Huel plays down London listing as IPO market stutters

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The boss of Huel said he was open to a sale of the meal replacement maker, admitting that the flagging initial public offering market has made a UK listing less attractive. 

Chief executive James McMaster said that Huel, which sells plant-based powders, drinks and snacks to time-pressed consumers, was in no rush to pursue a listing, having explored it recently.  

“We did consider the IPO market before the markets died basically at the beginning of 2022; who knows where that ends up,” he said. “Going back two years ago, everyone was saying how great the markets were and maybe in time they will come back . . . If not, we are open-minded to some form of partnership with a larger company.” 

McMaster, who joined in 2017, made the remarks as the Hertfordshire-based company reported a profit thanks to a jump in sales, and just days after privately owned conglomerate Mars said it was buying UK brand Hotel Chocolat.

The global IPO market is in a lacklustre period due to a mix of pressure from lower valuations, higher interest rates and global instability.

McMaster added: “We’re very happy as we are now, being self-sufficient from funding, but we’ve also got investors and they invested quite a long time ago so at some stage there needs to be a realisation of that. So let’s see what happens, and if we get different knocks on the door, and how hard they are.”

Huel, which was valued at £440mn a year ago, posted a 28 per cent increase in sales to £184mn for the year to July, up from £144mn the previous year. It recorded pre-tax profits of £4.7mn, compared with a prior loss of £10.6mn. 

Last month it secured backing from Morgan Stanley’s investment management arm, which bought shares from other existing investors, McMaster said. About a year ago it raised £20mn from backers including Highland Europe and actor Idris Elba.

Huel was founded in 2015 by Julian Hearn, who still owns at least half of the business, according to Companies House, and is seen as one of the UK’s most promising start-ups. It has a strong following on social media and its products are popular with fitness-focused consumers.

Although it sells directly to consumers online, Huel is also stocked by more than 11,000 stores worldwide. The company is building a factory in Buckinghamshire to help it cater to increased demand.

“We’re in a position where we don’t need to be raising more money . . . It’s a business that’s growing quickly and making profit and healthy margins,” McMaster said. “We’re plant based and good for the planet, so we’re pretty strong in terms of attractiveness.”

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