Mothercare profits slump as Covid bounce-back takes time, names new CEO
Mothercare had plenty to talk about on Thursday as it unveiled a new CEO and continued to focus on its turnaround, with the company also reporting lower sales and profits.
It named Daniel Le Vesconte as the group’s chief executive with the new senior leader joining at the start of next year.
The company said he “brings a wealth of international brand experience in direct-to-consumer, franchise, wholesale and licensing”, having held senior leadership roles for several globally recognised brands.
These include Abercrombie & Fitch, Hollister and Gilly Hicks for A&F Corp, Dr Martens, the Wolverine Worldwide group of brands and Vans and Reef for VF Corp.
Aside from that news, the company seemed satisfied with its unaudited half-year results for the 26-week period to 24 September, despite issues that deeply dented the figures.
International retail sales by franchise partners were £162.1 million, down from £184.3 million a year ago. But excluding the Russian business that Mothercare has exited, they rose 15% from £140.8 million.
Adjusted EBITDA fell to £3.2 million from £5.6 million, reflecting the loss of contribution from Russia for the whole of the current period, which was around £2.9 million for the equivalent period last year.
Group adjusted pre-tax profit from operations fell to £2.9 million from £5.2 million and reported pre-tax profit dropped to £0.8 million from £4 million.
On the plus side, net debt also fell to £11.6 million from £13.3 million a year ago, and the pension scheme deficit was materially reduced to £42 million from £124.6 million at the start of the pandemic.
Chairman Clive Whiley said: “Our results demonstrate the strong foundations and resilience we have created in the business over recent years. Furthermore, we have generated both profit and cash, despite the impact of Covid-19 and the war in Ukraine.
“Our immediate priority now remains to support our franchise partners as we together navigate out of this suppressed demand period, recover from supply chain disruptions and rebuild their store footfall whilst growing their digital sales. This inevitably means that a return to pre pandemic levels of trading is taking time, however this will ultimately benefit both our own business and our franchise partners' businesses in the longer term.”
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