Joules Group PLC shares jumped on Tuesday as the company reported its interim revenue surpassed pre-pandemic levels, due to a ‘strong’ recovery retail demand and overall robust demand for its products.
The AIM-listed stock up 13% at 59.00 pence each on Tuesday afternoon in London.
Last week, the stock had hit a 12-month low, falling 46% in one day, after the company warned on a reduction in annual profit by nearly 20%. The company explained that revenue over the third quarter in the Christmas period and January was lower than it had expected.
The Leicestershire, England-based country lifestyle retailer reported a pretax profit of £2.6 million in the six months to November 28, doubled from £1.3 million in the comparable period a year before. This was on revenue which grew of 35% to £127.9 million from £94.5 million a year before.
Joules’ revenue also grew 15% against pre-pandemic revenue levels of £111.6 million.
The company attributed this to ‘a very strong recovery’ in retail demand that lead to an 80% rise in store revenue to £35.5 million from £19.7 million.
Furthermore, customer demand for its products remained ‘strong’ during the period, leading to ‘record levels’ of brand awareness and further ‘good’ growth in revenue and Joules’ active customer base.
Lastly, the company stated that its ‘increasingly diversified’ lifestyle product offering also supported its growth.
Joules did not declare an interim dividend, unchanged from a year ago. It explained that this was due to ‘cash requirements of rebuilding the group’s working capital post the Covid-19 pandemic impacts, and the continued uncertain outlook.’
The company expects to report financial 2022 adjusted pretax profit to be no less than £5.0 million, down 18% from £6.1 million the year before.
Joules also said it remains confident in its ability to deliver profitable growth for the next financial year and beyond.
‘Whilst the group experienced strong levels of customer demand that resulted in good revenue growth against the prior two comparative periods, profitability in the first half was impacted by various factors, most notably the severe inflationary cost environment. We have a clear plan of action to simplify the business, enhance efficiencies and mitigate the cost pressures that will enable the group to convert the strong levels of customer demand into sustainable, profitable growth,’ said Chief Executive Officer Nick Jones.
‘Whilst we acknowledge that there are areas within the business where we need to simplify our operations and improve profitability, we remain very excited in our long-term growth prospects. We have continued to see improvements in brand awareness and customer numbers, and we are confident that our broadened lifestyle proposition - which benefits from increased product and category diversification through Friends of Joules and Garden Trading - is more relevant than ever to consumers,’ Jones added.
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