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Mothercare swings to FY pretax profit

19 May 2016 09:48

Mothercare has booked a group underlying pretax profit of GBP19.6m for the FY, from a profit of GBP13.0m. Worldwide sales came in at GBP1,149.4m, from GBP1,203.5m, while total group sales hit GBP682.3m, from GBP713.9m.

Mothercare said UK like-for-like (LFL) sales were up 3.6%, from a rise of 2.0%, with total UK sales hitting GBP459.7m, from GBP458.1m. International, LFL sales were down 4.5%, versus a 5.6% rise a year ago, with total international sales at GBP689.7m, from GBP745.4m.

CEO Mark Newton-Jones said that two years into Mothercare's turnaround strategy it had recorded a 51% growth in underlying profit before tax, and the delivery of its first statutory profit in five years.

"The results highlight the significant progress we are making towards returning the UK to profitability. Improvements to our customer offer, both in store and online, and the look and feel of the store estate are driving like-for-like sales growth for a second consecutive year," he said in a statement.

"Nearly 40% of the store estate is now in the new and much improved format and the feedback from customers continues to be positive. This sales growth is not at the expense of gross margins which have also returned to growth. There is still much to do, but we are encouraged by our maintained trajectory towards profitability in the UK.

"Conditions for our International business remain challenging. The issues are primarily at a macro level, with economic and currency headwinds persisting.

"Whilst we recognise these pressures, we believe that we can also make some improvements in how we operate. We are exiting underperforming stores whilst continuing to grow space where there is potential for long term growth.

"We are also taking the lessons learned from our success in the UK and exporting them to our International markets. This is strengthening our International operations and improving the management of our brand globally."

HIGHLIGHTS:

- Further progress in UK with margins up 70 bps, online sales growth of 15%, like-for-like sales growth of 3.6% and losses reduced by 64%

- International remains challenging with economic and currency headwinds impacting profits, which were down (12%)

- Statutory profit before tax of £9.7m compared to a loss in the previous four years

- Closing net cash of £13.5m, after investing £39.2m during the year Review of International business completed with plans in place to strengthen the business

At 9:48am: (LON:MTC) Mothercare PLC share price was +6.63p at 125.38p

Story provided by StockMarketWire.com

Related Company: MTC

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