Mothercare (MTC) H1 2025 earnings summary

Executive summary

• Worldwide retail sales by franchise partners fell 12% year-over-year to £121.2m, mainly due to persistent challenges in Middle Eastern markets.

• Adjusted EBITDA dropped 53% to £1.7m, and adjusted profit from operations decreased 68% to £1.1m compared to H1 FY24.

• A new £30m joint venture with Reliance for South Asia and refinancing reduced secured debt facilities by 60% to £8m and annualised cash interest by over 75%.

• The Group is focused on restoring critical mass and leveraging the new joint venture for growth opportunities.

Financial highlights

• Revenue declined to £21.0m from £29.0m in H1 FY24.

• Adjusted loss before taxation was £1.4m, compared to a £1.8m profit in H1 FY24.

• Net debt increased to £17.1m from £15.8m a year earlier, but post-period refinancing reduced the term loan to £8.0m.

• Basic adjusted loss per share was (0.3)p, down from 0.3p in H1 FY24.

• No interim dividend declared.

Outlook and guidance

• The new South Asian joint venture is expected to drive growth and restore critical mass, though short-term caution remains due to Middle East challenges.

• Management expresses renewed confidence for 2025 and beyond, citing multiple growth opportunities.