(Alliance News) - Mothercare PLC on Friday posted a narrowed loss for financial 2020, despite a reduction in revenue as it declared a focus on building its brand globally.
Shares in the homeware products and baby goods retailer were trading 25% higher at 10.55 pence each on Friday morning in London.
For the 52 weeks ended March 28, Mothercare reported a pretax loss of GBP6.4 million, narrowed significantly from the GBP18.0 million loss recorded the year prior. This was despite revenue falling 18% to GBP164.7 million from GBP199.8 million. Administrative expenses were slashed by 31% to GBP41.5 million from GBP60.4 million.
The Hemel Hempstead-based company said the administration process for Mothercare UK has been completed, including the transfer of brand rights and intellectual property into the group as it noted it eliminated around GBP30 million of operating losses through the closure of the UK retail division.
After the end of the year, Mothercare completed contracts for Boots to be its exclusive franchise partner covering the UK and Republic of Ireland for an initial period of 10 years. The Mothercare brand will become available in Boots stores and online from this autumn.
Turning to current trading, the company said that in the first 28 weeks of financial 2021, its franchise partners recorded total retail sales of GBP145.8 million, representing a 39% decline year-on-year due to the Covid-19 lockdown. However, it noted that 95% of its partners' global retail locations are now open, up from 27% in April 2020.
"There has been a strong recovery in the Middle East following the re-opening of stores after lockdown, with the exception of UAE which has been affected by the reduction in tourism. Recovery in Russia has been slow due to government restrictions delaying the full re-opening of the store estate. While all stores are now open, the market has not fully recovered with current performance driven down by lower footfall. Trade continues to be challenging in the key markets of India and Indonesia due to the continuing impact of Covid-19 on footfall and consumer confidence."
Looking ahead, Chair Clive Wiley said: "The UK high street is facing a near existential problem. decisive actions taken stem from a belief that the management and financial resource, being expended on fixing the conundrum of UK retailing, would be better served on our global ambitions to build the Mothercare brand and proposition around the world. whilst the UK is important for our brand heritage, it is certainly not the singular growth engine of the group. We are now singularly focused upon building Mothercare as a global brand, both in our existing territories and beyond."
Cash held at the end of the financial year was GBP6.1 million, down from GBP16.3 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Mothercare (MTC)