E Point Perfect

Joules raises full-year profit outlook as it cuts costs

// Joules expects to be ahead of market expectations due to additional cost reductions
// The company said in a statement that trading during the final weeks was consistent

Joules expects to be ahead of market expectations as it “makes good progress” on plans to improve profitability.

For the financial year ending May 29, 2022, due to additional cost reductions, Joules anticipates adjusted pre-tax profit to be slightly ahead of current market expectations.

The company said in a statement that trading during the final weeks was consistent with the trends outlined in its previous trading update released on May 4, 2022.

READ MORE: Joules calls in KPMG to seek cash lifeline as cost-of-living hits

The retailer added that the trading trends outlined in the group’s previous update have also continued for the first six weeks of FY23 with retail sales growth of 8.5% year on year.

Gross margins have remained under significant pressure with consumer appetite weighted towards mark downs amidst a heavily promotional environment.

The company further said that as at June 26, the group had net debt of £17.7 million, giving £15 million headroom within its current banking facilities, in line with the board’s expectations.

The group has received credit approval for a further £5 million headroom on its borrowing facilities with Barclays Bank until November 2022 to support working capital requirements over the group’s forthcoming seasonal borrowing peak

As part of the additional headroom being made available, it is anticipated that the group will grant additional security to Barclays. The group will also be restricted from paying dividends for the period that the facility is in place.

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