2018
W M Evans
Z Byng-Thorne
Professional advisor
J P Pochin
Company secretary
(appointed as a director on 18 April 2018)
J A Gallemore
D P Murphy
I McDonald
E J Koopman
N J M Gheysens
(appointed 5 September 2017)
P J Gedman
Directors' report
Directors, advisors and Directors' interests
 
42
43
Annual Report and Accounts 2017
Research and development 
The Group's ecommerce and technology services 
divisions are powered by its proprietary technology 
platform. In addition to providing end-to-end  
ecommerce functionality, the platform provides 
the Group with a number of important competitive 
advantages. Specifically, the commercial teams 
review real time transactional and customer insight 
data which informs trading decisions, which are then 
executed within short time frames. In order to remain 
competitive and to promote innovation, investment  
into the technology platform in terms of people  
and capital expenditure is a priority for the Group. 
The Group has over 350 full time staff dedicated to 
the continual enhancement of the platform.
Employees 
Applications for employment by disabled persons are 
always fully considered, bearing in mind the respective 
aptitudes and abilities of the applicant concerned. 
In the event of members of staff becoming disabled, 
every effort is made to ensure that their employment 
with the Group continues and the appropriate training 
is arranged. It is the policy of the Group that the training, 
career development and promotion of a disabled person 
should, as far as possible, be identical to that of a 
person who does not suffer from a disability.
The Group seeks to retain high calibre employees 
through a combination of competitive basic salaries 
and performance based bonuses coupled with a share 
options scheme, which is open to individuals at every 
level in the business.
Consultation with employees or their representatives 
has continued at all levels, with the aim of ensuring 
that their views are taken into account when decisions 
are made that are likely to affect their interests. 
Communication with all employees continues through 
the Group intranet, briefing groups and distribution of 
the Annual Report.
Directors' qualifying third party and 
pension indemnity provisions 
There were no qualifying third party and pension 
indemnity provisions during the year or in place at  
the date the Directors' Report was approved.
Donations 
During the year, the Group made several charitable 
donations totalling 99,630 (2016: 34,000).
Statement of directors' responsibilities 
The Directors are responsible for preparing the 
Strategic Report, the Directors' report and the 
consolidated and company financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law 
the Directors have prepared the Group financial 
statements in accordance with International Financial 
Reporting Standards ('IFRSs') as adopted by the European 
Union, and the Parent Company financial statements 
in accordance with Financial Reporting Standard 
101 Reduced Disclosure Framework (FRS 101). Under 
company law the Directors must not approve the 
financial statements unless they are satisfied that  
they give a true and fair view of the state of affairs  
of the Group and the Company and of the profit or  
loss of the Group for that period.
In preparing these financial statements, the Directors 
are required to:
 
select suitable accounting policies and then apply 
them consistently;
 
make judgements and accounting estimates that 
are reasonable;
 
for the consolidated accounts, state whether 
IFRSs as adopted by the European Union have 
been followed;
 
for the Parent Company accounts, state whether 
applicable UK Accounting Standards have been 
followed, subject to any material departures 
disclosed and explained in the Parent Company 
accounts; and
 
prepare the financial statements on the going 
concern basis, unless it is inappropriate to 
presume that the Group and the Company will 
continue in business.
The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the Group and Parent Company's transactions 
and disclose with reasonable accuracy at any time the 
financial position of the Group and Parent Company and 
enable them to ensure that the financial statements 
comply with the Companies Act 2006. They are also 
responsible for safeguarding the assets of the Group 
and Parent Company and hence for taking reasonable 
steps for the prevention and detection of fraud and 
other irregularities.
Going concern 
The Directors have prepared the cash flow forecasts 
for a period of 12 months from the date of the approval 
of the financial statements. On the basis of the cash 
flow projections and projected headroom against the 
available facilities, the Directors are satisfied that it is 
appropriate to prepare the financial statements of the 
Company and Group on a going concern basis.
Statement of disclosure of information to auditors 
For all persons who are Directors at the time of approval 
of the annual report:
 
so far as the Directors are aware, there is no relevant 
audit information of which the Company's auditors 
are unaware; and
 
they have taken all the steps that they ought to have 
taken as a director in order to make himself aware of 
any relevant audit information and to establish that 
the Company's auditors are aware of that information.
Financial risk management 
Information in respect of financial risk management for 
the Group has been disclosed within the Strategic report.
2018 Outlook and post balance sheet events 
Trading 
The key trading trends in evidence throughout 2017 
have continued in 2018, re-affirming management's 
confidence for the 2018 outlook. Management anticipate 
a strong level of revenue growth in 2018, driven both 
by continued growth in the UK and overseas, coupled 
with selective acquisitions. The shifts in the revenue 
mix in evidence over recent years are also expected to 
continue in 2018 with both own brand and international 
revenues expected to continually increase as a 
percentage of the total Group revenues.
The gross margin progression reported over successive 
recent years is also expected to continue in 2018, 
through a combination of increased own brand sales 
plus increased in-house production, following continued 
investment in the manufacturing centre of excellence.
The Group's strong cash flow model and continued 
working capital improvements will provide further 
liquidity to continue to re-invest in the business's 
infrastructure, most notably the proprietary platform.
Equity 
In the first quarter of 2018, two of the Group's largest 
shareholders increased their stake in THG by 40m 
each, providing additional firepower for imminent M&A, 
and valuing the Group at over 2.5bn. During the same 
period, the Group also took the opportunity to buy back 
c.16m of shares, at discounted pricing, providing further 
value creation to shareholders.
Acquisitions 
On 3 May 2018, the Group acquired the entire share 
capital of M Beauty Limited and Make Money Limited 
operating under the brand Eyeko, a specialist 
eye cosmetic comp. Renowned for its innovative, 
high quality mascaras, liquid liners and brow gels, 
Eyeko takes its British heritage and utilises Korean 
expertise to deliver an innovative range of products. 
Eyeko products are stocked in multiple countries 
including the UK, US, Australia and Europe through 
notable retailers such as Selfridges, Space NK, Ulta 
and Sephora. The brand is also available direct to 
consumers through eyeko.com and THG-owned 
lookfantastic.com.
Refinancing 
In early May 2018, the Group increased its existing 
corporate debt facilities to 600m. The extended facility 
is with the same ten bank syndicate (see page 37) and 
runs to May 2021 with an optional one year further 
extension. The 600m facility is a mixture of term 
loan and revolving credit facility and includes a 51m 
accordion facility. The increased facility provides  
up to 400m of cash for any strategic initiatives the 
Group may undertake, including possible acquisitions 
in beauty & wellbeing categories, as well as 
infrastructure development and substantial  
capacity to accelerate our expansion plans.
Auditor 
Ernst & Young LLP have expressed their willingness to 
continue in office in accordance with Section 487(2) 
of the Companies Act 2006. The auditor's registered 
office is as follows:
Ernst & Young LLP 
2 St Peter's Square 
Manchester M2 3EY
By order of the Board
J P Pochin 
Company secretary 
29 May 2018
 
44
45
Annual Report and Accounts 2017
material misstatements, we are required to determine 
whether there is a material misstatement in the 
financial statements or a material misstatement of 
the other information. If, based on the work we have 
performed, we conclude that there is a material 
misstatement of the other information, we are  
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed 
by the Companies Act 2006 
In our opinion, based on the work undertaken in  
the course of the audit:
 
the information given in the strategic report  
and the Directors' report for the financial year  
for which the financial statements are prepared  
is consistent with the financial statements; and
 
the Strategic Report and Directors' Report have 
been prepared in accordance with applicable 
legal requirements.
Matters on which we are required to report 
by exception 
In the light of the knowledge and understanding  
of the Group and the Parent Company and its 
environment obtained in the course of the audit,  
we have not identified material misstatements in  
the strategic report or Directors' report.
We have nothing to report in respect of the following 
matters in relation to which the Companies Act 2006 
requires us to report to you if, in our opinion:
 
adequate accounting records have not been kept 
by the Parent Company, or returns adequate for  
our audit have not been received from branches 
not visited by us; or 
 
the Parent Company financial statements are  
not in agreement with the accounting records  
and returns; or 
 
certain disclosures of Directors' remuneration 
specified by law are not made; or
 
we have not received all the information and 
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the directors' responsibilities 
statement on page 42, the Directors are responsible 
for the preparation of the financial statements and for 
being satisfied that they give a true and fair view, and 
for such internal control as the Directors determine 
is necessary to enable the preparation of financial 
statements that are free from material misstatement, 
whether due to fraud or error.
In preparing the financial statements, the Directors 
are responsible for assessing the Group's and the 
Parent Company's ability to continue as a going 
concern, disclosing, as applicable, matters related 
to going concern and using the going concern basis 
of accounting unless the directors either intend to 
liquidate the Group or the Parent Company or to cease 
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit 
of the financial statements 
Our objectives are to obtain reasonable assurance 
about whether the financial statements as a whole 
are free from material misstatement, whether due 
to fraud or error, and to issue an auditor's report 
that includes our opinion. Reasonable assurance is 
a high level of assurance, but is not a guarantee that 
an audit conducted in accordance with ISAs (UK) will 
always detect a material misstatement when it exists. 
Misstatements can arise from fraud or error and are 
considered material if, individually or in the aggregate, 
they could reasonably be expected to influence the 
economic decisions of users taken on the basis of 
these financial statements.
A further description of our responsibilities for  
the audit of the financial statements is located  
on the Financial Reporting Council's website at  
https://www.frc.org.uk/auditorsresponsibilities.  
This description forms part of our auditor's report.
Alastair John Richard Nuttall 
(Senior statutory auditor) 
For and on behalf of Ernst & Young LLP,  
Statutory Auditor 
Manchester 
30 May 2018
Notes:
1. The maintenance and integrity of the The Hut Group Limited web site is  
the responsibility of the Directors; the work carried out by the auditors does 
not involve consideration of these matters and, accordingly, the auditors 
accept no responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the web site.
2. Legislation in the United Kingdom governing the preparation  
and dissemination of financial statements may differ from legislation  
in other jurisdictions.
Opinion 
We have audited the financial statements of  
The Hut Group Limited ('the Parent Company')  
and its subsidiaries (the 'Group') for the year ended 
31 December 2017 which comprise the consolidated 
statement of comprehensive income, the consolidated 
statement of financial position, the consolidated 
statement of changes in equity, the consolidated 
statement of cash flows, the related notes 1 to 28,  
the Parent Company balance sheet, the Parent 
Company statement of changes in equity and the 
related notes to the Parent Company financial 
statements 1 to 9, including a summary of significant 
accounting policies. The financial reporting framework 
that has been applied in the preparation of the Group 
financial statements is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by 
the European Union. The financial reporting framework 
that has been applied in the preparation of the Parent 
Company financial statements is applicable law and 
United Kingdom Accounting Standards, including FRS 
101 "Reduced Disclosure Framework" (United Kingdom 
Generally Accepted Accounting Practice).
In our opinion:
 
the financial statements give a true and fair view  
of the Group's and of the Parent Company's affairs 
as at 31 December 2017 and of the Group's loss for 
the year then ended;
 
the Group financial statements have been properly 
prepared in accordance with IFRSs as adopted by 
the European Union;
 
the Parent Company financial statements have 
been properly prepared in accordance in with 
United Kingdom Generally Accepted Accounting 
Practice; and 
 
