Mothercare has released its half-year results on Thursday morning. The report warns that trading conditions may remain “volatile” for the remainder of the financial year.
Following the announcement, shares in the group (LON:MTC) slid over 5.5%.
The group announced its pre-tax loss of £6.2 million in the six months to 6 October. In the same period last year, the figure was recorded as £2.6 million.
Additionally, the results reveal that net debt is at £21.5 million. Meanwhile, worldwide sales were recorded at £566.1 million, which remains 9.8% below the levels of this time last year.
In the report, Mothercare stated that international business does show signs of recovery.
Moreover, the group remains on track to deliver at least £19 million of cost savings, sticking to its strategic transformation plan.
Despite this, the group has blamed the continuation of difficult trading conditions for its weak results. Indeed, UK like-for-like sales dropped by 11% which, according to the group, reflects the wider market uncertainty. Likewise, negative brand coverage concerning the group’s refinancing has also driven decline.
CEO of Mothercare, Mark Newton-Jones, commented on the results:
“Over this period, we have continued our relentless focus to transform Mothercare into a business that has a sustainable and relevant future for its global customer base.”
“We have completed the capital restructuring of the business, the UK store closure programme is well underway and due for completion earlier than planned, we are making our sourcing operations more efficient and our cost-saving initiatives are well on schedule.”
“This momentum has allowed us to focus on revising the overall structure of the Group, something which will help drive a greater focus on becoming a stronger global brand, with improved product design, marketing and distribution of Mothercare products around the world. At the same time, in the UK, the team will be singularly focused on managing trading and operations, as a typical franchisee would, with the objective of bringing the UK business back to profitability.”
“Our International business is showing signs of recovery after a difficult few years and some core markets, including Russia, China and Indonesia, have moved into growth. The UK retail environment, however, remains very challenging and given the ongoing uncertainty with consumer confidence, alongside the short-term impacts of our operational changes and restructuring programme, we expect performance in the remainder of our financial year to remain volatile.”
“Thereafter we are confident that our strategy will ultimately reinvigorate the business and restore Mothercare as a leading global specialist for parents and young children.”
At 14:20 GMT today, shares in Mothercare plc (LON:MTC) dropped by 5.58%.