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Mothercare posts annual pre-tax loss of £102.9m

UK sales down, while international sales surge.

The British mother and baby products retailer Mothercare has reported a pre-tax loss of £102.9m for the 53-week period ended 31 March 2012, compared to a profit of £8.8m for the same period last year.

Diluted earnings per share were 105.2p.

Group sales increased by 2.4 per cent to £812.7m (2011: £793.6m), while gross profit was £42.3m (2011: £55.9m).

Total international sales increased by 17.8 per cent to £672.4m (2011: £570.9m), while total UK sales were down by 4.6 per cent to £560.0m (2011: £587.2m) with a like-for-like sales decline of 6.2 per cent.

Total direct sales were up 0.8 per cent at £130m (2011: £129m) with direct in home down 1.7 per cent at £91.7m and direct in store up 7.3 per cent at £38.3m.

For the fiscal year 2012, the company expects total International sales to continue to grow strongly with circa 150 new store openings and sales growth of around 20 per cent. In the UK Mothercare expects the consumer environment to remain difficult and not anticipates any gains in gross margin.

Net debt at year end of fiscal 2013 is expected to be circa £25m with interest costs of £3m.

The group currently has 1,339 owned and franchised stores in 59 countries - 409 in Europe, 318 in Asia, 311 in the UK, 290 in the Middle East and Africa and 11 in Latin America.

Simon Calver, chief executive of Mothercare, said:

Worldwide network sales are up 6.4 per cent and our brands remain as relevant to our customers today as they ever have been. I have been fully involved in the formulation of the transformation and growth plan and I know that it is both the right plan and one which the team and I can deliver.

We have a long way to go, and the plan to bring the UK business back to acceptable levels of profitability will take three years. We need to invest in e-commerce, be ruthless with our non-store cost base and use our scale and growth worldwide to drive sourcing economies and pass these savings onto the customers to improve our value for money around the world. Everything we do will enhance customer value, experience and loyalty in each of our 59 countries. My team and I are up for the challenge and, whilst there is much to do in this difficult economic climate, I look forward to delivering the ‘Transformation and Growth’ plan. As a team, this will be our most important delivery yet.