(Alliance News) - Mothercare PLC on Thursday said it expects annual earnings to fall, although to ahead of expectations.
Shares in Mothercare fell 21% to 6.94 pence each in London on Thursday afternoon.
In the financial year that ended March 25, the Hemel Hempstead, England-based retailer said it expects adjusted earnings before interest, tax, depreciation and amortisation of between GBP6.5 million to GBP7.0 million, ahead of analysts' expectations. However, this would be down between 42% to 46% from financial 2022's adjusted Ebitda of GBP12.0 million.
Net worldwide retail sales by franchise partners was up 8% to around GBP322 million for Mothercare's financial 2023 in continuing markets, after including no contribution from the Russian market due to suspending operations there at the end of its financial 2022.
Net debt at March 25 was GBP12.3 million, up 24% from GBP9.9 million a year earlier, while total cash fell 22% to GBP7.2 million from GBP9.2 million.
Mothercare also halved its pension scheme deficit to GBP39 million from GBP78 million.
"Once again our results demonstrate the resilience we have introduced to the business over recent years, where we continue to generate both profit and cash," said Chair Clive Whiley.
"Although our immediate priority remains to support our franchise partners as they emerge from a period of suppressed demand, ultimately for the benefit of our own business, we have also redoubled our efforts to restore critical mass.
"Accordingly we are engaged in discussions to drive the Mothercare brand globally by widening the bandwidth of our product offering, alongside penetration into new territories via a variety of routes to market."
By Greg Rosenvinge, Alliance News reporter
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Mothercare (MTC)