the financial statements have been prepared 
in accordance with the requirements of the 
Companies Act 2006.
Basis for opinion 
We conducted our audit in accordance with 
International Standards on Auditing (UK) (ISAs (UK)) 
and applicable law. Our responsibilities under those 
standards are further described in the Auditor's 
responsibilities for the audit of the financial 
statements section of our report below. We are 
independent of the Group and Parent Company in 
accordance with the ethical requirements that are 
relevant to our audit of the financial statements in 
the UK, including the FRC's Ethical Standard, and 
we have fulfilled our other ethical responsibilities in 
accordance with these requirements.
We believe that the audit evidence we have obtained  
is sufficient and appropriate to provide a basis for  
our opinion.
Use of our report
This report is made solely to the Company's members,  
as a body, in accordance with Chapter 3 of Part 16 
of the Companies Act 2006. Our audit work has been 
undertaken so that we might state to the Company's 
members those matters we are required to state to 
them in an auditor's report and for no other purpose.  
To the fullest extent permitted by law, we do not accept 
or assume responsibility to anyone other than the 
company and the Company's members as a body, for 
our audit work, for this report, or for the opinions we 
have formed.
Conclusions relating to going concern 
We have nothing to report in respect of the following 
matters in relation to which the ISAs (UK) require us to 
report to you were:
 
the Directors' use of the going concern basis of 
accounting in the preparation of the financial 
statements is not appropriate; or
 
the Directors have not disclosed in the financial 
statements any identified material uncertainties 
that may cast significant doubt about the Group's  
or the Parent Company's ability to continue to adopt 
the going concern basis of accounting for a period 
of at least twelve months from the date when the 
financial statements are authorised for issue.
Other information
The other information comprises the information 
included in the annual report on pages 2 to 43,  
other than the financial statements and our auditor's 
report thereon. The Directors are responsible for the 
other information.
Our opinion on the financial statements does not 
cover the other information and, except to the extent 
otherwise explicitly stated in this report, we do not 
express any form of assurance conclusion thereon.
In connection with our audit of the financial 
statements, our responsibility is to read the other 
information and, in doing so, consider whether the 
other information is materially inconsistent with the 
financial statements or our knowledge obtained in the 
audit or otherwise appears to be materially misstated.  
If we identify such material inconsistencies or apparent 
Independent auditor's report 
to the members of The Hut Group Limited
 
46
47
Annual Report and Accounts 2017
Consolidated statement of comprehensive  
income for the year ended 31 December 2017
*Adjusted EBITDA is defined as operating profit before depreciation, amortisation, share-based payments and exceptional items.
The results for the year are derived from continuing activities. 
The comprehensive (expense)/income is 100% attributable to the owners of the Parent Company.
Consolidated statemement of financial  
position as at 31 December 2017
The financial statements on pages 46 to 77 were approved by the Board of Directors on 29 May 2018 and were 
signed on its behalf by:
J A Gallemore 
Director 
Registered number: 06539496
 
2017
2016
Note
'000
'000
Non-current assets
Intangible assets
11
434,691 
221,636
Property, plant and equipment
12
186,207 
152,049
620,898 
373,685
Current assets
Inventories
13
84,798
58,911
Trade and other receivables
15
43,734
17,857
Current tax asset
2,789
1,663
Cash and cash equivalents
16
186,729
174,286
318,050
252,717
Total assets
938,948
626,402
Equity
Ordinary shares
22
3,746
3,299
Share premium
22
277,380
94,260
Employee benefit scheme reserve
22
175
175
Merger reserve
22
615
615
Capital redemption reserve
22
518
518
Retained earnings
22
36,792
44,666
319,226
143,533
Non-current liabilities
Borrowings
18
397,467
299,999
Deferred tax
20
6,768
7,493
404,235
307,492
Current liabilities
Trade and other payables
17
205,432
166,456
Borrowings
18
9,230
8,156
Provisions
19
825
765
215,487
175,377
Total liabilities
619,722
482,869
Total equity and liabilities
938,948 
626,402
2017
 
2016
Before 
exceptional 
 Items
Exceptional 
Items (note 4)
Total
 
Before 
exceptional 
Items
Exceptional 
Items (note 4)
Total
Note
'000
'000
'000
'000
'000
'000
Revenue
2
735,652
-
735,652
501,376
-
 501,376
Cost of sales
(417,190)
-
(417,190)
(290,142)
-
(290,142)
Gross profit
318,462
-
318,462
211,234
-
211,234
Distribution costs
(108,331)
(15,315)
(123,646)
(79,721)
(5,272)
(84,993)
Administrative costs
(183,914)
(14,944)
(198,858)
(104,970)
(4,720)
(109,690)
Operating (loss)/profit
3
26,217
(30,259)
(4,042)
26,543
(9,992)
16,551
Adjusted EBITDA*
69,116
(30,259)
38,857
50,157
(9,992)
40,165
Depreciation
12
(16,815)
-
(16,815)
(6,181)
-
(6,181)
Amortisation
11
(21,969)
-
(21,969)
(13,580)
-
(13,580)
Share-based payments
7
(4,115)
-
(4,115)
(3,853)
-
(3,853)
Operating (loss)/profit
26,217
(30,259)
(4,042)
26,543
(9,992)
16,551
Finance income
8
315
-
315
61
-
61
Finance costs
8
(7,152)
-
(7,152)
(2,418)
-
(2,418)
(Loss)/profit  
before taxation
19,380
(30,259)
(10,879)
24,186
(9,992)
14,194
Income tax (charge)/credit
9
(3,829)
4,615
786
(4,976)
1,586
(3,390)
(Loss)/profit for the 
financial year
15,551
(25,644)
(10,093)
19,210
(8,406)
10,804
Other 
comprehensive income:
Exchange differences 
on translating foreign 
operations, net of tax
(1,209)
-
(1,209)
(245)
-
(245)
Total comprehensive 
(expense)/income for the  
financial year
22
14,342
(25,644)
(11,302)
18,965
(8,406)
10,559
 
48
49
Annual Report and Accounts 2017
Consolidated statement of changes in equity  
for the year ended 31 December 2017
Ordinary 
shares
Share 
premium
Employee 
benefit 
scheme 
reserve
Merger 
reserve
Capital 
Redemption 
Reserve
Retained 
earnings
Total 
Equity
Note
'000
'000
'000
'000
'000
'000
'000
Balance at 1 January 2016
2,743
13,748
175
615
457
45,565
63,303
Total comprehensive income  
for the year
-
-
-
-
-
10,559
10,559
Issue of ordinary share capital
483
81,882
-
-
-
-
82,365
Share buy-backs
(61)
(1,236)
-
-
61
(14,557)
(15,793)
Share-based payments
7
-
-
-
-
-
1,994
1,994
Bonus issue
134
(134)
-
-
-
-
-
Deferred tax effect of  
share-based payments
-
-
-
-
-
1,105
1,105
Balance at 31 December 2016
3,299
94,260
175
615
518
44,666
143,533
Balance at 1 January 2017
3,299
94,260
175
615
518
44,666
143,533
Total comprehensive expense 
for the year
22
-
-
-
-
-
(11,302)
(11,302)
Issue of ordinary share capital
22
447
183,120
-
-
-
-
183,567
Share buy-backs
22
-
-
-
-
-
(2,466)
(2,466)
Share-based payments
7
-
-
-
-
-
2,152
2,152
Deferred tax effect of  
share-based payments
20
-
-
-
-
-
3,742
3,742
Balance at 31 December 2017
3,746 277,380
175
615
518
36,792
319,226
Consolidated statement of cash flows  
for the year ended 31 December 2017
2017
2016
Note
'000
'000
Cash flows from operating activities
Cash generated from operations
24
50,555
87,607
Income tax received/(paid)
16
(2,591)
Net cash generated from operating activities before exceptional cash flows
50,571
85,016
Cash flows relating to exceptional items 
(34,141)
(9,992)
Net cash generated from operating activities
16,430
75,024
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired
10
(164,336)
(73,841)
Purchase of property, plant and equipment
(38,685)
(118,561)
Proceeds from sale of property, plant and equipment
55
-
Purchase of intangible assets
(32,919)
(32,551)
Interest received
315
100
Net cash used in investing activities
(235,570)
(224,853)
Cash flows from financing activities
Proceeds from issuance of ordinary shares net of fees
183,567
81,677
Share buybacks and related costs
(4,439)
(17,040)
Interest paid
(8,577)
(2,418)
Repayment of bank borrowings
(774,155)
(255,302)
Proceeds from bank borrowings
837,500
376,577
Capital element of finance lease payments
(2,313)
(914)
Net cash generated from financing activities
231,583
182,580
Net increase in cash and cash equivalents
12,443
32,751
Cash and cash equivalents at the beginning of the year
174,286
141,535
Cash and cash equivalents at the end of the year
16
186,729
174,286
 
50
51
Annual Report and Accounts 2017
Notes to the financial statements
Notes to the financial statements (continued)
1. Accounting policies
Basis of preparation 
The consolidated financial statements of The Hut Group 
Limited ("the Company") and its subsidiaries (together 
"the Group") have been prepared in accordance with 
International Financial Reporting Standards ("IFRS") 
as issued by the International Accounting Standards 
Board (IASB) and as adopted by the European Union 
(EU). The financial statements have been prepared  
on the historical cost basis except for derivatives 
which are held at fair value.
The accounting policies adopted by the Group in the 
current year are consistent with those adopted during 
the year ended 31 December 2016. There have been 
various accounting standards and amendments issued 
during the year that have no impact on the current year 
financial statements. IFRS 16 Leases continues to be 
assessed by the Group however any impact would be 
restricted to the operating leases liability as disclosed  
in note 21 of these financial statements.
IFRS 15 'Revenue from Contracts with Customers' 
replaces IAS 18 'Revenue'. This standard is effective 
for accounting periods beginning on or after 1 January 
2018. The Group expects that adoption will not have  
a material impact on the results or financial position  
of the Group. A detailed assessment of IFRS 15 will  
be completed during the year.
The Company is a private limited company and is 
incorporated and domiciled in the UK.
Going concern 
The Group meets its day-to-day working capital 
requirements through its banking facilities.  
The Group forecasts cash projections taking  
account of reasonably possible changes in trading 
performance demonstrating that the Group is able  
to operate within the level of its current facilities. 
After making enquiries, the Directors have a reasonable 
expectation that the Group has adequate resources to 
continue in operational existence for the foreseeable 
future. The Group therefore continues to adopt the 
going concern basis in preparing its consolidated 
financial statements.
Accounting policies 
The Group's key accounting policies are set out below. 
These policies have been prepared on the basis of the 
recognition and measurement requirements of IFRS 
standards in effect that apply to accounting periods 
beginning on or after 1 January 2017, and have been 
applied to 2016 comparatives.
a. Basis of consolidation 
The Group financial statements consolidate those  
of the Company and all of its subsidiary undertakings 
drawn up to 31 December 2017. Subsidiaries are all 
entities over which the Group has control. 
 
The Group exercises control through a majority of 
voting rights or board control. In the case of The Hut 
Management Company Limited ("Manco") the Company 
holds a 0.01% shareholding, however the Company  
has a separate class of share in Manco which gives 
it the right to control the appointment of Board 
Directors. Consequently, Manco has been consolidated 
within the financial statements on the basis that 
through Board control, the Group has the power to 
control the financial and operational policies of Manco. 
All subsidiaries have a reporting date of 31 December. 
 
All transactions and balances between Group companies 
are eliminated on consolidation, including unrealised 
gains and losses on transactions between Group 
companies. Where unrealised losses on intra-group 
asset sales are reversed on consolidation, the 
underlying asset is also tested for impairment from  
a Group perspective. 
 
Amounts reported in the financial statements of 
subsidiaries have been adjusted where necessary 
to ensure consistency with the accounting policies 
adopted by the Group. Profit or loss and other 
comprehensive income of subsidiaries acquired or 
disposed of during the year are recognised from the 
effective date of acquisition, or up to the effective  
date of disposal, as applicable.
b. Business combinations 
Business combinations are accounted for using 
the acquisition method under IFRS 3 'Business 
Combinations'. The consideration transferred by the 
Group to obtain control of a subsidiary is calculated  
as the sum of the acquisition-date fair values of assets 
transferred, liabilities incurred and the equity interests 
issued by the Group, which includes the fair value of any 
asset or liability arising from a contingent consideration 
arrangement. Acquisition costs are expensed as incurred. 
 
