20th Oct 2025 12:04
(Alliance News) - Mothercare PLC on Monday said it has breached the liquidity financial covenant of its debt facility, and said the pension trustee has agreed to further defer pension contributions.
Mothercare is a Watford, England-based company specialising in clothes and other products for newborn babies and children.
Shares in Mothercare were down 18% at 2.62 pence in London on Monday morning.
In its annual results announcement last month, Mothercare said that the trustee of its pension fund agreed to defer the first six months' payments of pension contributions due in the financial year to March 2026 and that the company had requested a further deferral for the remainder of the financial year to support its cash flows.
On Monday, Mothercare confirmed that the trustee has agreed to extend the deferral to March 2026.
The total deferred contributions that would have been due in the year to March 2026 are worth GBP3.0 million.
This sum, alongside the remaining due contributions, will be paid in accordance with a new schedule of contributions.
Mothercare said the new schedule will be put in place by the end of March, and will include a resumption of contributions from April 19 "at a level that the trustee considers to be affordable".
The company also said it has breached the liquidity financial covenant of its GBP8 million debt facility, as forecast in its 2025 results announcement.
Mothercare noted that it continues to benefit from the support of its lender, and they continue to have "regular and positive" discussions. It confirmed that the lender has not said that it requires immediate repayment of the facility.
"Whilst during certain points of our working capital cycle we have not met the liquidity financial covenant, we continue to have sufficient cash to trade for the foreseeable future," the company added.
"The board of Mothercare is very grateful for this significant support that both the group's pension trustee and our lender have provided. This deferral and forebearance allows the company to focus on, evaluate and conclude the multiple ongoing strategic discussions with greater flexibility as we seek to restore critical mass, especially in the UK market. We also continue to explore other options to mitigate the pension scheme deficit."
By Michael Hennessey, Alliance News reporter
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