Mothercare (MTC) H1 2024 earnings summary

Executive summary

• International retail sales fell 15% year-over-year to £137.2m, mainly due to a 20% decline in the Middle East; excluding the Middle East, sales were down 6% at constant currency.

• Adjusted EBITDA rose 12% to £3.6m, reflecting tighter cost control; adjusted profit before tax from operations increased 17% to £3.4m.

• Net debt increased to £15.8m (from £11.6m a year ago), with ongoing efforts to address a £35m pension deficit.

• Online retail sales grew to £13.7m, now representing 10% of total retail sales, up from 8% last year.

Financial highlights

• Revenue for the period was £29.0m, down from £38.5m in H1 FY23.

• Adjusted EBITDA was £3.6m (H1 FY23: £3.2m); adjusted profit before tax was £1.8m (H1 FY23: £1.7m).

• Profit for the period was £1.7m, up from £0.4m in H1 FY23.

• Basic earnings per share were 0.3p (H1 FY23: 0.1p); no dividend declared.

• Net cash outflow from operating activities was £0.3m; cash and cash equivalents at period end were £4.2m.

Outlook and guidance

• Medium-term guidance for steady-state operations remains unchanged, targeting approximately £10m operating profit in more normal circumstances.

• Management does not expect current efforts to fully offset the impact of challenging trading conditions for the full year to March 2024 and beyond.

• Focus remains on restoring critical mass, monetising brand IP, and reducing pension contributions to support long-term development.