Mothercare has issued a pre-close trading update for the financial year ended 26 March 2022, based on draft figures.
Unaudited net worldwide sales are £385 million for the year. The adjusted EBITDA of £11.5 million to £12 million, ahead of analysts’ expectations. Debt was also marginally reduced to £10.3 million and pension deficit materially reduced to £66 million from £142.6 million a year ago.
For FY23, Mothercare said it is cautiously confident, notwithstanding that it has completely excluded Russia from its forecasts due to uncertainty as to when stores will reopen. This is expected to impact results for the coming year by £6 million.
The brand has upgraded its clothing ranges and says is is now offering ‘great choice at a variety of price points, improved design, fashionability, quality and value’ to differentiate it from its international competitors’ offerings.
Clive Whiley, chairman of Mothercare, commented: “As expected, last year was one of further progress for Mothercare, generating free cash flow from operations as a focused, asset light global franchising business. Whilst we must now deal with the impacts of the suspension of our franchise partner’s operations in Russia, we retain the resilience to deal with this additional challenge satisfactorily.
“We continue to drive initiatives designed to maintain momentum in improving profitability particularly when we return to more normal pre-pandemic levels of business. The near halving of the pension deficit also offers the potential for material reductions in our recovery plan payments. This is a good backdrop against which to revisit our current financing arrangements and we are exploring all available alternative funding options to further improve our financial flexibility.”
