Mothercare Plc announces preliminary results for the 53 weeks ended 31 March 2012 and an update on the 'Transformation and Growth' plan. Worldwide, the group has 1,339 owned and franchised stores in 59 countries - 409 in Europe, 318 in Asia, 311 in the UK, 290 in the Middle East and Africa and 11 in Latin America.
Financial results
• Worldwide network sales £1,232.4m, up 6.4% (2011: £1,158.1m)
• Group sales £812.7m, up 2.4% (2011: £793.6m)
• Total International sales £672.4m, up 17.8% (2011: £570.9m); LFL sales up 6.1%
• Total UK sales £560.0m, down 4.6% (2011: £587.2m); LFL sales down 6.2%
• Group underlying profit before tax £1.6m (2011: £28.5m)
• One-off exceptional charge of £104.4m of which £78.5m already reported in H1
• Group loss before tax after exceptional charge and other non-underlying items £102.9m (2011: profit of £8.8m)
• Refinanced to fund 'Transformation and Growth' plan. Increased committed bank facilities to £90m; extension of term to May 2015 and covenant reset
Results on a non-statutory, but more comparable, 52-week basis are set out in the Financial Review.
'Transformation and Growth' plan highlights
Four key opportunity areas over the three years of the plan:
1. Lean retail: Reduce non-store costs by £20m p.a. by FY15 and improve efficiency in our UK and sourcing operations; 2. Restore UK profitability: Focus on our profitable portfolio of c. 200 stores, retaining national coverage and benefiting profit by a further £13m p.a. Drive sales by redefining our value proposition, launch innovative products and improving store level customer service and satisfaction; 3. Accelerate International growth: Increase sales growth to 20% p.a. Rapidly expand our store base in India, China, Russia and Brazil and other key markets; 4. Multi-channel worldwide: Launch new UK online and in-store e-commerce platform to step change conversion and drive sales growth. Introduce websites in all major International markets.
Alan Parker, Chairman said:
"This has been a tough year for Mothercare and we have completed a comprehensive review of the business. Simon Calver has now joined as Chief Executive and I have reverted to the role of Non-Executive Chairman.
“Simon brings the right blend of turnaround skills and multi-channel global brand experience for Mothercare's long term growth. Looking ahead to the immediate future the UK market remains challenging; however, International continues to grow.
“Our focus on cost reduction is a priority in achieving a performance improvement this year. Overall we now have a robust plan for transformation and growth with new, strong leadership capable of delivering the results."
Simon Calver, Chief Executive said:
"I am excited to have joined the Mothercare group as CEO and I am confident about the opportunities ahead. Worldwide network sales are up 6.4% and our brands remain as relevant to our customers today as they ever have been.
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