AUS
NZ
UK
CA
USA
IND
Highlights
- Retail Sales Decline: Worldwide retail sales by franchise partners fell to £280.8 million, down from £322.7 million in the prior year.
- Adjusted EBITDA: The Group recorded an adjusted EBITDA of £6.9 million, exceeding analyst expectations despite market challenges.
- Positive Profit Recovery: Mothercare reported a profit of £3.3 million for the year, rebounding from a loss of £0.1 million in 2023.
Shares of Mothercare plc (LSE:MTC), a renowned British brand connecting with parents of newborns and children, jumped almost 44% today after the company released its full-year results for the 53-week period ending on 30 March 2024. The results reflect both the ongoing challenges in specific markets and a positive outlook for the future.
Key Financial Highlights:
- Worldwide Retail Sales: The company reported worldwide retail sales of £280.8 million through its franchise partners, down from £322.7 million in the previous year.
- Adjusted EBITDA: Mothercare achieved an adjusted EBITDA of £6.9 million, slightly up from £6.7 million in 2023, surpassing analysts' expectations.
- Net Borrowings: The Group's net borrowings increased to £14.7 million, compared to £12.4 million at the end of the previous fiscal year.
Current Trading and Outlook: In the first half of FY25, the Group's franchise partners recorded total retail sales of £121.2 million, down from £137.3 million in FY24. This decline can be attributed primarily to ongoing challenges in the Middle Eastern markets, which have been particularly tough for the brand.
Mothercare's recent strategic moves include a revision of financing arrangements, which have reduced secured debt facilities to £8 million. This, along with the £16 million gross consideration from Reliance Brands Holding UK Limited, positions the company to de-leverage effectively and invest in future development with renewed confidence.
The Group plans to utilize its new joint venture in India and the subsequent refinancing as a foundation to explore growth opportunities. This includes establishing connections with other businesses, expanding branded product ranges, and pursuing licensing opportunities beyond historical boundaries.
Financial Performance: Mothercare's profit for the 53 weeks ending on 30 March 2024 stood at £3.3 million, a significant recovery from the previous year, which saw a loss of £0.1 million. The net debt at the end of the period was reported at £14.9 million, up from £12.9 million in 2023.
