Mothercare anticipates reporting a small EBITDA profit for the financial year

UK mother and baby goods retailer Mothercare expects to report a small profit for the financial year, against previous guidance of a small loss.

In its pre-close trading and business update this morning (25 May), the company said whilst it performed broadly in-line with its expectations in the final period of the year, it now expects to report a small EBITDA profit, before adjusting items, for the year ended 27 March.

It added, however: “We are not immune to the evolving Covid-19 impacts on our franchisees’ operations country by country.”

Unaudited net worldwide franchisee retail sales for the period, meanwhile, were GBP326m (US$462.2m), some GBP216m or 40%, below the prior year reflecting the impact of Covid-19 in the various markets in which Mothercare‘s franchisees operate around the world.

“As a global brand the impact of Covid-19 has varied enormously by market as the countries in which our franchise partners operate have addressed the Covid-19 pandemic in many different ways including, but not limited to, restrictions on travel, movement, and operating hours of retailers,” the retailer said.

“These issues have been compounded by similar restrictions for our manufacturing partners, which coupled with the disruption to the global movement of freight, have caused additional challenges with availability of product for franchise partners further impacting sales for the year.”

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Chairman Clive Whiley added, despite the impact of the pandemic, Mothercare has ended the year in a far stronger position than it started.

“Our resilient performance and financial position bears out the robustness of the Mothercare business today, delivering what will be a positive if modest EBITDA result for the year. We enter FY22 as a conservatively financed, cash generative and profitable business.

“We expect 2022 to be a year of further progress and we can now focus upon developing our strategy and future plans to optimise the competencies and attributes of Mothercare over the next five years.  That is an exciting prospect for all of our staff and stakeholders as we hopefully exit this most uncertain of times.”

Mothercare expects to release preliminary results for the year to 27 March 2021 in late July.

The retailer said in January it expects to make a small EBITDA loss for the full year as it prepares to delist from the main market amid a shift to the AIM – a move it completed in March.