John Lewis Of Hungerford PLC Pre-Close Trading Update (4990Z)
September 21 2020 - 1:00AM
UK Regulatory
TIDMJLH
RNS Number : 4990Z
John Lewis Of Hungerford PLC
21 September 2020
21 September 2020
John Lewis of Hungerford plc
(the "Company")
Pre-Close Trading Update
John Lewis of Hungerford Plc (AIM: JLH), the specialist
manufacturer and retailer of kitchens, bedrooms and freestanding
furniture, announces the following unaudited pre-close trading
update for the financial year ended 30 June 2020 and confirms that
it intends to announce final results for the year ended 30 June
2020 by the end of October 2020.
As reported within our Finance and Operations Update on 30 June
2020, the timing of the initial lockdown period of 12 weeks,
restricted the Company's ability to trade during its seasonal peak
in the final quarter and this has had a significant impact on the
final results for the year ended 30 June 2020. Therefore,
profitability for the year ending 30 June 2020 will be materially
impacted by the reduced gross margin from the substantially reduced
despatched orders during our final quarter, combined with ongoing
operating costs during the core period of disruption, due to the
COVID-19 pandemic. Loss before tax is expected to be in the range
of GBP850k to GBP900k (subject to audit) - (30 June 2019: loss of
GBP229k).
Sales for the year ended 30 June 2020 were GBP5,552k (30 June
2019: GBP8,305k), with the year being split into three distinct
phases:
- The six months period from July 2019 to December 2019 was
reported in our Interim Results on 30 March 2020 with sales down 9%
year on year. This period reflected how fragile consumer confidence
had been due to the uncertainty surrounding Brexit and the December
General Election.
- The period from 1 January 2020 to 23 March 2020 saw a sharp
rebound in consumer confidence following the decisive General
Election result with Brexit also out of focus for a period. The
orders taken in this period were 10% higher than the prior year,
and by 23 March, immediately prior to lockdown, our pipeline of
quoted business was more than double the prior year.
- During the lockdown from 23 March 2020 to 30 June 2020, all
showrooms were closed and the factory was shut down for
approximately four weeks. Towards the end of the period, showrooms
re-opened on an 'appointment only' basis. We achieved some
significant individual sales throughout the lockdown period, with a
small team of our designers remaining operational to work with
customers during this period. We successfully transacted
'Virtual-Only' sales with no direct face to face interaction with
the customers. This is a new approach for the Company and is an
encouraging development, which could lead to achieving future
sales, which are beyond the immediate reach of our existing
showroom estate. Despite the complete closure of the estate for the
majority of this period, we still achieved committed orders at a
rate of around 30% of their prior year levels.
The Board has previously announced steps which have been taken
to rationalise its cost base from the beginning of the new
financial year. Combined with cash flow management actions taken to
protect the business during this significant period of trading
disruption and economic uncertainty, including a reduction in our
discretionary spend, a reduction in Directors' remuneration for an
agreed 3 month period and rent deferral agreements with our
landlords have been concluded. We continue to work hard to ensure
the resilience of the Company.
We were grateful for the support from the Government through the
retail business rates holiday, the local business grants and the
Job Retention Scheme, having furloughed between 30-70% of the team
during the core lockdown period. These actions helped the business
to reduce monthly cash operating costs throughout lockdown. As
reported on 30 June 2020, we also entered into a new financing
agreement to secure additional liquidity needed by the business
during this period. On 18 September 2020, the Company had cash
resources of GBP1,034k (30 March 2020: GBP350k).
The trading into the new financial year from 1 July 2020 to date
has seen all activities, including showrooms, manufacturing and
installation, resume full operations. We continue to trade 'by
appointment' only. We have seen accelerated online trading since
the end of the lockdown, reflecting a combination of pent-up demand
and our customers being more comfortable to engage via online video
calls, that have now become normalised. We continue to complete
some 'virtual-only' transactions, appreciating the cautiousness of
some of our customers, hesitant to visit our showrooms. Quoted
business has been sustained for some months now at record levels,
with a head start on the new financial year due to some deferred
sales, which we were unable to fulfil during the lockdown period.
Similarly, order intake in showrooms following their re-opening has
been markedly above prior year comparatives, reflecting latent
demand and also a notable underlying trend of consumers spending
more on their homes. The year on year growth for our despatched
sales and forward order book, against which a full deposit has been
taken, currently stands at +23% for the first three months of the
current financial year at GBP2.7m.
Enquiries:
John Lewis of Hungerford plc
Kiran Noonan - Acting Chairman / Managing
Director 01235 774300
Cenkos Securities plc
Katy Birkin/Russell Cook 0207 397 8900
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No. 596/2014 until the release of this
announcement.
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