LONDON - Mothercare plc, the well-known British retailer for parents and young children, has reported a modest profit for its full fiscal year ending March 30, 2024, despite a decline in worldwide retail sales. The company revealed a profit of £3.3 million for the 53-week period, a turnaround from a slight loss of £0.1 million in the previous 52-week period ending March 25, 2023.
The group's worldwide retail sales by franchise partners fell to £280.8 million from £322.7 million year-on-year, marking a 13% decrease. Online sales also saw a minor dip, from £29.3 million to £28.5 million. Additionally, the total number of stores decreased by 10%, with the overall space shrinking by 6%.
Despite the drop in sales, Mothercare's adjusted EBITDA saw a slight increase to £6.9 million, up from £6.7 million the previous year, surpassing analysts' expectations. The adjusted operating profit also rose by 5% to £6.5 million. The company's net debt increased to £14.9 million, compared to £12.9 million in 2023.
In the current trading period, the company's franchise partners recorded total retail sales of £121.2 million in the first half of the fiscal year 2025, down from £137.3 million in the same period the year before. The decline is largely attributed to ongoing challenges in Middle Eastern markets.
Mothercare has also revised its financing arrangements, reducing secured debt facilities to £8 million. This move, combined with a £16 million consideration from Reliance Brands Holding UK Limited announced on October 17, 2024, is expected to help the company reduce its leverage and invest in future development.
Chairman Clive Whiley expressed optimism about the company's direction, stating, "We are now focused upon restoring critical mass alongside delivering our remaining core objectives." He also emphasized the excitement for partners, colleagues, and stakeholders as the company moves past the turbulence of recent years.
The company plans to leverage growth opportunities through a new joint venture in India and by expanding its branded product ranges and licensing. This strategy aims to capitalize on the full range of growth opportunities available to Mothercare.
This financial update is based on a press release statement from Mothercare plc.
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