Mothercare swings to massive loss in full-year

Group pre-tax losses reached £72.8m in the year to March 24, 2018, down from £7.1m pre-tax profits the year before.

Group adjusted pre-tax profits stood at £2.23m, down 88% from £19.7m.

Like-for-likes shrank 1.3% while total sales were down 4.8% to £437.6m.

Net debt swelled from £15.9m to £44.1m.

Mothercare has had a torrid year, which has included the launch of a company voluntary arrangement (CVA) and a profit warning.

The business hopes to swing the axe on more than a third of its 137 stores through a CVA, reduce rents at another 21 and execute a debt and equity refinancing.

The planned refinancing, aimed at raising £113.5m, will consist of £28m equity capital raising, the restructuring of its debt and receipt of £8m in new shareholder loans.

The retailer also revealed this morning that ex-chief executive Mark Newton-Jones would be re-joining the business.

Former chairman Alan Parker had ousted Newton-Jones in April, bringing in former Tesco and Walmart executive David Wood.

A few weeks later, Parker himself departed the business. Wood will move sideways to the role of international managing director.

Parker had accused Newton-Jones of not executing Mothercare’s transformation strategy fast enough.

Today, the business reaffirmed that it would continue to implement the same transformation plan, but added that it needed to be executed better and faster.

Wood said: “The business has modernised significantly over recent years, but we expect the changing dynamics and challenges in the retail sector to continue, so we need to move faster with the execution of our transformation plans.

“Towards the end of the year, and since, the business has been focused on restructuring our financing arrangements with lenders to ensure a robust capital structure for the group, which can support the Mothercare transformation, and this has been my absolute priority since coming on board.”