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(Alliance News) - Mothercare PLC on Friday said revenue fell in its latest financial year, but that its pretax loss narrowed and it expects to complete refinancing discussions "shortly".
Shares in Mothercare were up 3.6% at 4.30 pence in London on Friday shortly before midday, but had risen as high as 5.00p earlier in the morning.
The Hemel Hempstead, England-based retailer said its pretax loss was GBP2.2 million for the year ended March 25, narrowed from GBP11.1 million the previous year.
Revenue on the other hand fell by 11% to GBP73.1 million from GBP82.5 million. Net worldwide retail sales by franchise partners decreased 16% to GBP322.7 million from GBP385.3 million, due in part to Mothercare's withdrawal from Russia in June 2022.
More recently, total retail sales fell 15% in the first 25 weeks of the current fiscal year, to GBP132.5 million from GBP156.8 million, largely due to "continued challenges" in Mothercare's Middle Eastern markets.
Cost of sales decreased 4.9% to GBP52.2 million, and administrative expenses fell 3.1% to GBP15.5 million. Finance costs decreased 9.7% to GBP2.8 million.
Mothercare declared no interim dividend, unchanged from last year.
Net debt increased to GBP12.9 million at March 25, from GBP11.0 million at March 26, 2022. Cash and equivalents decreased to GBP7.1 million from GBP9.2 million.
Mothercare had in September 2022 completed a GBP19.5 million secured four-year loan facility, but said the interest rate has since increased to 19.2% "which coupled with the extended time to return to pre-pandemic retail sales levels...means that we will require waivers to future periods' covenant tests."
Mothercare said on Friday, however, that it expects "to complete a refinancing shortly," and is in discussions with key stakeholders and financing partners "to ensure that the Group has adequate and appropriate financing for the future." It said it does not require additional liquidity at present, " although this would be preferable to accommodate business development and unanticipated challenges."
Chair Clive Whiley nonetheless said he was "pleased with the progress Mothercare has made during the year as we continue our transformation towards an asset-light, global franchising business".
He continued: "Mothercare remains in an unparalleled position of being a highly trusted British heritage brand, with a significant opportunity to leverage this brand equity and grow our global presence beyond our existing franchise network.
"There is still work to do, but we are excited about the future prospects for Mothercare as we leave behind the turmoil of recent years."
By Emma Curzon, Alliance News reporter
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