19th Nov 2015 09:01
LONDON (Alliance News) - Mothercare PLC said its pretax profit edged higher in the first half of its financial year, driven by margin improvements in the UK, though international sales continued to suffer amid tough market conditions and currency headwinds.
The retailer, which sells products for parents and young children, said its pretax profit for the 28 weeks to October 10 edged up to GBP5.8 million from GBP5.5 million a year earlier, despite revenue falling to GBP349.9 million from GBP372.7 million.
The fall in sales was driven by a weak performance in the group's international business, where total sales declined by 5.2% and like-for-like sales by 2.3%. Mothercare said the international business was hurt by challenging economic conditions, plus adverse currency translation effects.
UK like-for-like sales improved, however, up 3.8% from 1.5% growth a year earlier, while total sales in the UK edged up by 0.4%. The group also managed to deliver a 76 basis point improvement in margins, with online sales rising and underlying losses for the UK business halving in the period.
Mothercare's underlying loss in the UK, where it now has 173 stores, narrowed to GBP6.1 million from GBP13.5 million a year before.
As the group invests in turning around the business, it said it will not pay an interim dividend for this year, the same as the prior year. Mothercare is investing heavily in its online business and in refurbishing its stores, as it works to improve margins and run a leaner, more efficient business. It said online sales were up 22% in the UK, accounting for 36% of UK retail sales.
"We are a year into our turnaround; making good progress against each of our strategic pillars and as a result underlying profits for the first half have more than doubled," said Chief Executive Mark Newton-Jones.
"Overall, expectations for the full year outturn are unchanged. Our vision remains clear: to be the leading global retailer for parents and young children," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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