The Group recognises identifiable assets acquired, 
and liabilities assumed, including contingent liabilities, 
in a business combination regardless of whether they 
have been previously recognised in the acquiree's 
financial statements prior to the acquisition. Assets 
acquired and liabilities assumed are measured at their 
acquisition-date fair values. These fair values can be  
re-assessed for a period of 12 months from the date  
of acquisition based on information available at the  
date of acquisition. 
 
Goodwill is stated after separate recognition of  
other identifiable intangible assets. It is calculated as 
the excess of the sum of a) fair value of consideration 
transferred, b) the recognised amount of any non-
controlling interest in the acquiree and c) acquisition-
date fair value of any existing equity interest in the 
acquiree, over the acquisition-date fair values of 
identifiable net assets. If the fair values of identifiable 
net assets exceed the sum calculated above, the excess 
amount (i.e. gain on a bargain purchase) is recognised in 
profit or loss immediately. 
 
In determining whether a transaction is a business 
combination or an asset purchase, the Group takes into 
account the inputs, processes and outputs acquired in 
accordance with IFRS 3.
c. Segment reporting 
The Group is required to determine and present its 
operating segments based on the way in which financial 
information is organised and reported to the chief 
operating decision-maker (CODM). The CODM has been 
identified as the Board as it is the Board who makes the 
key operating decisions of the Group, and is responsible 
for allocating resources and assessing performance of 
the operating segments.
d. Revenue 
Revenue consists primarily of internet sales, which  
are sales recorded net of an appropriate deduction for 
actual and expected returns, fair value of loyalty points  
and sales taxes and are recognised upon dispatch from  
the warehouse at which point title and risk passes to  
third parties. 
 
Revenue for services provided is recognised by reference 
to the stage of completion as at the balance sheet date. 
Fees recognised in respect of memberships are recorded 
on a straight line basis over the membership period. 
 
Revenue for internet hosting contracts and domain 
renewal services (UK2) are recognised on a straight line 
basis over the relevant period. Income which is invoiced 
in advance is recorded as deferred income on the balance 
sheet and released to the profit and loss account over the 
periods in which the services are provided.
e. Share-based payments 
The Group operates share-based compensation 
plans, under which the Group receives services from 
employees as consideration for equity instruments 
(options or growth shares) of the Company. The fair 
value of the employee services received in exchange 
for the grant of the equity instruments is recognised  
as an expense. 
 
Non-market vesting conditions are included in 
assumptions about the number of equity instruments 
that are expected to vest. The total expense 
is recognised over the vesting period, which is 
the period over which all of the specified vesting 
conditions are to be satisfied. At the end of each 
reporting period, the Group revises its estimates  
of the number of equity instruments that are expected  
to vest based on the non-market vesting conditions, 
along with taking account of any equity instruments 
that may have been cancelled or modified in the 
period. It recognises the impact of the revision to 
original estimates, if any, in the income statement, 
with a corresponding adjustment to equity. 
 
Share subscriptions by employees in the Company  
that hold the growth shares, are included within  
the employee benefit scheme reserve. 
 
When the equity instruments are exercised, the Company 
issues new shares. The proceeds received net of any 
directly attributable transaction costs are credited to 
share capital (nominal value) and share premium when 
the equity instruments are exercised. 
 
Where an equity-settled award is cancelled (including 
when a non-vesting condition within the control of the 
entity or employee is not met), it is treated as if it had 
vested on the date of cancellation, and any cost not 
yet recognised in the income statement for the award 
is expensed immediately. Any compensation paid up 
to the fair value of the award at the cancellation or 
settlement date is deducted from equity, with any 
excess over fair value being treated as an expense in 
the income statement. 
 
The Group has an employee benefit trust (EBT)  
which facilitates an internal market for participants 
in employee share schemes to sell their shares in 
the Company. Shares held are recognised at cost as 
a deduction from shareholding equity. Subsequent 
consideration received for the sale of such shares  
is also recognised in equity.
 
52
53
Annual Report and Accounts 2017
f. 
Intangible assets  
Goodwill 
Goodwill represents the excess of the cost of 
acquisitions over the Group's interest in the fair value 
of the identifiable assets and liabilities (including 
intangible assets) of the acquired entity at the date 
of acquisition. Goodwill is recognised as an asset and 
assessed for any indications of impairment at least 
annually. Any impairment is recognised immediately in 
the income statement. For the purposes of impairment 
testing, goodwill is allocated to those cash-generating 
units that have benefited from the acquisition. If the 
recoverable amount of the cash-generating unit is less 
than its carrying amount, then the impairment loss is 
allocated first to reduce the carrying amount of the 
goodwill allocated to the unit and then to the other 
assets of the unit on a pro rata basis. 
 
On disposal of a subsidiary, the attributable amount 
of goodwill is included in the determination of the 
profit and loss on disposal.
Other intangible assets 
Other intangible assets include internally developed 
software, separately acquired customer lists, domain 
and trade names, brands and other intellectual property, 
including customer lists, acquired as part of business 
combinations.
Separately acquired intangible assets are measured at 
cost on initial recognition. Following initial recognition, 
intangible assets are carried at cost less any accumulated 
amortisation and impairment losses. 
 
The costs of acquiring and developing the platform  
and websites is capitalised separately as an intangible 
asset. Capitalised website costs include external  
direct costs of material and services and overheads, 
and the payroll and payroll-related costs for employees 
who are directly associated with website development 
projects.
Other internally generated intangible assets are not 
capitalised and expenditure is reflected in the income 
statement in the year in which expenditure is incurred.
Intangible assets are amortised on a straight line  
basis over their estimated useful economic life.  
Amortisation is included within administrative 
expenses in the income statement in the period to 
which it relates. The estimates of useful economic  
lives are reviewed on an annual basis and any changes 
are reflected as changes in amortisation period and  
are treated as changes in accounting estimates.
Brands with indefinite lives are reviewed for impairment 
on an annual basis. The useful economic life is reviewed 
on an annual basis to confirm that the indefinite life 
continues to be supportable.
The following useful economic lives are applied:
 Platform development costs
1-5 years
Brands 
5 years-indefinite
Intellectual property (including customer lists,  
domain and trade names)
2-10 years
g. Property, plant and equipment 
Property, plant and equipment are stated at historic 
purchase cost less accumulated depreciation. Cost 
includes the original purchase price of the asset and 
the costs attributable to bringing the asset to its 
working condition for its intended use. Depreciation  
is provided at the following annual rates in order to 
write off each asset on a systematic basis over its 
estimated useful life. 
At each reporting date, property, plant and equipment 
is reviewed for impairment if events or changes in 
circumstances indicate that the carrying amount may 
not be recoverable. When a review for impairment is 
conducted, the recoverable amount is assessed by 
reference to the net present value of expected future 
pre-tax cash flows of the relevant cash-generating unit 
or fair value, less costs to sell if higher. Any impairment 
in value is charged to the profit or loss in the period in 
which it occurs.
h. Borrowing costs 
Borrowing costs incurred in relation to bringing into 
use both tangible and intangible assets are capitalised 
as the expenditure is incurred on such assets and 
subsequently depreciated in line with the useful 
economic life of the relevant asset.
i. 
Inventories 
Inventories are valued at the lower of cost and net 
realisable value, on a weighted average cost basis.  
Cost of purchase comprises the purchase price 
including import duties and other taxes, transport  
and handling costs and any other directly attributable 
costs, less trade discounts. 
 
A provision is made to write down any slow-moving  
or obsolete inventory to net realisable value.
j. Financial instruments 
Financial assets 
Financial assets within the scope of IAS 39 are 
classified as loans and receivables.  
 
Derivative financial instruments 
The Group uses derivative financial instruments, 
such as foreign currency swaps, to hedge its foreign 
currency risks. Such derivative financial instruments 
are initially recognised at fair value on the date on 
which a derivative contract is entered into and are 
subsequently remeasured at fair value. Derivatives 
are carried as financial assets when the fair value is 
positive and as financial liabilities when the fair value  
is negative. Derivatives are not designated as hedges 
and accordingly, any gains or losses arising from 
changes in the fair value of derivatives are taken 
directly to profit or loss. 
 
Trade and other receivables  
Trade and other receivables are non-interest  
bearing and are initially recognised at fair value. 
Subsequently they are measured at amortised cost 
using the effective interest rate method less provision 
for impairment. A provision for impairment of trade 
receivables is established when there is objective 
evidence that the Group will not be able to collect 
all amounts due according to the original terms of 
the receivables. Significant financial difficulties 
of the debtor, probability that the debtor will enter 
bankruptcy or financial reorganisation, and default  
or delinquency in payments (more than 30 days 
overdue) are considered indicators that the trade 
receivable is impaired. 
 
Cash and cash equivalents 
Cash and cash equivalents comprise cash at bank 
and in hand and short-term deposits with an original 
maturity of three months or less. 
 
Financial liabilities and equity instruments 
Financial liabilities within the scope of IAS 39 are 
classified as financial liabilities at amortised cost.  
The Group has no financial liabilities at fair value 
through profit and loss and has no derivatives 
designated as hedging instruments.Equity instruments 
are classified according to the substance of the 
contractual arrangements entered into. An equity 
instrument is any contract that evidences a residual 
interest in the assets of the Group after deducting all 
of its liabilities. 
 
Trade and other payables 
Trade and other payables are non-interest bearing and 
are recognised initially at fair value and subsequently 
measured at amortised cost using the effective 
interest method. 
 
Bank borrowings 
Interest-bearing bank loans and overdrafts are initially  
recorded at fair value, which equals the proceeds 
received, net of direct issue costs. Finance charges, 
including premiums payable on settlement or redemption 
and direct issue costs, are accounted for using an 
effective interest rate method and are added to the 
carrying amount of the instrument to the extent that 
they are not settled in the period in which they arise.
k. Leased assets 
Finance leases 
Where assets are financed by leasing agreements 
that give rights approximating to ownership, the 
amount representing the outright purchase price is 
capitalised and the corresponding leasing commitments 
are shown as obligations to the lessor. The relevant 
assets are depreciated in accordance with the Group's 
depreciation policy or over the lease term if shorter. 
Net finance charges, calculated on the reducing 
balance method, are included in finance costs 
 
Operating leases 
Payments made under operating leases, net of any 
incentives received from the lessor, are charged to  
the profit or loss on a straight line basis over the  
period of the lease.
l. Onerous contracts 
A provision is made for onerous contracts, discounted 
at a risk free rate. This includes provision for future 
lease costs on disused warehouse space, based on 
management's best estimate of future rental costs 
and, if appropriate, rental income from sub-lease 
arrangements.
m. Exceptional items 
The Directors apply judgement in assessing the 
particular items, which by virtue of their scale and 
nature should be classified as exceptional items.  
Plant and machinery
3-20 years
Fixtures and fittings
3-10 years
Computer equipment and software
3-5 years
Freehold buildings
50 years
Motor vehicles
3-7 years
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
54
55
Annual Report and Accounts 2017
The Directors consider that separate disclosure of 
these items is relevant to an understanding of the 
Group's financial performance.  
 
Items deemed to be exceptional include certain 
items which are considered to be one-off and not 
representative of the underlying trading of the Group, 
including integration costs.
n. Taxation 
The tax expense included in the statement of 
comprehensive income and statement of changes  
in equity comprises current and deferred tax. 
 
