Joules, the Market Harborough-based lifestyle group, has “achieved good revenue growth,” according to a pre-close trading update in respect of the 26-week period ended 28 November 2021 (the first half of the group’s financial year ending 29 May 2022), yet is expecting full year profit before tax to be below current market expectations. Customer demand for the group’s products remained strong during the period resulting in group revenue increasing by 35% to approximately £128m (FY21: £95m). Joules said this performance reflects continued growth in active customers to 1.9m alongside the strength of the group’s flexible model which offers customers multiple channels to engage with and shop the Joules brand. Joules’ stores delivered a strong revenue performance, up 80% against the prior year. Store revenue was just 3% behind the comparable pre-pandemic period two years ago despite lower high-street footfall. The company noted that this performance reflects the “attractive locations of the Joules store estate” as well as the opening during the second half of FY21 of five Centre Parcs locations, which have performed particularly well. E-commerce grew 14% and 54% on a two-year basis. This performance benefitted from the acquisition of Garden Trading and the performance of third-party e-commerce partners. Gross platform demand across Joules’ websites increased by 2% against a transformational prior year supported by continued growth within the Friends of Joules marketplace. Garden Trading revenues increased 4% year-on-year and 77% on a two-year basis despite global supply chain disruption. Wholesale revenue, excluding Garden Trading, increased 16% year-on-year reflecting the reopening of the group’s wholesale partners in the UK and internationally. However, revenue remained significantly down on a two-year basis, in part due to supply chain challenges. The board anticipates strong H2 wholesale performance benefitting from despatches delayed from H1 as well as a stronger orderbook for Spring/Summer 22. The well-documented global supply chain issues have resulted in some higher costs and stock delays during the period. In addition, labour shortages in Joules’ third-party operated distribution centre (DC) have resulted in extended product delivery times to online customers, stores and wholesale partners. These factors were particularly acute in November, including the Black Friday period, which alongside weaker year on year online traffic contributed to performance during this month being below expectations. Group profit before tax and adjusting items for the period is anticipated to be in the range of £2.0m – £2.5m (FY21: £3.7m). Global supply chain challenges are expected to remain during at least the second half of the group’s financial year and there is increased consumer uncertainty as a result of the emergence of the Omicron coronavirus variant. Supported by a strong stock position and wholesale orderbook, the business said that with actions taken to improve productivity at the DC, and the ongoing strong customer demand for the group’s products, the board is confident that the group will achieve continued strong revenue growth in H2 and an improved profit performance. Nevertheless, full year profit before tax and adjusting items is now expected to be below current market expectations and in the region of £9m to £12m notwithstanding any further significant Covid restrictions. Nick Jones, Chief Executive Officer of Joules, said: “Joules has achieved good revenue growth against the prior two comparative periods reflecting the strength of the group’s flexible model and despite a challenging external trading environment. Alongside the strong appeal of our core Joules brand, the group continues to benefit from its increased diversification through Friends of Joules and Garden Trading, both of which continue to give customers even more reasons to shop with us. “While we have not been immune to certain industry-wide pressures including supply chain disruption and cost inflation, we remain focused on delivering the group’s long-term growth strategy. We have continued to invest in the business to support our plans and, despite the high levels of near-term consumer uncertainty, we remain very confident in achieving the group’s exciting future potential.”

The Greater Lincolnshire Local Enterprise Partnership is to reallocate £2m of its existing funding towards a new Clean Growth Accelerator Fund to help tackle the impact of climate change.

Businesses in the Midlands attracted £241 million in Venture Capital (VC) investment in Q3 of 2021, raised across 27 deals, according to KPMG’s latest Venture Pulse Survey. The type of financing seen in the deals were split between early-stage VC (37%), later stage VC (22%), angel (19%) and seed round (22%). The most significant investments in the Midlands in Q3 included Birmingham-based Onto, developers of an electric car subscription platform (£180 million raised), Easol, developers of business/productivity software based in Walsall (£17 million raised) and regenerative medicine platform developers, Locate Bio, from Nottingham (£12 million raised). Stuart Pilgrim, Head of TMT M&A at KPMG in the Midlands, said: “Businesses across the Midlands have shown great resilience and innovation to not only survive the pandemic, but to also attract this much investment. It’s clear that tech and tech-enabled businesses are very appealing to investors, and I expect this to continue for the foreseeable, especially as our region is home to lots of high quality scaleups. “As these businesses continue to develop, their successes have a positive impact on the economy through growth and the creation of jobs. It’s an exciting time to be in the Midlands with all of the fantastic ideas and work that’s happening locally, and I know we’ll be watching this space as these businesses go on to become even bigger and better.” National picture A record high of over £6.5 billion was invested by Venture Capital (VC) in UK scaleups over the summer. The KPMG Venture Pulse report found that after two extraordinarily high quarters in 2021, UK scaleups continued to attract funding from across the globe in Q3 21, with eager investors prepared to pay premium prices for strong UK innovators with a proven track record. Nearly £20 billion of VC investment has been raised so far this year by scaleups in the UK. While fintech was the hottest area of investment in the UK, a diversity of other companies also attracted funding – such as virtual event platform Hopin (£330 million), electric vehicle subscription service Onto (£175 million), AI/ML accelerator company Graphcore (£162 million), and flower delivery service Bloom & Wild (£125 million). Later stage deals involving well established scaleup businesses took the bulk of funding from VC investors, but seed deal value remained steady. More than £290 million was invested in the UK at seed level over Q3 21, a slight decline from the record levels of investment seen in the first half of the year. Seed level investment remain significantly lower than pre-pandemic levels however, by both number of deals closed, and total amount raised. Corporate Venture Capital (CVC) investment in UK innovators also reached a new high of £2.8bn in Q3 21, a 9% increase in value from Q2 21 – as innovation continues to dominate boardroom priorities following the pandemic. The volume of CVC-affiliated deals completed over the summer increased by 8% on the previous quarter. US corporate investors such as Google Ventures and Second Century Venture continue to be the most active CVC investors in Europe, with 15 deals between them, more than the European corporate investors in the top ten combined. Commenting on the investment finding its way to UK innovators, Bina Mehta, Chair of KPMG UK and Head of the firm’s UK Emerging Giants Centre of Excellence, said: “The strength of the UK innovation brand is flying high with areas such as artificial intelligence (AI), cybersecurity and FinTech attracting interest and finance from greater numbers of new players to the UK market, driving up valuations for our most sought-after innovators. “Our recent CEO survey found that disruptive technology was cited as the biggest threat to large corporates, so it is unsurprising that in order to accelerate their digital transformation or boost their digital capabilities, many are now partnering with, investing in, or acquiring innovative scale up businesses. “Corporate Venture businesses have driven some of the largest rounds of funding for UK innovators. The increased dependence we all have on technology has seen large amounts of funding flow towards fast growth businesses with a success story to tell around new products and services that are helping us all to adapt to a new remote world.”