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Mothercare (MTC)

Share Price:
Up 14.08p
Change Today:
0.18p
Market Cap:
48.11m

Mothercare blames negative press coverage as losses widen

22 Nov 18

LONDON (ShareCast) - (Sharecast News) - Loses at Mothercare widened in the first half as the mother and child retailer said negative press coverage had hit sales in the UK, although the international business was showing signs of recovery.
In the 28 weeks to 6 October, the group adjusted pre-tax loss widened to 6.2m from 2.6m in the same half a year ago on total group revenue of 295m, down 13.1%.

Like-for-like sales in the UK slumped 11.1% compared to a 2.5% increase in the first half of last year, while international LFL sales were down 3.4%, which was an improvement on the 8% drop seen in 2017.

Mothercare said the half was particularly challenging for the UK business, set against a backdrop of a weakening consumer market, which was further compounded by the stresses the company found itself in financially.

The group said its refinancing, the CVA and the subsequent negative press coverage had affected the sales performance of the UK business and suppressed customer footfall both online and in UK stores.

Total sales in the UK declined by 14.3%, with store sales down 13.8% and online down 7.8%.

Chief executive officer Mark Newton-Jones said: "Our international business is showing signs of recovery after a difficult few years and some core markets, including Russia, China and Indonesia, have moved into growth.

"The UK retail environment, however, remains very challenging and given the ongoing uncertainty with consumer confidence, alongside the short-term impacts of our operational changes and restructuring programme, we expect performance in the remainder of our financial year to remain volatile.

"Thereafter we are confident that our strategy will ultimately reinvigorate the business and restore Mothercare as a leading global specialist for parents and young children."

Net debt fell to 21.5m from 44.1million at 24 March and the company said it plans to pay down its existing bank indebtedness next year.

At 1000 GMT, the shares were down 7.9% to 16.18p.

Russ Mould, investment director at AJ Bell, said: "Mothercare has issued an ugly set of numbers with an ongoing sales decline.

"Mothercare feels like one of the longest ever recovery stories in the retail sector and quite frankly it is remarkable that shareholders are still being patient.

"The company blames negative press coverage for affecting its UK sales performance. A business in its situation shouldn't go blaming others. It should really take a hard look at its proposition and question whether the service standards are good enough, the website easy to use, the prices competitive, and the entire customer experience pleasant enough.

"If it fails on any of these counts then shoppers will simply look elsewhere and Mothercare would have no-one to blame but itself."



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Market Data

Currency UK Pounds
Price 14.08p
Change Today 0.18p
52 Week High 24.00p
52 Week Low 13.20p
Volume 12,159,634
Shares Issued 341.81m
Market Cap 48.11m

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