Mothercare plc Preliminary Results
Mothercare announce major UK property restructure and rapid International growth
Mothercare has said it will close more than a quarter of its UK stores over the next two years as part of its plans to reduce its High Street presence.
Reshaping the UK
Rightsizing the store portfolio - announcing plans to transform the in-town estate within two years:
Circa 110 in-town store closures plus 40 rent reductions by March 2013, benefiting from 120 in-town lease expiries (90 in 2011/12; 30 in 2012/13);
Reducing occupancy costs by circa £18m and benefiting UK profit by at least £4m-£5m per annum from March 2013.
Driving multi-channel - new ELC website launched. New Mothercare website planned for 2012.
Mobile sites launched for both brands
Developing Wholesale - launched clothing partnership with Boots; Wholesale sales up 350.0% to £21.6m
Reducing costs - programme underway to save a further £5m per annum
Mothercare plc announces preliminary results for the 52 weeks ended 26 March 2011.
Financial Results
Group sales £793.6m, up 3.6% (2010: £766.4m)
Group network sales(1) £1,158m, up 7.1% (2010: £1,081m)
Net cash at year end £15.3m (2010: £38.5m)
Increased committed bank facilities from £40m to £80m on improved terms
Total dividend 18.3p, up 8.9% (2010: 16.8p)
Group underlying profit before tax(1) £28.5m, down 23.4% (2010: £37.2m)
Growing International
Another strong year with Total International sales(1) up 16.3% to £570.9m
166 new International stores taking the total overseas to 894 in 54 countries
Asia-Pacific sales up 47.0% with rapid growth in our three JVs - Australia, China and India
Announcing today plans to enter Latin America in 2011 with franchise stores in Colombia and Panama
Rollout of overseas e-commerce websites commenced
Ben Gordon, Chief Executive, said: "Over the last three years we have been reshaping the UK business for a changing retail landscape by downsizing the in-town property portfolio and growing Direct and Wholesale. Today we are announcing plans to accelerate our UK property strategy and transform the store portfolio over the next two years, benefiting from the unique position of having over 40% of our high street leases expiring by March 2013. This will substantially reduce our exposure to the UK high street, further reduce operational leverage and allow us to focus on out-of-town Parenting Centres, Direct and our new Wholesale business.
"International has had another record year with total International sales up 16.3% and the business continues to go from strength to strength. We are on track to meet the International growth targets set out in December and we are announcing today plans to enter Latin America for the first time later this year.
"In the new financial year, we expect International to continue to grow retail sales at 15-20% with 150 new store openings. We expect the environment to remain challenging in the UK, although we will benefit from continued growth in Wholesale and Direct together with the acceleration of our property strategy. Given the group's strong underlying operating cashflow, particularly from International, we are proposing a full year dividend of 18.3p, an increase of 8.9%."
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