Mothercare says it is still feeing the impact of Covid-19 in its current financial year.
The nursery retailer turned brand, which now operates through a franchise model including through Boots in the UK market, says that its total retail sales came in at £136m in the first 21 weeks of its current financial year. That has generated earnings before interest, tax and one-off costs of about £4m. That, says Mothercare in today’s AGM statement and trading update, represents “a significant improvement over the adjusted EBITDA of £2.2m reported for the year to March 26 2021.
But the brand says that in more normal circumstances, its existing retail franchise operation should deliver annual operating profits of £15m. However, it says, “the group has continued to be impact by Covid-19 during this financial year”.
In July, Mothercare reported full-year pre-tax losses of £21.5m on turnover of £85.5m in the year to March 27. At the time it said it had made progress in transforming the group and was now looking for new sources of growth – which could include marketplaces. The products that it designs, develops and sources, it said at the time, were sold in more than 700 shops in 37 countries.
At the time, Clive Whiley, chairman of Mothercare, said “The past financial year has clearly been a challenging one, however, despite the backdrop of the pandemic, we have made a tremendous amount of progress in fundamentally transforming the group.
“We expect 2022 to be a year of further progress as we focus upon developing our strategy and future plans to optimise the Mothercare brand globally over the next five years. These are exciting times as, notwithstanding the continued impact of the pandemic in many of our franchise partners territories, without the distractions of the last three years we are seeking to accelerate the growth of the business and the Mothercare brand. We look to the future with great optimism having established a strong and efficient platform with multiple opportunities for growth."
While lockdowns are now lifted in the UK, they still affect markets around the world, including at present Australia and New Zealand. The FT has been tracking how lockdown restrictions have changed over time here.