Mothercare has seen a significant rise in profits for the fiscal year ending 30 March 2024, marking a turnaround from previous losses.
- Adjusted EBITDA increased by 3% year on year, reaching £6.9 million, signalling operational improvements despite a decline in retail sales.
- Global sales through franchise partners decreased by 13% to £280.8 million, primarily due to challenges in the Middle Eastern market.
- The company’s refinancing initiative, including an £8 million debt facility and a £16 million joint venture with Reliance Brands in South Asia, aims to stabilise future growth.
- Mothercare’s strategic plans focus on leveraging new opportunities through growth in India and enhancing branded product ranges.
Mothercare has reported a noteworthy financial turnaround for the 53 weeks to 30 March 2024, achieving a profit of £3.3 million compared to a £0.1 million loss in 2023. This demonstrates a significant recovery in financial performance, reflecting the company’s strategic efforts to overcome past challenges.
The company’s adjusted EBITDA rose by 3% year on year to £6.9 million, highlighting improvements in operational efficiency. This financial uplift occurred despite a drop in international retail sales by 13%, attributed mainly to persistent difficulties in the Middle Eastern markets.
Mothercare’s global retail sales experienced a setback with a decline to £280.8 million. However, the company remains optimistic about its strategic direction and the potential growth from new markets. The decline in turnover, by 23% to £56.2 million, is a concern that the company aims to address through its strategic initiatives.
In response to these challenges, Mothercare announced a refinancing of its existing debt facilities, securing £8 million in debt facilities from Gordon Brothers. Additionally, a £16 million joint venture in South Asia with a subsidiary of Reliance Brands is poised to open new avenues for growth, with Reliance holding a 51% stake in the venture.
Clive Whiley, Chairman of Mothercare, expressed optimism about the company’s future, stating that the goal is to restore critical mass and achieve core objectives. The expectation is that this strategic focus will enhance partner relations, stakeholder value, and ultimately leave behind the difficulties of recent years.
Mothercare’s strategic financial manoeuvres and partnerships signal a promising forward trajectory despite prevailing market challenges.
