Mothercare posts profit fall but UK losses narrow
Mothercare has reported a fall in full year profits as it declared that it is only half way through the transformation of its brand.
In the 52 weeks to 25 March, group pre-tax profit after exceptional and non-underlying items fell from £9.7 million in the previous year to £7.1 million.
Meanwhile, group underlying pre-tax profit edged up 1% to £19.7 million.
In the UK losses narrowed to £4.4 million from £6.4 million in the prior year. Total UK sales were down 0.1% to £459.4 million but rose by 1.1% on a like-for-like basis.
Mark Newton-Jones, chief executive of Mothercare, said: “We are now in the third year of our turnaround and I am pleased to report that we have achieved much of what we set out to do from our six pillar strategy introduced in 2014. Whilst we are proud of what we’ve achieved to date, we believe we are only half way through the transformation of the Mothercare brand.
“Following a difficult start to the year, the UK recovered in the second half, returning to underlying profit for the first time in six years. International markets showed signs of recovery with strong growth in Russia and Indonesia, and a sales recovery in China, albeit the country is yet to return to positive cash profit. The Middle East continues to be economically challenging. We have launched ten new websites globally, bringing our total to 21 countries now trading online.”
Online sales were up 7.8% in the year and now account for 41% of UK retail sales.
During the period, Mothercare closed 21 underperforming stores and opened three new shops including one re-site. Some 40 stores were refurbished which means that 70% of store estate is in the new “club” format.
The company said it will be focusing its product offering on the maternity, newborn, baby and toddler up to pre-school categories.
Newton-Jones added: “Over time, this simpler approach will lead to a leaner, more agile business resulting in more stable and sustainable cash flows.”
“Our vision remains clear: to be the leading global retailer for parents and young children.”