Current tax is the expected tax payable based on  
the taxable profit for the period, and the tax laws that 
have been enacted or substantively enacted by the 
reporting date. Management periodically evaluates  
positions taken in tax returns with respect to situations 
in which applicable tax regulation is subject to 
interpretation. It establishes provisions where 
appropriate on the basis of amounts expected to  
be paid to the tax authorities.  
 
Current and deferred tax is charged or credited in the 
statement of comprehensive income, except when it 
relates to items charged or credited directly to equity,  
in which case the current or deferred tax is also 
recognised directly in equity. 
 
Deferred tax is recognised on differences between 
the carrying amounts of assets and liabilities in the 
financial statements and the corresponding tax bases 
used in the computation of taxable profit, and is 
accounted for using the balance sheet liability method.  
Deferred tax liabilities are generally recognised for 
all taxable temporary differences and deferred tax 
assets are recognised to the extent that it is probable 
that taxable profits will be available against which 
deductible temporary differences can be utilised. 
Such assets and liabilities are not recognised if 
the temporary difference arises from goodwill or 
from the initial recognition (other than in a business 
combination) of other assets and liabilities in a 
transaction that affects neither the tax profit  
nor the accounting profit.
The carrying amount of deferred tax assets is reviewed 
at each reporting date and reduced to the extent that 
it is no longer probable that sufficient taxable profits 
will be available to allow all or part of the asset to be 
recovered. Deferred tax is calculated at the tax rates 
(and laws) that are expected to apply in the period when 
the liability is settled or the asset is realised.
Deferred tax assets and liabilities are offset where 
there is a legally enforceable right to offset current 
tax assets against current tax liabilities and when the 
deferred tax assets and liabilities relate to income 
taxes levied by the same taxation authority on either 
the taxable entity or different taxable entities and 
where there is an intention to settle the balances  
on a net basis.
o. Foreign currency translation 
Functional and presentational currency 
Items included in the financial statements of each  
of the Group's entities are measured using the 
currency of the primary economic environment in 
which the entity operates ("the functional currency"). 
The consolidated financial statements are presented 
in Sterling, which is the functional and presentational 
currency of the majority of entities in the Group 
 
Transactions and balances 
Transactions denominated in foreign currencies  
are translated into the functional currency at 
the exchange rates prevailing on the date of 
the transaction. Monetary assets and liabilities 
denominated in foreign currencies are translated  
into Sterling at the rates of exchange at the reporting 
date. Exchange differences on monetary items are 
taken to the income statement. 
 
Group companies 
On consolidation, the assets and liabilities of foreign 
operations are translated into the functional currency 
of the Group at the rate of exchange prevailing at the 
reporting date and their statements of profit or loss 
are translated at exchange rates prevailing at the dates 
of the transactions. The exchange differences arising 
on translation for consolidation are recognised in OCI. 
On disposal of a foreign operation, the component 
of OCI relating to that particular foreign operation is 
recognised in profit or loss.
p. Significant estimates and judgements 
The preparation of financial statements in conformity 
with International Financial Reporting Standards as 
adopted by the EU requires management to make 
estimates and assumptions that affect the reported 
amounts of assets and liabilities and the disclosure 
of contingent assets and liabilities. Actual results 
could differ from these estimates and any subsequent 
changes are accounted for with an effect on the 
financial statements at the time such updated 
information becomes available. 
The most critical accounting policies in determining 
the financial position and results of the Group are 
those requiring the greatest degree of subjective  
or complex judgement and are detailed as follows:
Goodwill and intangible asset impairment reviews 
The Group is required to review goodwill, brands  
and intellectual property with indefinite lives annually 
to determine if any impairment has occurred. Intangible 
assets with finite lives are reviewed for impairment 
if events or changes in circumstances indicate 
that the carrying amount may not be recoverable. 
When a review for impairment is conducted, the 
recoverable amount of an asset or a cash-generating 
unit is determined based on value-in-use calculations 
prepared on the basis of management's assumptions 
and estimates. Refer to note 11 for further details of  
the value-in-use calculations.
Valuation of intangible assets arising from  
business combinations and assessment of brands 
with indefinite lives 
Business combinations may result in intangible assets 
such as customer lists and brands being recognised. 
These are valued using discounted cash flow methods 
which require judgements and estimates to be made in 
respect of future cash flows and discount rates. Refer 
to note 10 for customer lists and brands that have been 
recognised during the year. Furthermore, judgement is 
applied in assessing whether acquired brands have an 
indefinite useful economic life. Note 11 contains details 
of intangible assets with indefinite lives.
Capitalisation and amortisation of platform 
development costs 
Costs capitalised as platform development costs 
include direct external costs, such as consultancy 
costs and internal payroll costs. The capitalisation of 
internal costs is based on the amount of time spent by 
employees on capital projects. Judgement is applied 
in determining which costs meet the criteria for 
capitalisation as development costs. Refer to note 11 
for details of capitalised platform development costs.
The useful economic life of the platform is considered  
to be between one and five years dependent on the 
type of development work capitalised. The estimate  
of useful economic life is reviewed on a regular basis  
to ensure that this continues to be appropriate.
Share-based payments  
Critical estimates and assumptions are made in 
particular with regard to the calculation of the fair 
value of employee share options using appropriate 
valuation models. In addition, estimation is required  
in assessing the number of options expected to vest 
and the vesting periods of the awards. 
Exceptional items  
The Group separately identifies and discloses 
significant one-off or unusual items which can have 
a material impact on the absolute amount of profit 
from operations and the result for the year. These 
are termed 'exceptional items' and are disclosed 
separately in the statement of comprehensive income 
in order to provide an understanding of the Group's 
underlying financial performance. Exceptional items 
are judgemental in their nature and may not be 
comparable to similarly titled measures used by  
other companies. Further details of the exceptional 
items are provided on note 4.
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
56
57
Annual Report and Accounts 2017
The Group's principal activity is that of online retailing. The Group has made the following considerations in 
arriving at the disclosure in these financial statements.
IFRS 8 requires consideration of the Chief Operating Decision Maker (CODM) within the Group. In line with the 
Group's internal reporting framework and management structure, the key operating decisions and resource 
allocations are made by the Board. The Directors therefore consider the Board to be the CODM. Key internal 
reports reviewed by the CODM, primarily the Board management accounts, focus on the performance of the 
product categories.
Operations of the majority of the business are driven by the retail sales environment and hence have fundamentally 
the same economic characteristics. All operational decisions are focused on the performance of websites 
and the ability to utilise the technology platform that has been developed to drive profitability. The results 
of non-retail activities are not considered to be significant to those of the Group as a whole and have not 
been separately reported. The CODM reviews the Group results to Adjusted EBITDA level and therefore no 
reconciliation is required between the operating information and the information presented within these 
financial statements.
Below is an analysis of revenue by destination of delivery to customers:
2. Segment information
The non-cash IFRS two share-based payments charge for the year relating to the share options in issue during  
the year was 1.8m (2016: 2.0m). 
Share-based payments also contain a cash charge for the year amounting to 2.3m (2016: 1.2m) as a result of 
payments that were made to employees in return for the cancellation of their share options. 38,931 share options 
were cancelled in total.
The Group issued no Employee Share Scheme (ESS) shares during 2017. As a result, there is no charge related  
to a share issue (2016: 0.7m).
Total depreciation and amortisation costs have increased by 96% year-on-year, in line with gross profit, which  
is a reflection of the continued investment in the future growth of the Group, through expanding the physical 
infrastructure throughout the Group's warehouses and through investing in the development of the Group's 
proprietary technology platform to create an ever improving user experience, which in turn will generate  
higher levels of consumer loyalty.
3. Operating (loss)/profit
2017
2016
Note
'000
'000
Operating (loss) / profit has been arrived at after charging:
Employee costs
6
97,376
49,704
Share-based payments
7
4,115
3,853
Depreciation
12
 16,815
6,181
Loss/(profit) on disposal of property, plant and equipment
10
(7)
Amortisation
11
21,969
13,580
Operating lease rentals:
 Motor vehicles
-
20
 Land and buildings
3,302
5,527
2017
2016
'000
'000
UK
223,017
184,539
Europe
214,020
169,828
Rest of the world
298,615
147,009
735,652
501,376
All material non-current assets are based in the UK (95%) and the USA (5%) (2016: UK 100%).
Rendering of services represents 6% of total revenue (2016: 2%)
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
58
59
Annual Report and Accounts 2017
4. Exceptional items
Production and distribution facility
During the year the Group fully commissioned the 1m sq. ft. Cheshire based food production and distribution facility 
(Omega). It is expected that the site will take a year to reach maturity as the Group continues to develop the proprietary 
software that controls the operation. Costs relating to the ongoing integration of this facility continue to be included 
within exceptional items.
As acquisitions are integrated onto the THG Platform, Ingenuity, any legacy warehouses are exited. During the year 
operations ceased in 12 such facilities on three continents. Associated costs are non-recurring in nature.
Acquisition, legal and professional costs
Legal, financial and taxation due diligence costs on the six businesses acquired in the year are included within 
exceptional items.
Post-acquisition reorganisation and restructuring costs associated with the deals completed in the year, include  
dual site and technology decollation costs, redundancies, onerous lease costs and other costs of a one-off nature 
including store closures.
5. Auditors remuneration
2017
2016
'000
'000
Audit of the Company and consolidated financial statements
115
115
Other services:
Audit of the Company's subsidiaries
105
45
Corporate finance services
672
221
892
381
The aggregate amount of employee costs included above that have been capitalised within platform development  
costs was 21.2m (2016: 15.7m).
The costs incurred in respect of the Directors, who are regarded as the only key management personnel,  
were as follows:
2017
2016
'000
'000
Directors' emoluments
1,364
1,440
Highest paid director
488
595
2017
2016
Number
Number
Retail
873
689
Administration
563
376
Distribution
1,261
475
Information technology
525
293
3,222
1,833
Details of the Directors' share-based payments are included in note 26.
No retirement benefits are accruing to any of the Directors at 31 December 2017 (2016: nil).
The average number of employees (including executive directors) during the year was:
6. Employee costs and directors' remuneration
2017
2016
Note
'000
'000
Wages and salaries
107,717
59,549
Social security costs
10,401
5,506
Pension costs
483
324
Share-based payments
7
1,758
1,995
120,359
67,374
2017
2016
'000
'000
Production and distribution facility
15,315
5,272
Acquisition, legal and professional costs
14,944
4,720
30,259
9,992
Tax effect
(4,615)
(1,586)
25,644
8,406
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
60
61
Annual Report and Accounts 2017
During the prior year, the Group issued equity settled unapproved options to its employees. The options were valued 
using the Black-Scholes model with the following inputs:
7. Share-based payments
The IFRS 2 share-based payment charge for the current year is 1.8m (2016: 2.0m). Included within the  
share-based payment charge in the consolidated statement of comprehensive income is 2.3m (2016: 1.2m)  
in relation to options bought back by the Company from qualifying staff. There was no charge in relation to the 
issues of ESS shares to qualifying staff (2016: 0.7m).
The lowest exercise price of share options outstanding at the end of the period was 1.00 (2016: 1.00) and the 
highest exercise price was 8.25 (2016: 8.25).
8. Finance income and cost
2017
2016
'000
'000
Finance income
Bank interest receivable
315
61
Finance costs
Bank interest payable and charges
7,133
2,370
Finance lease interest
19
48
7,152
2,418
9. Income tax
2017
2016
Note
'000
'000
Current tax
Tax charge for the year
730
2,622
Adjustments in respect of prior year
(651)
(393)
79
2,229
Deferred tax
Origination and reversal of temporary differences
(1,237)
1,194
Adjustments in respect of prior year
372
(11)
Change in tax rates

