JLH.L Regulatory News (JLH)

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

28 March 2022

John Lewis of Hungerford plc

(the "Company")

Half-year Report

John Lewis of Hungerford Plc (AIM: JLH), the specialist manufacturer and retailer of kitchens, bedrooms and freestanding furniture, is pleased to announce its unaudited interim results for the six months ended 31 December 2021

Overview

The Company is pleased to report that the first half sales to 31 December 2021 are the highest in our history, at £4.6 million (2020: £3.3 million), with the current full year total of despatched sales and confirmed forward orders standing at £8.5 million. After 38 weeks of trading, our future orders, combined with the confirmed order book above, would indicate a full year turnover, in excess of £10 million for the first time in our history. Given the uncertain climate in which we are operating, the Board have modelled a range of scenarios for the financial out-turn in the current year, and our central scenario would deliver a profit which is materially ahead of the prior year.

Sales for the six months to 31 December 2021 stood at £4,561k (2020: £3,326k) and the loss before tax for the period is £81k (2020: loss before tax £213k), with an improved cash position of £824k (2020: £504k).

The Company has taken steps to put in place important building blocks over the last two years, including significant investment in our Digital Strategy, the Novuna (formerly known as Hitachi) Finance - customer financing facility, together with the addition of key heads, to improve productivity around the business.

These initiatives have delivered a structural change in our model, with now sustained levels of consumer interest, as a result of our improved visibility online, which has reduced the dependency on local footfall in our territories. The investment in heads required to support this increase in new business span across front-end sales support, additional production heads and enhanced installation management, to ensure the customer experience remains a priority as we grow and scale the business.

The cost of the additional heads offset by the non-recurring government support during the pandemic, reflect the movement on the administration costs. The year-on-year movement on selling and distribution spend demonstrates costs related to increased sales including logistics, together with a return to pre-pandemic levels of marketing spend, delivering around 30% more new business into the Company, which has greatly contributed to the sales we report today. Both areas of spend play an important part in supporting our teams through the growth we are seeing in all areas of the Company.

With the majority of roles required now recruited, we are confident that there will be a minimal need to add additional heads moving forward into the next financial year FY23, as we capitalise on the strength of our brand positioning during our 50th Birthday year.

Our investments in the core building blocks, including the Digital Strategy, the Consumer Finance and the headcount required to ensure continuous improvements to our sales conversion are now bearing fruit, and we are pleased with the robust future order book as we near the end of the financial year.

Globally disrupted supply chains continue to have an impact on our purchasing activities, with our UK suppliers bearing additional costs to manage their businesses. We have passed on price increases of 8% to our customers in this financial year FY22 and anticipate further inflationary pressures necessitating another increase as we begin our new financial year FY23 on 1 July 2022.

Current Trading and Outlook

As stated above our despatched sales and confirmed forward orders (which we consider to be the best measure of current trading) for the first 38 weeks of trading of the current financial year stood at £8.5 million (2021: £6.5 million). Future orders against which a first stage deposit has been taken are substantially higher than the prior year, which we expect will deliver in excess of £10 million+ full year revenue performance. Our central scenario as stated above, would deliver a profit materially ahead of the prior year, together with a forward order book which is a substantially higher than the prior year.

Given the current levels of market fluctuations impacted by the unfolding global uncertainties, the Board remains cautious regarding any significant disruption to our production and logistics capabilities. The Company remains confident that the resilience in the order book would mean that any in-year disruption for this financial year FY22, would move a portion of the profits into the next financial year FY23 reporting period.

Kiran Noonan

Chief Executive Officer and Acting Chairman

28 March 2022

Enquiries:

John Lewis of Hungerford plc 01235 774300

Kiran Noonan - Chief Executive Officer and Acting Chairman

Allenby Capital Limited (Nominated Adviser and Broker) 020 3328 5656

David Worlidge / Nick Naylor / George Payne (Corporate Finance)

Amrit Nahal (Sales and Corporate Broking)