Joules Group plc Pre-close Trading Update (4497J)

TIDMJOUL

RNS Number : 4497J

Joules Group plc

05 December 2018

Joules Group plc

('Joules' or the 'Group')

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 (the 'Period' or 'first half').

Group revenue for the Period increased by 17.6% to GBP113.1 million (H1 FY18: GBP96.2m). 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      GBPmillion   Reported growth   Approx. comparative 
                                         %           growth(1) % 
             -----------  ----------------  -------------------- 
 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 3(rd) 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.

Enquiries:

 
 Joules Group plc                   Tel: [phone] 
                                     255 
 Colin Porter, CEO 
  Marc Dench, CFO 
 Hudson Sandler (Financial PR)      Tel: [phone] 
                                     4133 
 Alex Brennan 
  Lucy Wollam 
 Peel Hunt LLP, Nominated Advisor   Tel: [phone] 
                                     8900 
 Dan Webster 
  George Sellar 
 Liberum Capital Limited            Tel: [phone] 
                                     2000 
 John Fishley 
  Joshua Hughes 
 

Joules - 'a premium lifestyle brand with an authentic British heritage'

Established in Britain by Tom Joule nearly three decades ago, Joules is a premium lifestyle brand with an authentic heritage.

A true multi-channel lifestyle brand, Joules carefully designs and sells clothing, accessories and homeware for women, men and children, with personality to match the colourful and uplifting outlooks of its growing community of customers. Its products are available through its own retail stores, online, rural shows and events and wholesale channels.

Quality, Britishness, family values, colour and humour make Joules stand out from the crowd. This approach, along with an unwavering attention to detail, and drive to surprise and delight its customers with unexpected product details, has been central to the brand's success and expansion and remains at the heart of everything Joules creates.

www.joules.com | www.joulesgroup.com

Joules Fast Facts

-- Joules is an international brand, available in the UK, USA, Germany, France and other European markets

-- Joules operates 123* stores in the UK and ROI across a range of location types, has a significant online business and has a well-established wholesale business with over 2,000 stockists worldwide including John Lewis and Nordstrom

-- Joules' talented in-house print design team lovingly hand-draw all the prints you see within its collections each season

-- Joules is proud of its British heritage and still has strong roots in Market Harborough, the site of its first shop and head office - since day one

-- Colin Porter joined as COO in 2010 and became CEO in September 2015, with Tom Joule focusing on the creative side of the business in his capacity as Chief Brand Officer

-- Joules received Mark of Excellence for The Best Fashion Retailer at the Retail Week Awards 2018

-- Joules recently won Fashion Retail Business of the Year (between GBP101m and GBP500m turnover) at the Drapers Awards 2018. This was the second year in a row that the brand was awarded Fashion Retail Business of the Year. The Group was previously awarded Drapers Mainstream Brand of the Year in both 2017 and 2016, and also won Best British Fashion Retailer of the Year at the 2015 Drapers awards.

*As at 25 November 2018, excluding concessions

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

TSTTIBPTMBIMBJP

(END) Dow Jones Newswires

December 05, 2018 02:00 ET (07:00 GMT)