Joules Group (AIM:JOUL) has agreed to add £15 million to an existing revolving credit facility with Barclays to cope during a period of economic uncertainty as a result of the coronavirus pandemic.
The move follows the group’s recent successful equity placing earlier this month from which it raised gross proceeds of £15 million.
The British retailer said the additional facility will offer further liquidity “to navigate these challenging times” and will help progress growth plans following the disruption period.
The firm said the move is part of its efforts to conserve cash and that recent ‘proactive actions’, including its recent equity placing, has ‘significantly’ strengthened its balance sheet.
The group noted that its commerce channel, which typically represents around half of the group's overall retail sales, remains open for business.
Shares in Joules Group started the calendar year trading at 227.5p and has seen the shares fall as low as 40p. Today, the shares were trading 12.47% higher at 84.35p during Tuesday morning.
It said it is witnessing ‘strong levels’ of customer engagement on its online channels and that demand is ahead of expectations set at the time of entering lockdown.
“Our e-commerce sales over recent weeks continue to demonstrate the strength of the Joules brand and the loyalty of our customer base,” said Nick Jones, Chief Executive of Joules.
The group added that net debt as at April 19 was £7 million with £43 million of available headroom.
This morning, analysts at house broker Liberum moved the stock to 'buy' from 'under review' although they did not set a new target price for the retailer.
"We estimate that this available headroom could trough at £38.4 million in June thereby still giving a high degree of comfort," analysts commented.
"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 broker added.
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