Mothercare reports first half year profit since 2010
Mothercare has reported its first half year underlying profit since 2010/11 after reducing its losses in the UK and growing its international sales.
In the 28 weeks to 12 October, the retailer made an underlying pre-tax profit of £2 million compared to a loss of £1.8 million a year ago. Worldwide network sales rose by 4.4% to £637.7 million.
In the UK, Mothercare’s like-for-like sales fell by 1.4% which was an improvement on the 3.4% decline seen in the same period in the previous year. The retailer also made further progress towards its goal of returning the UK to profitability by reducing its underlying losses to £14.9 million from £16.9 million in the same period last year.
Since the end of the year, Mothercare has closed an additional 18 loss making stores (five Mothercare and 13 Early Learning Centre) which means the UK business now operates from 237 stores compared to 311 stores at the end of 2011/12 financial year.
Mothercare’s international business delivered another period of double-digit growth with space up 11.9%, total sales up 13% and underlying profit up 13.5%. International like-for-like sales increased by up 4.8% as each of the retailer’s four regions enjoyed positive like-for-like and total sales growth.
Mothercare chairman Alan Parker said: "The group has delivered its first half year underlying profit since 2010/11. International has continued to see double-digit growth and the UK has seen losses reduced. Our geographic diversification has supported these results amid some challenging trading conditions. The business is moving to a firmer footing."
Simon Calver, chief executive of Mothercare, added: "The benefits of the changes we are making to the business are clear, with a return to underlying profit. Our International business continues to deliver double-digit growth and the opportunities in these markets remain.
"In the UK, online sales are growing and customer surveys indicate improving satisfaction rates. The newly launched CRM capability will help us improve service levels further as we align our offer to our customers' needs. We continue to target a return to profit in the UK and the reduced UK operating loss this half year is a step in the right direction.
"We are planning for consumer spending to remain subdued in the UK during the second half of the year. We have made progress with our Transformation and Growth plan, but there is more to do. We continue to strengthen our position, becoming the world's leading mother and baby specialist."
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