Joules Group plc – Pre-close Trading Update

Joules Group plc – Pre-close Trading Update

Strength of the Joules brand and flexible ‘total retail’ model deliver first half profits ahead of initial expectations

Joules, the premium British lifestyle brand, today provides a trading update covering the 26-week period to 25 November 2018, the first half of the Group’s 2019 financial year.

 Group revenue for the Period increased by 17.6% to £113.1 million (H1 FY18: £96.2m).  This result, in what has been a well-documented challenging period for the sector, reflects the strength of the Joules brand, the appeal of our products, the flexibility of the Group’s ‘total retail’ model in the UK and the rapid growth of our international business, which now represents approximately 16% of Group revenue (H1 FY18: 11.3%).

Retail and Wholesale revenue figures in the Period were impacted by the transition of some UK wholesale accounts to a retail concession model, a model that provides greater future trading flexibility.  Approximate revenue growth excluding the impact of this transition is disclosed for comparative purposes: 

26-week period to 25 November 2018

Revenue

£million

Reported growth %

Approx. comparative growth¹ %

Retail

79.9

21.2%

10%

Wholesale

32.5

8.0%

26%

Other

0.8

232.3%

N/A

Group

113.1

17.6%

14%

Retail revenue growth continues to be driven by our focus on delivering a seamless and enjoyable experience to customers, irrespective of how, when and where they want to shop the Joules brand.  E-commerce performed particularly well in the first half and now represents nearly fifty percent of all retail sales.  The Group’s integrated cross-channel (‘total retail’) model is well suited to meet changing consumer shopping behaviours.

Wholesale revenue benefited from continued strong growth in our target international markets, the US and Germany, and good UK performance, in line with management expectations.  International sales now represent approximately half of total wholesale sales, reflecting the continued expansion of the Joules brand overseas.  

Given this sales performance, the Board anticipates announcing a level of Underlying Profit Before Tax (PBT) that is slightly ahead of initial expectations for the Period.

Looking ahead, the Board anticipates that trading conditions in the UK will remain challenging over the near term, with continued macroeconomic uncertainty, rapidly changing consumer shopping behaviours and a highly competitive environment.  Contingency plans have been put in place to mitigate the expected disruption that could arise in the event of a ‘hard Brexit’.  These plans include establishing an EU based 3rd party distribution facility; scheduling earlier inbound product deliveries for our Spring/Summer 2019 ranges; preparation for expected increased administrative activities; and hedging US Dollar requirements more than 12 months forward.

The strength of the Joules brand as well as its loyal customer base; flexible model; and rapidly growing international business position the Group well for continued growth.  These attributes, combined with the robust first half performance and a strong Spring/Summer 2019 wholesale order-book, give the Board confidence in the Group achieving full year 2019 PBT in line with its expectations.

Colin Porter, Chief Executive Officer, commented:

“I am delighted to update on what has been another period of strong performance for Joules despite challenging trading conditions.  This performance, which is ahead of our initial expectations for the Period, is testament to the strength of the Joules brand, the engagement of our loyal customers with our product collections, and our fantastic teams.

In the UK, our ‘total retail’ cross-channel model, underpinned by investment in infrastructure, has proven to be well suited to today’s rapidly changing consumer shopping behaviours.  In addition, our international wholesale business continues to make excellent progress by both increasing sales to existing accounts and developing new accounts.

We have an outstanding brand, good momentum and a growing customer base and we look forward to the second half of the financial year with confidence.”

The Group will announce its Interim Results for the 26-week period to 25 November 2018 on Wednesday 23 January 2019.

¹ Comparative growth percentages show the approximate growth for Retail and Wholesale on the basis of the prior period being restated to reflect the impact of the retail concession model. Note, the prior period restatement is unaudited and approximate.

No Comments

Post a Comment