Joules, the British lifestyle group, provides an update on trading for the financial year ended 30 May 2021 (the ‘Period’).
The Group is pleased to report that revenue for the Period increased by 4% to approximately £199m (FY20: 190.8m) despite the significant challenges impacting the retail sector during the financial year. This performance primarily reflects the strength of the Group’s digital proposition and increasing active customer numbers, as well as the positive contribution from the acquisition of Garden Trading Company Ltd (“Garden Trading”) since February 2021. Profit before tax and exceptional items for the Period is anticipated to be in the range of £5.5m – £6.5m, slightly ahead of current market expectations1.
Retail revenue, which includes e-commerce sales as well as the Group’s stores, increased 9% year on year. This was primarily as a result of strong sales growth through the Group’s own digital channels with demand on Joules’ own websites, which includes the Friends of Joules online marketplace, growing approximately 48% year on year.
This very strong digital performance reflected increased customer traffic to the Joules website as well as improved customer conversion trends.
The Group’s stores have performed ahead of management’s expectations since their re-opening following the third national lockdown, with sales for the eight weeks since reopening ahead of the comparable period two years ago. The Group has also opened three new stores at Center Parcs’ Sherwood, Whinfell and Elveden locations, taking the total number of Joules’ Center Parcs stores to five. This pleasing store performance reflects a combination of pent-up consumer demand as well as the attractive, predominantly local high street and lifestyle locations of the Group’s store estate. Reflecting the enforced closure of Joules stores for approximately half of the Period, store sales reduced by approximately 41% year on year.
Garden Trading has traded well and ahead of the Board’s expectations since the acquisition in February 2021, with revenues approximately 78% higher than the comparable prior year period. This encouraging performance highlights the strength of Garden Trading’s home, garden and outdoor product offering and its fast-growing customer base.
The Wholesale channel was adversely impacted by the enforced closures of stores and reduced footfall during the year both across the UK and the Group’s US and German partners. As a result, Wholesale sales reduced by approximately 17% year on year.
The Group’s financial position is robust, with net cash of £4.7 million at 30 May 2021 and approximately £39 million of liquidity headroom against current facilities. This includes a £25m revolving credit facility which the Company last month announced it had extended to September 2024 and converted to an ESG-linked arrangement. The agreement further strengthens the Group’s commitment to positively impact its customers, colleagues and the environment by linking interest rate margin to Joules’ performance against three Sustainability Performance Targets, each of which align to its Responsibly Joules ESG framework.
Following the announcement published by the Group on 7 April 2021 regarding the appointment of Caroline York as Joules’ new CFO, the Board confirms that Caroline will join the business on 26 July 2021.
Nick Jones, chief executive officer of Joules, commented: “The impact of the coronavirus pandemic on the lives of consumers, the level of disruption and pace of change in the retail sector over the past 12 months has been truly unprecedented. I am delighted that, against this backdrop, Joules has been able to deliver a very solid financial performance and strong strategic progress. This outcome primarily reflects, firstly, the strength and relevance of the Joules brand to an increasing number of customers and, secondly, the increasing importance of our digital proposition both to customers and within our business model, with approximately 77% of our retail sales now generated online.
As we move into the new financial year, Joules is now a stronger and more diversified business than ever before. The continued success and growth of our Friends of Joules digital marketplace and our strengthened position in the home, garden & outdoor sector following the acquisition of Garden Trading means that we now offer significantly more products across more categories and provide our customers with more choice and reasons to shop with us. As a result of the strength of the Joules brand and the increasing diversification of the Group’s digital-led business model, we believe that the Group is very well positioned to continue to deliver its ambitious growth plans.”
1 FY21 analyst expectations: £5.2 – £5.3m