Brokers note - Mothercare
KBC Peel Hunt has re-iterated its Hold recommendation on Mothercare following its interim results.
The broker says the figures were marginally behind its forecasts with a £10 million pre-tax profit. As expected the focus of the results was on the company’s out-of-town store drive and closure of its high street outlets.
KBC Peel Hunt continues to believe that Mothercare offers investors material long-term benefits on the back of its international plans as well as increased space gains in the UK but its trading on a PE of almost 19x earnings for 2010 ensures for now that the broker keeps its ‘Hold’ recommendation. It also keeps its target price unchanged at 620p, which compares with an underlying share price of 634.5p following the 1% increase in early trading today (November 18).
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