Shareholders in online retail and software giant THG have voiced their opposition to the reappointment of a long-standing board member.
Over 23% voted against the re-election of Iain McDonald to the group's board as a non-executive director at its annual general meeting earlier today (June 21).
Mr McDonald has been a non-executive director and investor in the Manchester-headquartered group since 2010.
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He also holds the same position at Boohoo and is the founder of Belerion Capital which has previously invested in the likes of AO and Asos. Mr McDonald is also the non-executive chairman of CentralNic.
All other resolutions at THG's AGM were passed with minimal opposition. Since the start of the day's trading on the London Stock Exchange, shares in the company have risen in price by almost 10%.
In a statement issued to the London Stock Exchange, THG said: "The company notes that a significant number of votes were cast against resolution 9 relating to the re-election of Iain McDonald as a director of the company.
"The board takes seriously its responsibilities to represent the interests of shareholders and to uphold the highest standards of corporate governance and is open to constructive dialogue with shareholders and shareholder bodies.
"Accordingly, it will undertake a detailed review of any feedback received on this resolution to ensure it fully understands the reasons behind the voting result and to allow it to understand shareholders' concerns and will continue to engage with shareholders over the coming months as appropriate.
"Further, in line with the provisions of the UK Corporate Governance Code (July 2018), the company will provide an update on the views received from shareholders and actions taken in response in no later than six months' time."
The AGM came after THG confirmed earlier today that founder Matthew Moulding had given up his 'golden share' rights which granted him the power to veto hostile takeover approaches.
It had originally been announced in April that Mr Moulding, who is the company's chief executive, would give up the 'special share' in September. The move is part of THG's plans to join the ranks of the FTSE 250.
THG also confirmed this morning that it has had a strong second quarter, with a "continued successful focus" on profitability and cash generation.
It added that a "significant increase" in half-year profits is expected, with adjusted EBITDA in the range of £44m to £47m, up from £32.3m. THG said that its full-year guidance remains unchanged.
In a LinkedIn post, Mr Moulding said: "Today was THG’s AGM. These aren’t anything like the dramatic event that some would have us believe.
"I can honestly say AGMs are typically as dull as watching paint dry. And as someone who, as a student, painted many a pub wall and ceiling, I talk from experience.
"AGMs are usually held in a soulless hotel conference room, attended by a tiny handful of people, namely press. A script is read out, lasting for 10 minutes, and the meeting ends. The nicest bit from today's AGM was the supportive comments of two small shareholders.
"Any real interest from the day comes if a company issues a trading statement on the morning of the AGM, but there’s no requirement to do one.
"We chose to make today more meaningful and issued a THG update this morning.
"In short, we’ve made a strong start to 2023, with profitability and cash performance running well ahead of 2022. The key driver is a particularly strong performance from Myprotein now commodity inflation has reversed.
"Commodity prices more than doubled during 2022, and are the biggest costs to the Myprotein brand. THG took a bold decision to support customers by absorbing much of these spiralling costs.
"This meant sacrificing short-term profits, which in the Myprotein division alone cost THG as much as £6m a month during 2022.
"As a private company, these are simple decisions. But when listed, the pressure to be short term focused is intense – market hysteria surrounds long-term decision making, no matter the circumstances. I’m proud of THG’s actions, and the support the board gave to the plan. We took short pain for long term gain.
"This explains why THG not only held onto huge sales growth during Covid (growing sales from c£1bn to c£2bn over 2 years) but grew Sales further in every division in 2022.
"Very few competitors, if any, achieved sales growth in 2022, and even less managed to hold onto to growth delivered during Covid.
"From Jan 2022, we also targeted annual cost savings of c£50m to navigate ballooning cost inflation. By June 2022 the target rose to £100m pa, which was all delivered by year-end.
"These savings kept THG’s cost base broadly flat in 2022 despite rabid inflation, also ensuring THG’s costs will be materially lower in 2023 than 2022.
"Sure, none of this was the plan at end of 2021, but our job is to pivot each business area in response to the trading environment as we see it. Anyone can just observe and blame the world.
"2022 was a brutal year for almost everyone (except those in oil and gas). 2023 hasn’t been much easier, but seeing THG’s progress in the face of the macro challenges brings me incredible pride.
"I just want to say a sincere thank you to everyone at THG who’s given so much effort and energy in delivering this progress, along with the personal sacrifices made."
