Joules profits to beat forecasts after bumper end to year

Full-year profits at Joules Group are set to beat expectations, after the clothing and lifestyle retailer reported a strong end to the year.

The AIM-listed firm said sales in the year to 30 May rose 4% to £199m despite the "significant challenges" facing the sector, while pre-tax profits were now forecast to be in the range of £5.5m to £6.5m, "slightly ahead" of current market expectations.

Joules said revenues had been boosted by a strong online performance and the acquisition of the Garden Trading Company in February.

Retail revenues, which includes e-commerce as well as bricks and mortar sales, rose 9% year-on-year. As well as its own website, Joules runs an online marketplace called Friends of Joules.

In-store sales fell 41% year-on-year, after lockdown measures closed the estate for much of the year. However, Joules said sales since 12 April - when restrictions on non-essential retail were lifted - had been ahead of expectations and comparable to the same period two years previously.

Nick Jones, chief executive, said: "The impact of the coronavirus pandemic, the level of disruption and pace of change in the retail sector over the past 12 months has been truly unprecedented. I am delighted, against this backdrop, Joules has been able to deliver a very solid financial performance and strong strategic progress.

"As we move into the new financial year, Joules is now a stronger and more diversified business than ever before."

Broker Peel Hunt, which has a ‘buy’ rating on the stock, said: "May’s unplanned trading update was the catalyst for 45% and 77% upgrades to our 2022 and 2023 full-year forecasts, as well as confirming a much stronger finish to the 2021 full year. Today’s update confirms that momentum was maintained into year-end, and 2021 looks on track to finish slightly ahead of our upgraded estimates.

"We leave our outer-year forecasts unchanged, although the outlook remains compelling, with significant growth through the Friends of Joules platform, another great summer for British holidays, and strong growth in active customers."

As at 1130 BST, shares in Joules were off 1% at 282.0p.