(22)
20
(865)
1,161
Total income tax (credit)/charge
(786) 
3,390
2017
2016
'000
'000
(Loss)/profit before tax
(10,879)
14,194
(Loss)/profit before tax at 19.25% (2016: 20%)
(2,094)
2,839
Tax effects of:
Adjustments in respect of prior year
(284)
(405)
Non-qualifying depreciation
643
-
Expenses not deductible / non-taxable income
1,416
1,631
R&D enhanced deductions
-
(712)
Effect of higher tax rates in other jurisdictions
307
111
Losses not recognised
(1,026)
(52)
Effect of change in tax rate
252
(22)
(786)
3,390
The tax on the Group's (loss)/profit before tax differs from the theoretical amount that would arise using the 
weighted average tax rate as follows:
The standard rate of Corporation Tax in the UK changed to 19% (previously 20%) with effect from 1 April 2017. 
Accordingly, the Group's (loss)/profits for this accounting period are taxed at an effective rate of 19.25%.
The reduction of the main rate of Corporation Tax from 19% to 17% from 1 April 2020 was included within the 2016 
Finance Bill, as substantively enacted on 6 September 2016. Future profits will be taxed at the appropriate rate. 
Substantially all deferred tax balances as at 31 December 2017 have been calculated at 17% (2016: 17%), being the 
enacted rate at which the deferred tax is expected to reverse.
Regarding US tax reform, (being a substantial reduction in the US corporate tax rate, from the existing tax rate 
of 35% to 21%, with effect from 1 January 2018), this is substantively enacted for accounting purposes in 2017. 
As such, for US deferred tax balances the impact of the tax law change is reflected in the Group's financial 
statements as at 31 December 2017, with these balances calculated at 21%.
The Group also continues to operate both of its equity settled EMI and Growth Share schemes. Both schemes were 
valued using the Black-Scholes model at the grant date which takes into account the terms and conditions upon 
which the options were granted
At each balance sheet date, the Group revises its estimate of the number of options expected to vest upon the 
satisfied completion of the specific vesting conditions and the vesting period, being the expected date of a listing 
or sale of the Group. 
A reconciliation of option movements, and weighted average exercise price ("WAEP") over the year is shown below:
Unapproved February 2016
Exercise price 
       1.00 
Expected volatility %
       31.8 
Option life (years)
n/a
Risk-free interest rate %
        0.5 
Fair value per option 
     199.05 
Number 2017 WAEP 2017
Number 2016 WAEP 2016


Outstanding at 1 January
383,894
5.19
386,904
5.41
Granted
-
-
19,123
1.00
Cancelled
(38,930)
4.25
(22,133)
4.52
Outstanding at 31 December
344,964
5.29
383,894
5.19
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
62
63
Annual Report and Accounts 2017
Continuing the Group's focus on international expansion, a number of companies based in both the UK and 
internationally were acquired during the year. Details of these acquisitions are as follows:
The carrying amount of assets and liabilities in the books of the acquirees at the dates of acquisition were as follows:
The following intangible assets were recognised at acquisition:
10. Business combinations
Country of 
incorporation
Nature of 
activity
Date of 
acquisition
Consideration 
('000)
Percentage 
ownership
Hangar Seven
UK
Producer of Visual Content
12 April 2017
9,191
100%
UK2 Limited
UK
Webhosting
24 May 2017
58,036
100%
RY.com.au
Australia
Online retailing
22 August 2017
6,842
100%
Glossybox
Germany
Online retailing
11 August 2017
17,467
100%
ESPA
UK
Online retailing 6 September 2017
68,191
100%
Illamasqua
UK
Online retailing
5 October 2017
16,926
100%
Hangar Seven 
'000
UK2 
'000
RY 
'000
Glossybox 
'000
ESPA 
'000
Illamasqua 
'000
Total 
'000
Intangible assets
189
1,201
119
-
40,466
194
42,169
Property, plant 
and equipment
364
8,205
215
279
2,922
503
12,488
Other long term assets
-
371
-
-
-
-
371
Inventories
90
-
826
2,803
4,246
1,323
9,288
Other receivables
2,564
13,778
73
2,998
5,490
1,779
26,682
Cash and  
cash equivalents
376
2,918
372
3,479
4,903
174
12,222
Trade and  
other payables
(2,783)
(14,362)
(920)
(9,977)
(30,412)
(3,550)
(62,004)
Non-current payables
-
(3,811)
-
-
-
(658)
(4,469)
Deferred tax
(19)
1,026
-
-
(30)
-
977
Total carrying amount
781
9,326
685
(418)
27,585
(235)
37,724
Hangar Seven 
'000
UK2 
'000
RY 
'000
Glossybox 
'000
ESPA 
'000
Illamasqua 
'000
Total 
'000
Intangible assets - 
brands
1,976
15,628
1,082
1,063
2,029
2,102
23,880
Intangible assets - 
customer lists
229
1,766
182
179
226
238
2,820
Deferred tax
(401)
(3,165)
(230)
(226)
(412)
(425)
(4,859)
Total carrying 
amount
1,804
14,229
1,034
1,016
1,843
1,915
21,841
The provisional fair values of the assets and liabilities and the associated goodwill arising from the acquisitions 
are as follows:
Note
Hangar Seven 
'000
UK2 
'000
RY 
'000
Glossybox 
'000
ESPA 
'000
Illamasqua 
'000
Total 
'000
Intangible assets
11
2,205
18,595
1,264
1,242
2,321
2,441
28,068
Property, plant  
and equipment
364
8,205
5
223
3,449
503
12,749
Inventories
-
-
663
1,122
4,246
1,251
7,282
Trade and other 
receivables
2,342
7,194
55
1,761
4,338
1,779
17,469
Cash and cash 
equivalents
376
2,872
21
3,475
4,903
174
11,821
Trade and other payables
(3,109)
(14,472)
(1,106)
(12,886)
(32,374)
(4,461)
(68,408)
Non-current payables
-
(3,811)
-
-
-
(658)
(4,469)
Deferred tax
20
(420)
(2,139)
(230)
(226)
(442)
(425)
(3,882)
Net assets acquired
 
1,758
16,444
672
(5,289)
(13,559)
604
630
Goodwill
11
7,433
41,592
6,170
22,756
81,750
16,322
176,023
Purchase consideration
 
