Joules share price plummets after retailer calls in KPMG to help boost profitability
Joules share price has tumbled after it confirmed weekend reports that it has called in the KPMG debt advisory to help boost its cash position.
As set out in its May trading update, the premium lifestyle group said it will continue to focus on improving profitability, cash generation and liquidity headroom.
As at 29 May, the firm had net debt of £21.4m, giving £11.3m headroom within its banking facilities, in line with board expectations.
Joules said in a trading update on Monday morning: “Whilst the Group continues to manage its cash resources carefully over its seasonal borrowing peak, it expects to have sufficient liquidity to manage its working capital requirements over this time”.
Its share price had sunk by some 20 per cent by Monday afternoon.
The high street name said it was making “good progress” against previously announced key initiatives aimed at simplifying the business and optimising the cost base to improve long-term profitability.
The focus remains on implementing significant changes to its wholesale operations to focus on fewer, profitable wholesale accounts and improving and simplifying the end-to-end product process to reduce costs and shorten lead times.
The firm said in its latest trading update that market conditions had become “more challenging” following the Easter period as consumer confidence was battered by cost of living.
“Joules has not been immune to these sector-wide pressures, which have led the group’s profit performance to fall below management’s expectations”, the firm said.