- Prachi Singh |
Mothercare Plc in its results statement for the first half year ending October 6, 2018, said that adjusted loss before taxation reached 6.2 million pounds (7.9 million dollars) compared to 2.6 million pounds (3.3 million dollars) last year. Group adjusted loss before taxation and foreign currency revaluations was 9.1 million pounds (11.6 million dollars) compared to 0.7 million pounds (0.9 million dollars). The Group recorded a pre-tax loss of 14.4 million pounds (18.4 million dollars) compared to 16.8 million pounds (21.4 million dollars), which included adjusted items of 8.2 million pounds.
Commenting on the half-year trading, Mark Newton-Jones, CEO of Mothercare said in a statement: "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."
UK like-for-like sales decline by 11.1 percent
UK like-for-like sales declined by 11.1 percent year-on-year, with retail stores sales down by 13.8 percent and online sales down by 7.8 percent. The company said that the UK business has been impacted by declining footfall and online sessions driven by macroeconomic factors, as well as challenges around supplier restrictions on stock availability and the impact on the brand from negative coverage of the refinancing and restructuring process announced in May 2018. UK adjusted losses before taxation and foreign currency revaluations increased to 17.6 million pounds (22.5 million dollars).
Mothercare added that international retail sales in constant currency were down 2 percent where challenging economic conditions in some markets impacted performance. Growth across its key markets in Russia, China and Indonesia, was offset by underperformance in the Middle East, along with the sales impact from the transition to a new partner in India. Despite this decline in sales the International business has seen favourable movements in foreign exchange rates and made central cost savings as a result of last year's restructure, helping to maintain flat year-on-year international adjusted profit of 14.9 million pounds (19 million dollars).
Worldwide sales in the 28 weeks were lower by 61.8 million pounds (79 million dollars) as a result of unfavourable currency impacts and a decline in both UK and international like-for-like sales.
The Mothercare board has decided that given the refinancing of the business, the company will not pay an interim dividend for 2018/19.