Mothercare has turned a financial corner, reporting profits for the fiscal year ending 30 March 2024.
- The company’s adjusted EBITDA saw a 3% increase, reaching £6.9m.
- Total franchise partner sales faced a decline, particularly in the Middle East, dropping by 13%.
- Mothercare refinanced its debt facilities and entered a joint venture with Reliance Brands.
- The company aims to rebuild and expand through new opportunities despite past setbacks.
Mothercare has experienced a significant financial recovery, marking a notable shift from the previous year’s loss of £0.1m to achieve a profit of £3.3m for the 53 weeks to 30 March 2024. This recovery reflects the company’s efforts to stabilize and grow amidst challenging market conditions.
The company’s adjusted EBITDA increased by 3% to £6.9m, signaling a positive trajectory in operational profitability despite external economic pressures.
Worldwide retail sales by Mothercare’s franchise partners saw a decline, falling 13% to £280.8m. This downturn is largely attributed to ongoing economic challenges in the Middle Eastern markets, which have impacted sales performance significantly.
In an effort to bolster its financial standing, Mothercare announced the refinancing of its existing debt facilities. They secured an £8m facility with Gordon Brothers and raised £16m through a joint venture for South Asia in partnership with a subsidiary of Reliance Brands, entrenching Reliance Brands with a 51% stake in the joint venture company.
Mothercare envisions leveraging its new financial framework as a springboard for future growth opportunities. The company plans to foster connections with other businesses and develop branded product ranges and licensing, preparing to invest in the company’s future development. As articulated by Clive Whiley, chairman of Mothercare, the aim is to restore critical mass and achieve core objectives amidst the newly secured stability.
In the midst of these developments, Mothercare also temporarily suspended trading in its shares on the AIM market due to a missed deadline for its audited results, highlighting ongoing administrative challenges.
Mothercare navigates financial recovery and strategic partnerships to pursue future growth amid industry challenges.
