Joules secures £15m credit increase, says online sales solid

Fashion retailer Joules said on Tuesday that it has secured a £15m increase to its revolving credit facility with Barclays Bank as it hailed strong online sales.

The addition to the credit facility follows a placing earlier this month in which the group raised £15m.

Joules said the actions it has taken to conserve cash throughout the coronavirus outbreak, along with the equity placing and increased RCF, have "significantly strengthened" its balance sheet, providing sufficient liquidity headroom to manage a Covid-19-related downside scenario and the resources "to emerge relatively stronger from this unprecedented situation".

The company said its e-commerce channel, which normally accounts for about half of its overall retail sales, remains open for business. Customer traffic and demand to Joules.com have been running ahead of the revised expectations that were set when the UK entered lockdown and Joules said it continues to see strong levels of customer engagement with the brand across social media.

The group's net debt position at 19 April was £6.9m, with £43.1m of available headroom.

Chief executive officer Nick Jones said: "The completion of the additional facility with Barclays Bank plc provides Joules with further liquidity to navigate these challenging times and positions the business to continue to progress its strategic growth plans following the current period of significant disruption.

"Our e-commerce sales over recent weeks continue to demonstrate the strength of the Joules brand and the loyalty of our customer base. We know that further challenging times are ahead, but we are confident that, with the continued support of our colleagues, customers and the wider Joules community of suppliers and partners, Joules is well positioned to manage these challenges."

House broker Liberum said: "Encouragingly, spot net debt of £6.9m is better than management’s expectation, helped by a stronger online performance than envisaged when the lockdown first began.

"The group’s healthy financial position and the strength of the Joules brand give us confidence in its ability to navigate through the near-term uncertainty. The shares have fallen 63% the last three months, and trade on a Dec-22E price-to-earnings of 6x (on our old estimates which may remain under review)."

Liberum reinstated its ‘buy’ rating on the shares, which were trading up 6.8% at 80.10p at 0910 BST.