Mothercare has achieved a notable increase in profits for the financial year ending 30 March 2024.
- The company’s profits rose to £3.3 million, a stark contrast to the previous year’s loss of £0.1 million.
- Adjusted EBITDA saw a modest increase of 3%, reaching £6.9 million, despite a decline in worldwide retail sales by 13%.
- Turnover experienced a drop of 23%, highlighting ongoing challenges in key markets, especially the Middle East.
- A strategic refinancing deal and a new joint venture with Reliance Brands are set to bolster future growth.
Mothercare has reported a significant turnaround in its financial performance for the year ending 30 March 2024, achieving profits of £3.3 million as opposed to a loss of £0.1 million in 2023. This improvement signifies a promising change in the company’s financial health.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 3% to £6.9 million compared to the previous year. However, the company faced challenges with a 13% decline in worldwide retail sales by franchise partners, resulting in total sales of £280.8 million. Mothercare attributed this drop primarily to ‘the continuing challenges in our Middle Eastern markets’.
The financial report also highlighted a 23% decrease in turnover, falling to £56.2 million year on year. These figures underscore the difficulties the company continues to face in maintaining its market position amid regional and global pressures.
On 17 October, Mothercare announced a refinancing of its existing debt facilities, securing £8 million with Gordon Brothers and raising an additional £16 million from a joint venture in South Asia with a subsidiary of Reliance Brands. This venture sees Reliance Brands holding a 51% stake, signalling a significant partnership with potential to drive further growth.
Mothercare’s full-year trading statement expressed optimism about the future, noting that a ‘de-leveraged Mothercare can once more move forward with confidence and invest appropriately in the Company’s future development’. The company plans to leverage these financial strategies to explore new growth opportunities, enhance branded product ranges, and establish robust business connections.
Clive Whiley, chairman of Mothercare, added to the optimistic outlook, stating ‘We are now focused upon restoring critical mass alongside delivering our remaining core objectives. This is an exciting prospect for our partners, our colleagues and all our stakeholders alike as we finally leave behind the turmoil of recent years.’
In a move reflecting its strategic realignment, Mothercare temporarily suspended trading in its shares on the AIM market following a missed deadline for its audited results amid ongoing refinancing negotiations.
Mothercare’s recent financial restructuring and strategic partnerships position it well for future growth despite current market challenges.
