Mothercare full year results hit market expectations
Mother and baby products retailer Mothercare said a recovery in its fourth quarter trading performance after a difficult third quarter has helped it to deliver full-year results in line with market expectations.
In the 52 weeks to 29 March 2014, worldwide network sales edged up 0.5% to £1.2 billion although total sales slipped by 2.6% to £724.9 million.
Group underlying pre-tax profit rose by 61% to £9.5 million in the year. After taking into account exceptional and non-underlying items, Mothercare made a pre-tax loss of £26.3 million.
International sales climbed 6.4% to £729.2 million despite significant currency headwinds while underlying profit rose by 7.6% to £45.3 million. On a like-for- like basis, international sales edged up 2.5%.
However, the UK business performed less well with total UK sales falling 7.5% to £462.3 million as the retailer continued to close loss-making stores. On a like-for-like basis, UK sales dropped by 1.9% compared to a fall of 3.6% in the previous financial year. Underlying losses narrowed from £21.6 million to £21.5 million in the year.
Mothercare chairman Alan Parker said: "After an encouraging set of interim results, Q3 trading over peak was a disappointment. We saw a recovery in the Q4 trading performance and have delivered full-year results in line with market expectations set in January 2014. This momentum has been maintained into this quarter, and we look forward to sustaining this improvement in the new financial year.
"Despite the increasing effect of currency devaluation on reported numbers, we have seen good growth in international, both in retail sales and profits with all four regions contributing strongly. In conjunction with our franchise partners, we have good visibility of future plans, which continue to show double-digit space growth.”
The group closed a further 35 loss-making UK stores during the year which means it now operates from 220 stores. It is also working to improve product ranges and its multi-channel service.
Mothercare said its search for a new chief executive is progressing well. In the meantime, the role is being undertaken on an interim basis by former Shop Direct chief executive Mark Newton-Jones.
Parker added: "Underlying group profits are up on last year, but there is a lot more to do. We are determined to achieve our goal of returning the UK to profitability, growing our international business and building shareholder value over the long-term."
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