Joules Group PLC on Tuesday said sales grew at the start of its current financial year and said it has received a £5 million extension to its borrowing facilities.

Shares were up 12% at 24.08 pence each on Tuesday morning in London.

The Leicestershire, England-based country lifestyle retailer said it expects to report adjusted pretax profit for financial 2022, which ended on May 29, to be slightly ahead of current market expectations, as a result of cost reductions.

At the time of interim results in February, it had guided an adjusted pretax profit of no less than £5.0 million for the recently completed year. In financial 2021, Joules booked adjusted pretax profit of £6.1 million, swung from a £3.9 million loss the year before.

Joules reported an annual rise in retail sales of 8.5% in the first six weeks of financial 2023, but said gross margins have been hurt by mark-downs in a ‘heavily promotional environment’, Joules explained.

On a more positive note, the company on Tuesday said it has received approval for a further £5 million in headroom on its borrowing facilities with Barclays Bank, part of Barclays PLC, until November this year.

As at June 26, Joules had net debt of £17.7 million, giving £15.0 million headroom on banking facilities, in line with expectations.

Joules said the further headroom would ‘support working capital requirements over the group’s forthcoming seasonal borrowing peak’. It said it will be restricted from paying dividends for the period that the enlarged facility is in place.

The company said it is having positive discussions with Barclays about medium-term financing, with these talks expected to conclude by September.

Joules intends to release its full-year results for financial 2022 in September.

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