9,191
58,036
6,842
17,467
68,191
16,926
176,653
The goodwill is attributable to the cost synergies and cross-selling opportunities that are expected to be achieved  
from incorporating the businesses into the Group's IT platform and supporting operations.
Cash flows arising from the acquisitions were as follows:
From the dates of acquisition to 31 December 2017 the newly acquired companies contributed the following to 
Group revenues and loss before tax:
If the acquisitions had occurred on 1 January 2017, the Group's revenue and loss before tax for the year would have 
been 884m and 30m respectively.
Hangar Seven 
'000
UK2 
'000
RY 
'000
Glossybox 
'000
ESPA 
'000
Illamasqua 
'000
Total 
'000
Purchase consideration
9,191
58,036
6,842
17,467
68,191
16,926
176,653
Deferred consideration 
(496)
-
-
-
-
-
(496)
Cash and cash 
equivalents acquired
(376)
(2,872)
(21)
(3,475)
(4,903)
(174)
(11,821)
Total cash outflow
8,319
55,164
6,821
13,992
63,288
16,752
164,336
Hangar Seven 
'000
UK2 
'000
RY 
'000
Glossybox 
'000
ESPA 
'000
Illamasqua 
'000
Total 
'000
Revenue
11,082
24,574
2,797
16,994
6,892
1,457
63,796
Adjusted EBITDA
1,243
6,257
(69)
3,403
1,709
186
12,729
Net profit/(loss) before tax
348
670
(227)
422
801
(1,997)
17
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
64
65
Annual Report and Accounts 2017
Included within platform development costs additions there is a credit for 0.9m (2016: 0.9m) in respect of 
qualifying R&D expenditure.
11. Intangible assets
Note
Goodwill 
'000
Platform 
development 
costs '000
Intellectual 
property 
'000
Brands 
'000
Total 
'000
Cost or valuation
At 1 January 2016
95,679
35,648
10,797
12,154
154,278
Additions
-
18,899
12,806
-
31,705
Disposals
(32)
-
-
-
(32)
Business combinations
51,478
-
5,662
16,967
74,107
At 31 December 2016
147,125
54,547
29,265
29,121
260,058
At 1 January 2017
147,125
54,547
29,265
29,121
260,058
Additions
-
24,528
7,507
-
32,035
Business combinations
10
176,023
1,201
2,987
23,880
204,091
Currency translation 
differences
(1,069)
(20)
74
254
(761)
Recognised on acquisition 
of businesses
(480)
-
-
-
(480)
At 31 December 2017
321,599
80,256
39,833
53,255
494,943
Accumulated amortisation
At 1 January 2016
270
16,275
6,492
1,805
24,842
Amortisation
3
-
8,970
3,811
799
13,580
At 31 December 2016
270
25,245
10,303
2,604
38,422
At 1 January 2017
270
25,245
10,303
2,604
38,422
Amortisation
3
-
13,816
6,903
1,250
21,969
Currency translation differences
-
4
(18)
(125)
(139)
At 31 December 2017
270
39,065
17,188
3,729
60,252
Net book amount
At 1 January 2016
95,409
19,373
4,305
10,349
129,436
At 31 December 2016
146,855
29,302
18,962
26,517
221,636
At 31 December 2017
321,329
41,191
22,645
49,526
434,691
Impairment tests for goodwill and other intangible assets 
The Group's intangible assets include acquired brands and intellectual property, some of which are deemed to  
have indefinite lives as there are no foreseeable limits to the periods over which they are expected to generate  
cash inflows. The assessment of an indefinite life takes into account the market position and the Group's commitment  
to maintaining the brand.
Goodwill, brands and intellectual property that have indefinite useful lives are subject to annual impairment testing, 
or more frequent testing if there are indications of impairment. Intangible assets and goodwill are allocated to the 
appropriate cash-generating units ("CGUs") based on the smallest identifiable group of assets that generates cash 
inflows independently in relation to the specific intangible asset. 
The recoverable amounts of the CGUs are determined from value-in-use calculations that use amounts from 
approved budgets, and projections over an initial period of 3-5 years (2016: 3-5 years) and pre-tax cash flows 
projected forward assuming a perpetual growth rate of 2% (2016: 2%). The discount rate applied to the cash flow 
projections was 8.3% on a pre-tax basis (2016: 7.5%). The average per-annum growth rate applied to the initial period 
ranged from 2% to 25% dependent on the maturity of the CGU (2016: 2% to 25%) and is based on recent actual and 
expected performance of the Group. The net book value of goodwill, brands and intellectual property with indefinite 
lives allocated to CGUs for the purposes of impairment testing is as follows:
A sensitivity analysis has been performed around the base assumptions, being operating profit and sales growth, 
with the conclusion that no reasonable possible changes in key assumptions would cause the recoverable 
amount of the goodwill and brands with indefinite lives to be less than the carrying value. A 10% reduction in the 
discounted cash flows would not result in an impairment being required.
2017
2016
Note
Goodwill 
'000
Brands 
'000
Goodwill 
'000
Brands 
'000
MyProtein
50,464
5,527
50,464
5,527
LookFantastic
19,860
-
19,860
-
Mankind
2,456
-
2,456
-
HQHair
319
-
319
-
Iwantoneofthose
1,965
-
1,965
-
The Hut
2,568
-
2,568
-
ProBikeKit
8,475
-
8,475
-
Exante
1,406
-
1,406
-
Preloved
4,267
-
4,267
-
ANI
1,723
-
1,609
-
Mio
2,069
-
1,946
-
PIAB / MGB
42
-
42
-
Skinstore
6,216
-
5,738
-
Hale CC
16,424
-
16,412
-
Ideal Shape
26,126
-
27,342
-
Skincare RX
1,656
-
1,986
-
Hangar Seven
10
7,433
-
-
-
UK2
10
41,592
-
-
-
RY.com
10
5,866
-
-
-
Glossybox
10
22,330
-
-
-
ESPA
10
81,750
-
-
-
Illamasqua
10
16,322
-
-
-
321,329
5,527
146,855
5,527
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
66
67
Annual Report and Accounts 2017
The Group had committed capital expenditure of 3.6m (2016: 25.8m) as at 31 December 2017.
12. Property, plant and equipment
Note
Motor 
vehicles 
'000
Plant and 
machinery 
'000
Fixtures 
and fittings 
'000
Computer 
equipment 
and software 
'000
Freehold 
buildings 
'000
Total 
'000
Cost
At 1 January 2016
337
25,748
3,710
5,092
3,506
38,393
Additions
1,604
34,937
15,958
6,123
59,884
118,506
Business combinations
25
395
197
299
9,296
10,212
Currency translation differences
2
-
11
140
17
170
Disposals
(86)
-
-
-
-
(86)
At 31 December 2016
1,882
61,080
19,876
11,654
72,703
167,195
At 1 January 2017
1,882
61,080
19,876
11,654
72,703
167,195
Additions
124
10,262
19,894
7,170
1,228
38,678
Business combinations
10
31
163
836
6,746
4,973
12,749
Currency translation differences
(4)
(162)
(106)
(86)
(80)
(438)
Disposals
-
(64)
-
-
-
(64)
At 31 December 2017
2,033
71,279
40,500
25,484
78,824
218,120
Accumulated depreciation
At 1 January 2016
189
3,784
1,050
3,524
380
8,927
Depreciation
3
172
3,130
1,167
1,389
323
6,181
Currency translation differences
1
-
4
108
4
117
Disposals
(79)
-
-
-
-
(79)
At 31 December 2016
283
6,914
2,221
5,021
707
15,146
At 1 January 2017
283
6,914
2,221
5,021
707
15,146
Depreciation
3
334
3,898
4,424
6,723
1,436
16,815
Currency translation differences
(1)
(12)
(10)
(14)
(2)
(39)
Disposals
-
(9)
-
-
-
(9)
At 31 December 2017
616
10,791
6,635
11,730
2,141
31,913
Net book amount
At 1 January 2016
148
21,964
2,660
1,568
3,126
29,466
At 31 December 2016
1,599
54,166
17,655
6,633
71,996
152,049
At 31 December 2017
1,417
60,488
33,865
13,754
76,683
186,207
13. Inventories
14. Financial assets and liabilities
Motor vehicles 
'000
Plant and machinery 
'000
Total 
'000
As at 31 December 2016
Cost
291
3,617
3,908
Accumulated depreciation
(199)
(2,055)
(2,254)
Net book value
92
1,562
1,654
As at 31 December 2017
Cost
291
10,412
10,703
Accumulated depreciation
(246)
(7,340)
(7,586)
Net book value
45
3,072
3,117
2017
2016
'000
'000
Goods held for resale
84,798
58,911
Note
2017
2016
'000
'000
Assets as per balance sheet  loans and receivables
Trade and other receivables excluding prepayments
15
20,786
5,685
Cash and cash equivalents
16
186,729
174,286
207,515
179,971
Liabilities as per balance sheet - other financial liabilities at amortised cost
Bank borrowings
18
404,043
306,881
Finance leases
21
2,654
1,274
Trade and other payables excluding non-financial liabilities 
17
205,432
152,311
612,129
460,466
The cost of inventories recognised as an expense and included in cost of sales amounted to  
417.2m (2016: 290.1m). 
Financial instruments included within current assets and liabilities, excluding borrowings, are generally short-term 
in nature and accordingly their fair values approximate to their book values. The contractual maturity of bank 
borrowings and finance lease liabilities is provided in note 18.
Trade and other payables excluding non-financial liabilities include a liability of 53k (2016: 35k liability) in relation 
to the fair value of foreign currency swaps as at the balance sheet date, that have been measured using observable 
inputs and are not designated as hedges. 
The Group's financial risks are detailed on page 38 of the Strategic report.
Included within property, plant and equipment are assets held under finance lease as follows:
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
68
69
Annual Report and Accounts 2017
15. Trade and other receivables
16. Cash and cash equivalents
17. Trade and other payables
2017
2016
'000
'000
Not due
7,141
2,631
0 to 3 months overdue
3,751
800
3 to 6 months overdue
2,254
96
Over 6 months overdue
1,224
90
14,370
3,617
2017
2016
'000
'000
Cash at bank and on hand
186,729
174,286
2017
2016
'000
'000
Trade creditors
103,645
111,976
Accruals and deferred income
96,278
52,186
Other taxation and social security
1,800
1,752
Other creditors
3,709
542
205,432
166,456
'000
At 1 January 2017
58
Released
(96)
Business combinations
1,080
Charge for the year
89
At 31 December 2017
1,131
Trade and other receivables are principally denominated in sterling.
At 31 December 2017 the ageing of trade receivables was as follows:
The Directors consider the carrying amount of trade and other payables approximates to their fair value when 
measured by discounting cash flows at market rates of interest as at the balance sheet date.
The movement in the provision for impairment of trade receivables was as follows:
Bank borrowings relate predominantly to the amended facility provided by Barclays, HSBC, RBS, Lloyds Bank,  
Bank of Ireland, Santander, Citibank, JP Morgan, Silicon Valley Bank and PDL Europe referred to on pages 36 and 37. 
The contractual terms of the non-amortising facility were amended on 8th May 2018 and cover a 3-year period 
and allows the Group to draw down and repay throughout the duration of the arrangement. Finance leases relate 
to loans funding asset purchases payable over three years and are secured by charges over the assets to which 
they relate. Bank borrowings carried an interest rate of 2.35% (2016: 1.65%) plus LIBOR. All material companies 
registered in England and Wales have granted a debenture to Barclays Bank plc (as security agent). Share charges 
and, where relevant, a charge over bank accounts have been granted to Barclays Bank plc in respect of material 
Guernsey and Jersey registered companies. 
If interest rates during the year had been 100 basis points higher/lower with all other variables held constant, 
post-tax profit for the year would have been 2.4m (2016: 0.9m) lower/higher as a result of the higher/lower 
interest expense which would have been payable.
The contractual maturity of bank borrowings is as follows:
18. Borrowings
2017
2016
'000
'000
Within one year
7,140
7,189
Between two and five years
396,903
299,692
404,043
306,881
2017
2016
Note
'000
'000
Current
Bank borrowings
7,140
7,189
Finance leases
21
2,090
967
9,230
8,156
Non-current
Bank borrowings
396,903
299,692
Finance leases
21
564
307
397,467
299,999
The fair value measured by reference to contractual future cash flows discounted at market rates of interest at 
the balance sheet date approximates to book value. 
2017
2016
'000
'000
Trade receivables
14,370
3,617
Less provision for impairment
(1,131)
(58)
13,239
3,559
Prepayments and accrued income
22,841
12,172
Other tax and social security
107
-
Other receivables
7,547
2,126
43,734
17,857
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
70
71
Annual Report and Accounts 2017
The onerous lease provisions relate to vacant warehouses or properties acquired as part of acquisitions.  
The majority of the provisions have now been utilised or released as no longer required.
The loyalty points provision relates to unredeemed points which entitle customers to discounts on future 
purchases to the extent the Group believe that they will be redeemed.
The movement on the deferred tax liability during the year is as follows:
19. Provisions
20. Deferred tax
Onerous leases 
'000
Customer loyalty 
points '000
Total 
'000
At 1 January 2017
41
724
765
Utilisation
-
(650)
(650)
Created
-
710
710
At 31 December 2017
41
784
825
Note
'000
At 1 January 2017
7,493
Business combinations
10
3,882
Consolidated statement of 
comprehensive income
9
(865)
Recognised in equity
(3,742)
At 31 December 2017
6,768
2017
2016
'000
'000
Current
Onerous leases
41
41
Customer loyalty points
784
724
825
765
2017
2016
 '000
'000
Short term timing differences
(3,735)
(224)
Accelerated capital allowances
(93)
1,729
Business combinations
10,535
5,988
Tax losses
(309)
-
Other balance sheet amounts
370
-
6,768
7,493
The Group has unrecognised deferred tax assets relating to losses of 6.1m (2016: 0.5m), which have not been 
recognised due to the unpredictability of when these assets will be realised.
Operating leases 
At 31 December 2017, the Group had future aggregate minimum lease payments under non-cancellable operating 
leases as follows:
Finance leases 
The Group uses finance leases to acquire motor vehicles, plant and machinery, computer equipment and software.  
The minimum lease payments under finance leases fall due as follows:
The fair value when measured by discounting cash flows at market rates of interest as at the balance sheet date 
approximates to book value.
21. Leases
Land and buildings 2017 
'000
Land and buildings 2016 
'000
Within one year
4,117
3,036
Between two and five years
8,291
5,170
After five years
980
467
13,388
8,673
Minimum 
lease payments
Present value of 
future minimum lease payments
Note
2017 
'000
2016 
'000
2017 
'000
2016 
'000
Expiring within one year
2,152
988
2,090
967
Expiring between two and 
five years
577
309
564
307
2,729
1,297
2,654
1,274
Less interest payable
(75)
(23)
-
-
Finance lease liability
14
2,654
1,274
2,654
1,274
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
72
73
Annual Report and Accounts 2017
The Company has the following authorised, allotted, issued, fully paid and partly-paid ordinary share capital:
22. Share capital and reserves
Deferred shares 
The holders of deferred shares have no right to receive a dividend and no voting rights. The deferred shares are non-
redeemable. On a return of capital, the holders of deferred shares are entitled to receive the amount paid up or credited 
as paid up on such shares once the holders of all the other shares have received the sum of 100,000 per share.
Capital risk management 
The Group's objectives when managing capital, which comprises equity, are to safeguard the Group's ability to 
continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and 
to maintain an optimal capital structure.
Note
Ordinary 
shares 
'000
Share 
premium 
'000
Employee benefit 
scheme reserve 
'000
Merger 
reserve
'000
Capital 
redemption reserve 
'000
Retained 
earnings 
'000
Total 
equity 
'000
Balance at 1 January 2017
3,299 94,260
175
615
518
44,666
143,533
Total comprehensive 
expense for the year
-
-
-
-
-
(11,302)
(11,302)
Issue of ordinary  
share capital
447 183,120
-
-
-
-
183,567
Share buy-backs
-
-
-
-
-
(2,466)
(2,466)
Share-based payments
7
-
-
-
-
-
2,152
2,152
Deferred tax effect of 
share-based payments
-
-
-
-
-
3,742
3,742
Balance at  
31 December 2017
3,746 277,380
175
615
518
36,792
319,226
2017
2016
Number
Number
Class
A ordinary
461,620
520,645
B ordinary
2,856,746
519,013
C ordinary
3,289
-
D ordinary
459,118
483,704
A shares
-
80,654
A1 shares
-
213,419
A2 shares
52,068
605,660
A3 shares
-
254,037
A4 shares
153,904
153,904
A5 shares
-
113,596
A6 shares
-
594,884
Deferred shares
33,515
33,515
1 nominal value ordinary shares*
4,020,260
3,573,031
*Included within this number is 364,455 partly-paid shares (2016: 390,535).
 
