Mothercare (MTC) H2 2024 earnings summary

Executive summary

• Achieved adjusted EBITDA of £6.9m (2023: £6.7m) despite a 13% decline in worldwide retail sales to £280.8m, mainly due to Middle East challenges and currency impacts.

• Completed a £30m joint venture with Reliance Brands for South Asia, receiving £16m gross and reducing net borrowings to £14.7m (2023: £12.4m).

• Refinanced debt, lowering interest costs from 13%+SONIA to 4.8%+SONIA, improving financial flexibility.

• Net profit for the year was £3.3m (2023: £0.1m loss), with adjusted profit at £3.5m (2023: £11m).

Financial highlights

• Revenue: £56.2m (2023: £73.1m); cost of sales: £36.6m (2023: £52.2m); gross profit: £19.6m (2023: £20.9m).

• Adjusted EBITDA: £6.9m (2023: £6.7m); profit from operations: £6.7m (2023: £6.0m).

• Net borrowings: £14.7m (2023: £12.4m); cash at year-end: £5.0m (2023: £7.1m).

• Basic EPS: 0.6p (2023: (0.0)p); adjusted EPS: 0.6p (2023: 0.2p).

• Pension deficit: £24.2m (2023: £8.4m surplus); actuarial loss of £33.8m recognized.

Outlook and guidance

• Focus on restoring critical mass, expanding into new territories, and leveraging the South Asia JV for growth.

• Ongoing cautious short-term outlook due to Middle East geopolitical and economic uncertainties.

• Intention to resume dividend payments when financially prudent.