Mothercare has reported strong international sales but the UK business continues to struggle, with a structural review planned.
In its latest Interim Results for the 28 weeks (first half) ended 8 October 2011 Mothercare reports worldwide network sales £623.9m, up 5.4% (2010: £592.0m) and Group sales £412.9m, up 4.0% (2010: £397.1m).
Group underlying loss before tax was £4.4m compared to 2010 profit of £12.2m.
Group loss before tax after exceptional charge and other non-underlying items was £81.4m (2010: profit of £0.3m)
Net debt was £24.6m (2010: £8.6m); total credit facility £90.0m
The company reported an underlying basic EPS 5.1p loss (2010: 10.3p profit with the Interim dividend slashed to 2.0p (2010: 6.4p)
UK performance saw a weak first half with total UK sales £281.1m, down 4.3%. Like-for-like sales down 7.0% and Direct in Home sales £42.6m, down 4.2%. Gross margin was down 4.0%
The UK property restructure announced in May 2011 on track to deliver significant benefits over next 18 months, targeting a reduced portfolio of 266 stores
Alan Parker, Executive Chairman, said: "The Mothercare group has had a difficult first half. Whilst the International business continues to perform strongly our performance in the UK illustrates the extent of the challenges facing the business in a weak economic and consumer environment.
"Nevertheless, my first 100 days as Chairman of Mothercare plc have confirmed my initial views regarding the strength of the Mothercare and Early Learning Centre brands, the significant global opportunity of our International business and our world class sourcing operation which is a core competency of the group. I am confident that we can return to a profitable and sustainable business in the UK over time.
"We are announcing today a structural and operational review of our planned UK business size and shape. This review will consider the number, format and location of retail outlets and the plan for e-commerce.
"It will also include the right-sizing of our overheads to fit the new operating base. The review will include the important Christmas trading period and will be completed in the first quarter of the calendar year with implementation in 2012/13.
"The search for our new CEO is proceeding on plan. We are determined to find the right candidate for this important role. In the interim period, the Board has appointed me to the role of Executive Chairman and I will continue to lead whatever decisions are necessary to restore profitability to the UK and create the structure for long-term success."
At 8:55am: (LON:MTC) Mothercare share price was -4.2p at 150.8p
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