On 13 April 2017, 53,612 A5 shares were converted into and re-designated as B ordinary shares.
On 5 September 2017, the following shares were converted into and re-designated as B ordinary shares: (i) 80,654 
A shares; (ii) 213,419 A1 shares; (iii) 553,592 A2 shares; (iv) 254,037 A3 shares; (v) 59,984 A5 shares; and (vi) 594,884 
A6 shares.
A2 shares, A4 shares, A ordinary shares and B ordinary shares 
The holders of A2 shares, A4 shares, A ordinary shares and B ordinary shares are entitled to receive dividends pro 
rata according to the number of shares held by them respectively as if they constituted one class of share. The A2 
shares, A4 shares, A ordinary shares and B ordinary shares are non-redeemable. The holders of such shares have, 
on a show of hands one vote, and, on a poll have one vote for each such share held by them. On a return of capital, 
the holders of such shares have different rights to receive any surplus assets remaining after the payment of 
liabilities ("net proceeds").
C ordinary shares 
The holders of C ordinary shares are not entitled to receive dividends. The shares do not carry any voting rights 
and are non-redeemable. On a return of capital, the holders of such shares are entitled to receive surplus assets 
remaining after the payment of liabilities ("net proceeds").
D ordinary shares  
The holders of D ordinary shares are not entitled to receive dividends. The shares do not carry any voting rights 
and are non-redeemable. On a return of capital, the holders of such shares are not entitled to receive any surplus 
assets remaining after the payment of liabilities ("net proceeds") unless a hurdle is achieved.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, 
return capital to shareholders, issue new shares or sell assets to reduce debt.
On 31 May 2017, 197,662 B ordinary shares were issued at a nominal value of 1 per share for cash consideration  
of 75m net of fees directly related to the share issue.
On 19 July 2017, 26,117 B ordinary shares were issued at a nominal value of 1 per share for cash consideration  
of 10m net of fees directly related to the share issue.
On 5 September 2017, 220,201 B ordinary shares were issued at a nominal value of 1 per share for cash consideration 
of 99m net of fees directly related to the share issue.
The Employee Benefit Trust (EBT) facilitates an internal market for participants in employee share schemes to sell 
their shares in the Company. As at 31 December 2017, the EBT had purchased a total of 9,104 shares for aggregate 
consideration of 1.8m which is deducted from retained earnings.
During the year the Group (including its EBT) bought back shares for an aggregate cash consideration of 1.5m 
and related costs of 1.0m.
The non-cash IFRS 2 share-based payments charge for the year relating to the share options in issue during the 
year was 1.8m (2016: 2.0m). Share-based payment costs of 0.3m were included in employee costs capitalised 
within platform development costs in respect of options issued to software engineers (note 11) (2016: nil).
Share-based payments also contain a cash charge for the year amounting to 2.3m (2016: 1.2m) as a result of 
payments that were made to employees in return for the cancellation of their share options, 38,931 share options 
were cancelled in total.
The Group issued no Employee Share Scheme (ESS) shares during 2017. As a result, there is nil charge related  
to share issue (2016: 0.7m).
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
74
75
Annual Report and Accounts 2017
24. Cash flow generated from operations
2017
2016
Note
'000
'000
(Loss)/profit before taxation
(10,879)
14,194
Adjustments for :
Depreciation
12
16,815
6,181
Amortisation
11
21,969
13,580
Share-based payments
7
4,115
3,853
Exceptional items
4
30,259
9,992
Net finance costs
8
6,837
2,357
Operating cashflow before exceptional items and before  
movements in working capital and provisions
69,116
50,157
Increase in inventories
(18,606)
(15,727)
Increase in trade and other receivables
(6,801)
(4,602)
Increase in trade and other payables
6,974
57,674
Increase in provisions
60
350
Foreign exchange loss
(188)
(245)
Cash generated from operations before exceptional cash flows
50,555
87,607
M J Moulding
E J Koopman
A J Duckworth (resigned on 17 April 2018)
J A Gallemore
P J Gedman
J P Pochin (appointed on 18 April 2018)
A Monro
R J Pennycook
N J M Gheysens (appointed on 5 September 2017)
I McDonald
D P Murphy
B Liautaud (appointed on 5 September 2017)
W M Evans
25. Ultimate parent company
The ultimate parent company and controlling party of the Group is The Hut Group Limited.
The Group has provided interest free loans of 0.9m (2016: 0.7m) to the Directors in order for them to subscribe for 
shares as part of the employee benefit scheme. The loans are repayable in the event of a sale or listing of the Group.
The share-based payments expense associated with the Directors was 0.7m (2016: 1.0m).
At 31 March 2018, Matthew Moulding controlled 26.7% of THG shares. This comprised shares held outright and 
under incentive arrangements, a proportion of which were issued post year end. The controlled management 
equity represents less than 7% of THG fully diluted share capital.
The Directors had the following interests in shares under incentive arrangements (see note 7 for details of the scheme).
The Directors' interests in the share capital of the Company at the balance sheet date are detailed below:
26. Related party transactions
The Directors of the Company who were in office during the year from 1 January 2017 and up to the date of signing  
the financial statements are:
27. Post balance sheet events 
 
For further details on events after the balance sheet date see the Directors' report on page 43.
2017
2016
Date of award
Subscription/exercise price 
Number
Number
M J Moulding
Oct-10
7.50
29,090
29,090
M J Moulding
Nov-13
5.00
87,920
87,920
J A Gallemore
Oct-10
7.50
14,545
14,545
J A Gallemore
Nov-13
5.00
15,154
17,584
A Monro
Nov-13
5.00
35,168
35,168
R Pennycook
Nov-13
5.00
35,168
35,168
P J Gedman
Jan-10
8.25
1,339
1,339
P J Gedman
Oct-10
7.50
1,950
1,950
P J Gedman
Nov-13
5.00
9,858
9,858
A J Duckworth
Nov-13
5.00
7,024
7,024
237,216
239,646
During the year, the Group operated an auto-enrolment pension scheme. The scheme is managed by independent 
fund managers and the Group contributes in accordance with the statutory requirements. In addition to the 
auto enrolment scheme, a subsidiary company operates a defined contribution pension scheme which is also 
managed by independent fund managers and its assets/liabilities are held separately from that of the Group.  
The pension charge represents the amount paid by the Group and amounted to 482,954 (2016: 312,500).  
There were no outstanding contributions due to the fund at the year end.
23. Pension commitments
Ordinary shares
2017 Number
Ordinary shares
2016 Number
M J Moulding
553,071
678,768
J A Gallemore
24,678
24,678
A Monro
11,577
26,992
I McDonald
17,300
22,467
606,626
752,905
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
76
77
Annual Report and Accounts 2017
Subsidiary
Country of incorporation
Nature of business
The Hut.com Limited**
England and Wales
Online retailing
The Hut Platform Limited**
England and Wales
Provision of website development services
The Hut Holdings Limited**
England and Wales
Dormant
The Hut.com (Trading) Limited**
Jersey
Online retailing
Cend Limited**
England and Wales
Online retailing
Guco Internet Supplies Limited**
Guernsey
Holding company
Iwantoneofthose Limited**
Guernsey
Dormant
The Hut Entertainment SL**
Spain
Dormant
Zone Limited**
Guernsey
Holding company
Allenby Square Limited**
England and Wales
Property holding company
Ensco 818 Limited**
England and Wales
Holding company
Mankind Holdings Limited**
Guernsey
Holding company
Mankind Direct Limited**
England and Wales
Procurement company
Moo Limited**
England and Wales
Online advertising
Active Nutrition International OY**
Finland
Online retailing
Lookfantastic Group Limited**
England and Wales
Holding company
Lookfantastic.com Limited**
England and Wales
Online retailing
Lookfantastic Franchising Limited**
England and Wales
Franchising and consultancy services
Lookfantastic London Limited**
England and Wales
Dormant
Lookfantastic Salons Limited**
England and Wales
Hairdressing salon
The Hut IHC Limited*
England and Wales
Holding company
The Hut Management Company Limited***
England and Wales
Activities of Head Office
Exante Diet Limited**
England and Wales
Dormant
Bike Kit Limited**
England and Wales
Dormant
CNP Professional Holdings Limited**
Guernsey
Procurement company
MyVitamins Limited**
England and Wales
Dormant
HQ Hair Limited**
Guernsey
Holding company
Cend International Limited**
England and Wales
Online retailing
THGPP LLC**
USA
Dormant
THG International LLC**
USA
Warehouse and distribution 
Mama Mio Limited**
England and Wales
Online retailing
Mama Mio Distribution Limited**
England and Wales
Dormant
Mama Mio US Inc.**
USA
Online retailing
LMP Omega I Limited**
Guernsey
Property holding company
Hale Country Club Limited**
England and Wales
Retail and leisure company
Aghoco 1442 Limited**
England and Wales
Property holding company
Gadbrook Limited**
England and Wales
Dormant
THG China Limited**
England and Wales
Dormant
28. Subsidiary undertakings  
 
At the balance sheet date the following subsidiaries were controlled by the Group, a company incorporated in 
England and Wales:
* - 90% owned by The Hut Group Limited and 10% by The Hut Management Company Limited
** - 100% owned by The Hut IHC Limited either directly or indirectly.
***  - 0.01% owned by The Hut Group Limited, however The Hut Group Limited 
has a separate class of share in The Hut Management Company Limited 
which gives it the right to control the appointment of Board Directors.
 
Subsidiary
Country of incorporation
Nature of business
The Hut Group International (Shanghai) Co Limited** China
License holding company
PC Beauty Inc.**
USA
Holding company
Ideal Shape LLC**
USA
Marketing company
Performance Supplements LLC**
USA
Marketing company
Inteladerm LLC**
USA
Online retailing
Salu Australia PTY Limited**
Australia
Holding company
Skincarestore Australia PTY Limited**
Australia
Online retailing
Salu Beauty Inc.**
USA
Online retailing
UK2 Limited**
England and Wales
Webhosting
Another.com Limited**
England and Wales
Webhosting
Virtual Internet Holdings Limited**
England and Wales
Holding company
Hosting Services Inc.**
USA
Webhosting
UK2 Ukraine LLC**
Ukraine
Webhosting
Virtual Internet (UK) Limited**
England and Wales
Webhosting
The Hut.com (Poland)**
Poland
Warehouse and distribution
RY.com.au Pty Limited**
Australia
Online retailing
Hangar Seven Limited**
England and Wales
Visual content producer
Media Ark Limited**
England and Wales
Visual content producer
H7P Portugal Unipessoal LDA**
Portugal
Visual content producer
Illamasqua (Holdings) Limited**
England and Wales
Holding company
Illamasqua Limited**
England and Wales
Online retailing
Beauty Box Beteiligungen GmbH**
Germany
Holding company
Beauty Trend Holding GmbH**
Germany
Online retailing
Beauty Trend GmbH**
Germany
Online retailing
Jade 1150. GmbH**
Germany
Holding company
Beauty Trend S.A.S France**
France
Online retailing
GlossyBox Sweden Holding UG**
Sweden
Holding company
GlossyBox Sweden AB**
Sweden
Online retailing
GlossyBox United Kingdom Holding GmbH**
England and Wales
Holding company
Beauty Trend UK Limited**
England and Wales
Online retailing
VRB GmbH & Co. B-149 KG**
Germany
Holding company
Beauty Trend USA Inc.**
USA
Online retailing
EI Spa Holdings (UK) Limited**
England and Wales
Holding company
ESPA International (UK) Limited**
England and Wales
Online retailing
Primavera Aromatherapy Limited**
England and Wales
Manufacturing
ESPA International (US) Inc.**
USA
Online retailing
ESPA International FZE**
UAE
Online retailing
Majority of the Group's subsidiaries are registered at the following address: 
5th Floor, Voyager House, Chicago Avenue, Manchester Airport, Manchester, 
England M90 3DQ
Notes to the financial statements (continued)
Notes to the financial statements (continued)
 
