Mothercare sales plunge 40% in FY21
The group still anticipates reporting a small EBITDA profit for the financial year, against the previous guidance of a small loss
Mothercare has revealed that sales in its unaudited full-year results are set to plunge 40% to £326m, reflecting the impact of the pandemic on the global markets in which its franchisees operate.
The group said the impact of Covid-19 has “varied enormously” by market as countries have addressed the pandemic in varying ways including their approach to restrictions on travel, movement and operating hours.
It added that these issues have been compounded by similar restrictions for its manufacturing partners, which coupled with disruption to global freight movement, have “caused additional challenges” with the availability of product for franchise partners, further impacting sales for the year.
Nonetheless, the group had a “significantly” reduced net debt of £12.1m at the year end, and it now anticipates reporting a small EBITDA profit for the financial year, against the previous guidance of a small loss.
It still warned that it is “not immune to the evolving Covid-19 impacts” on its franchisees’ operations country by country, adding that the global outlook still remains uncertain.
Over 80% of its franchise retail locations are now open, however, which “points towards recovery in their sales and consequently our revenues”. The group added that its directors believe that Mothercare remains on track to return to profitable trading levels in the short to medium term.
Clive Whiley, chairman of Mothercare, said: “Our performance in 2021 shows that whilst we are not immune to the impact of the pandemic on our franchise partners’ operations around the world, we have ended the year in a far stronger position than we started it.
“Our resilient performance and financial position bears out the robustness of the Mothercare business today, delivering what will be a positive if modest EBITDA result for the year. We enter FY22 as a conservatively financed, cash generative and profitable business.”
He added: “We expect 2022 to be a year of further progress and we can now focus upon developing our strategy and future plans to optimise the competencies and attributes of Mothercare over the next five years. That is an exciting prospect for all of our staff and stakeholders as we hopefully exit this most uncertain of times.”