78
79
Annual Report and Accounts 2017
Company only  
financial statements
 
80
81
Annual Report and Accounts 2017
2017
2016
Note
'000
'000
Fixed assets
Investments
4
89,770
88,606
89,770
88,606
Current assets
Debtors
5
518,648
204,688
Cash
80,058
126,156
598,706
330,844
Creditors: amounts falling due within one year
6
(9,224)
(8,024)
Net current assets
589,482
322,820
Total assets less current liabilities
679,252
411,426
Creditors: amounts falling due after one year
7
(396,903)
(299,692)
Net assets
282,349
111,734
Capital and reserves
Called up share capital
8
3,746
3,299
Share premium
8
277,380
94,260
Merger reserve
8
615
615
Capital redemption reserve
8
518
518
Retained earnings
8
90
13,042
Total shareholders' funds
282,349
111,734
The financial statements on pages 80 to 87 were approved by the Board of Directors on 29 May 2018 and were 
signed on its behalf by:
J A Gallemore 
Director 
Registered number: 06539496
Company balance sheet as  
at 31 December 2017
Note
Ordinary 
shares 
'000
Share 
premium 
'000
Merger 
reserve
'000
Capital 
Redemption Reserve 
'000
Retained 
earnings 
'000
Total 
'000
Balance at 1 January 2017
3,299
94,260
615
518
13,042
111,734
Loss for the year
-
-
-
-
(12,244)
(12,244)
Issue of ordinary share capital
447
183,120
-
-
-
183,567
Share buy-back
-
-
-
-
(2,466)
(2,466)
Capital contribution
-
-
-
-
1,164
1,164
Share-based payments
594
594
Balance at 31 December 2017
3,746 277,380
615
518
90 282,349
Company statement of changes in equity  
for the year ended 31 December 2017
 
82
83
Annual Report and Accounts 2017
Notes to the company financial statements 
1. Accounting policies
The principle accounting policies have been applied 
in accordance with 'Financial Reporting Standard 
101 Reduced Disclosure Framework' (FRS 101), and 
are detailed below. The policies have been applied 
consistently throughout both the current and 
preceding year.
a. Basis of preparation 
As permitted by Section 408 of the Companies Act 2006, 
an entity profit and loss account is not included as part 
of the published consolidated financial statements 
of The Hut Group Limited. The loss for the financial 
year in the financial statements of the Company is 
12.2m (2016: 4.7m profit). 
 
In accordance with FRS101, the Company has taken 
advantage of the disclosure exemptions relating to the 
preparation of a cash flow statement and disclosure of 
related party transactions. The consolidated financial 
statements of The Hut Group Limited have been 
prepared in accordance with International Financial  
Reporting Standards as adopted by the EU.
b. Taxation and deferred taxation 
Current tax including UK Corporation Tax is provided 
at amounts expected to be paid or recovered using 
the tax rates and laws that have been enacted or 
substantively enacted by the balance sheet date. 
 
Deferred taxation is provided in full on timing 
differences that result in an obligation at the balance 
sheet date to pay more tax, or a right to pay less tax, 
at a future date, at rates expected to apply when 
they crystallise based on current tax rates and law. 
Temporary differences arise from the inclusion 
of items of income and expenditure in taxation 
computations in periods different from those in  
which they are included in the financial statements. 
Deferred tax assets are recognised to the extent  
that it is regarded as more likely than not that  
they will be recovered. Deferred tax assets and 
liabilities are not discounted.
c. Borrowing costs 
Borrowing costs are not capitalised; they are 
recognised in profit or loss in the period in  
which they are incurred. 
d. Financial instruments 
Financial assets and financial liabilities are recognised 
on the Company's balance sheet when the Company 
becomes a party to the contractual provisions of  
the instrument. 
 
e. Borrowings 
Interest-bearing bank loans and overdrafts are 
recorded at the proceeds received, net of direct issue 
costs. Finance charges, including premiums payable 
on settlement or redemption and direct issue costs, 
are accounted for on an accruals basis through the 
profit and loss account using the effective interest 
method and are added to the carrying amount of the 
instrument to the extent they are not settled 
in the period in which they arise. The Company  
has not entered into any transactions involving 
derivative instruments.
f. Financial liabilities and equity 
Financial liabilities and equity instruments are 
classified according to the substance of the 
contractual arrangements entered into. An equity 
instrument is any contract that evidences a residual 
interest in the assets of the Company after deducting  
all of its liabilities.
g. Investments in subsidiaries 
Investments in subsidiaries are held at cost, less 
any provision for impairment. Where equity settled 
share-based payments are granted to the employees 
of subsidiary companies, the fair value of the award is 
treated as a capital contribution by the Company and 
the investments in subsidiaries are adjusted to reflect 
this capital contribution.
h. Share-based payments 
The Company operates a share-based compensation 
plan, under which the Company and the Group 
subsidiary entities receive services from employees 
as consideration for equity instruments (options) of 
the Company. The fair value of the employee services 
received in exchange for the grant of the options is 
recognised as an expense. The total amount to be 
expensed is determined by reference to the fair  
value of the options granted.  
 
Non-market vesting conditions are included in 
assumptions about the number of options that are 
expected to vest. The total expense is recognised over 
the vesting period, which is the period over which all of 
the specified vesting conditions are to be satisfied. At 
the end of each reporting period, the entity revises its 
estimates of the number of options that are expected 
to vest based on the non-market vesting conditions. 
It recognises the impact of the revision to original 
estimates, if any, in the income statement, with a 
corresponding adjustment to equity. 
 
When the options are exercised, the Company 
issues new shares. The proceeds received net 
of any directly attributable transaction costs are 
credited to share capital (nominal value) and share 
premium when the options are exercised. 
 
The grant by the Company of options over its 
equity instruments to the employees of subsidiary 
undertakings in the Group is treated as a capital 
contribution. The fair value of employee services 
received, measured by reference to the grant 
date fair value, is recognised over the vesting 
period as an increase to investment in subsidiary 
undertakings, with a corresponding credit to equity. 
 
The Group has an employee benefit trust (EBT) 
which facilitates an internal market for participants 
in employee share schemes to sell their shares in 
the Company. Shares held are recognised at cost as 
a deduction from shareholding equity. Subsequent 
consideration received for the sale of such shares is 
also recognised in equity.
i. Significant estimates and judgements 
Share-based payments  
Critical estimates and assumptions are made  
in particular with regard to the calculation of  
the fair value of employee share options using 
appropriate valuation models. In addition,  
estimation is required in assessing the number  
of options expected to vest and the vesting  
periods of the awards.
Notes to the company financial statements (continued)
 
84
85
Annual Report and Accounts 2017
3. Auditor remuneration 
Amounts paid to the Company's auditors are disclosed in note 5 of the Group consolidated financial statements.
4. Fixed asset investments 
Fixed asset investments comprise investments in subsidiary undertakings.
2. Employee costs and numbers
6. Creditors: amounts falling due within one year
7. Creditors: amounts falling due after one year
2017
2016
'000
'000
Amounts owed by group undertakings
514,282
203,335
Corporation tax asset
154
154
Other taxation and social security
107
20
Prepayments and accrued income
4,105
1,179
518,648
204,688
Note
2017
2016
'000
'000
At 1 January
88,606
87,361
Capital contribution
8
1,164
1,245
At 31 December
89,770
88,606
The average number of employees during the year was 2 (2016: 2). 
Refer to note 18 of the Group financial statements for details of the bank borrowings. Bank borrowings carried an 
interest rate of 2.35% (2016: 1.65%) plus LIBOR. If interest rates during the year had been 100 basis points higher/
lower with all other variables held constant, post-tax loss for the year would have been 2.4m (2016: 0.9m) 
higher/lower as a result of the higher/lower interest expense which would have been payable.
Amounts owed by group undertakings are unsecured, non-interest bearing and repayable on demand.
Amounts owed to group undertakings are unsecured, non-interest bearing and repayable on demand. 
2017
2016
'000
'000
Trade creditors
239
180
Bank borrowings
7,140
7,189
Amounts owed to group undertakings
-
287
Accruals and deferred income
1,845
368
9,224
8,024
2017
2016
'000
'000
Bank borrowings
396,903
299,692
5. Debtors
2017
2016
'000
'000
Wages and salaries
494
601
Social security costs
76
87
Share-based payments
467
570
1,037
1,258
Notes to the company financial statements (continued)
Notes to the company financial statements (continued)
 
86
87
Annual Report and Accounts 2017
Note
Ordinary 
shares 
'000
Share 
premium 
'000
Merger 
reserve
'000
Capital 
Redemption Reserve 
'000
Retained 
earnings 
'000
Total 
'000
Balance at 1 January 2017
3,299
94,260
615
518
13,042
111,734
Loss for the year
-
-
-
-
(12,244)
(12,244)
Issue of ordinary share capital
447
183,120
-
-
-
183,567
Share buy-backs
- 
-
-
-
(2,466)
(2,466)
Capital contribution
-
-
-
-
1,164
1,164
Share-based payments
-
-
-
-
594
594
Balance at 31 December 2017
3,746
277,380
615
518
90
282,349
9. Post balance sheet events 
Disclosure on the post balance sheet events is in Directors' report on page 43.
0.6m (2016: 0.8m) has been charged to the Company profit and loss account in respect of the share-based 
payments. 1.2m of share-based payments is reflected in the subsidiary financial statements. 
Disclosures on the share-based payment schemes can be found in note 7 of the Group financial statements.
Further information in respect of the movement in the share premium account and share buy-backs can be 
found in note 22 of the Group financial statements.
*Included within this number is 364,455 partly-paid shares (2016: 390,535).
On 13 April 2017, 53,612 A5 shares were converted into and re-designated as B ordinary shares.
On 5 September 2017, the following shares were converted into and re-designated as B ordinary shares:  
(i) 80,654 A shares; (ii) 213,419 A1 shares; (iii) 553,592 A2 shares; (iv) 254,037 A3 shares; (v) 59,984 A5 shares;  
and (vi) 594,884 A6 shares.
A2 shares, A4 shares, A ordinary shares and B ordinary shares 
The holders of A2 shares, A4 shares, A ordinary shares and B ordinary shares are entitled to receive dividends pro 
rata according to the number of shares held by them respectively as if they constituted one class of share. The A2 
shares, A4 shares, A ordinary shares and B ordinary shares are non-redeemable. The holders of such shares have,  
on a show of hands one vote, and, on a poll have one vote for each such share held by them. On a return of capital,  
the holders of such shares have different rights to receive any surplus assets remaining after the payment of 
liabilities ("net proceeds").
C ordinary shares 
The holders of C ordinary shares are not entitled to receive dividends. The shares do not carry any voting rights 
and are non-redeemable. On a return of capital, the holders of such shares are entitled to receive surplus assets 
remaining after the payment of liabilities ("net proceeds").
8. Share capital and reserves
2017
2016
Number
Number
Class
A ordinary
461,620
520,645
B ordinary
2,856,746
519,013
C ordinary
3,289
-
D ordinary
459,118
483,704
A shares
-
80,654
A1 shares
-
213,419
A2 shares
52,068
605,660
A3 shares
-
254,037
A4 shares
153,904
153,904
A5 shares
-
113,596
A6 shares
-
594,884
Deferred shares
33,515
33,515
1 nominal value ordinary shares*
4,020,260
3,573,031
The Company has the following authorised, allotted, issued, fully paid and partly-paid ordinary share capital:
D ordinary shares 
The holders of D ordinary shares are not entitled to receive dividends. The shares do not carry any voting 
rights and are non-redeemable. On a return of capital, the holders of such shares are not entitled to receive 
any surplus assets remaining after the payment of liabilities ("net proceeds") unless a hurdle is achieved.
Deferred shares 
The holders of deferred shares have no right to receive a dividend and no voting rights. The deferred shares 
are non-redeemable. On a return of capital, the holders of deferred shares are entitled to receive the amount 
paid up or credited as paid up on such shares once the holders of all the other shares have received the sum  
of 100,000 per share.
Notes to the company financial statements (continued)
Notes to the company financial statements (continued)