TIDMMTC
RNS Number : 1631B
Mothercare PLC
08 January 2018
MOTHERCARE PLC
FY18 trading update
-- UK like-for-like declilne impacted by lower footfall and spend,
both in stores and online, following the continuation of consumer
trends flagged in our half year results
-- International sales remain challenging, stabilising toward
the end of the period
-- Overall Group performance below expectations
-------------------------------------------------------------------
Mothercare plc, the leading global retailer for parents and
young children, today issues the following trading update, which
covers the 12 week period to 30(th) December 2017.
UK
-- UK like-for-like sales decline of 7.2%.
-- Online sales decline of 6.9%. Online sales now represent c42% of total UK sales.
-- Total UK sales lower than last year, reflecting ongoing store closure programme.
-- Retail space at the end of the period reduced to 1.4m sq.ft,
as planned, with 143 stores (139 Mothercare and four ELC).
-- Lower gross margins due to higher discounting, but positive
sell through of stock and cash generation.
International
-- International retail sales were down 3.0% in constant
currency and down 6.8% in actual currency, but key markets showing
signs of improvement towards the end of the period.
-- Online sales growth of 8.5% in constant currency and 7.4% in actual currency.
-- Retail space at the end of the period c2.9m sq.ft with 1,131 stores.
Group performance for 12 weeks to December 30(th) 2017
FY2017 FY2018 30 December 2017
Q3 Q4 Q1 Q2 % change year-on-year
----------------------------- ------ ------- ------ ------ ------------------------
UK 12 Weeks: YTD:
UK like-for-like
sales (1) 1.0 4.5 1.9 3.2 (7.2) (0.9)
Online Sales (1) 5.5 13.6 3.3 7.3 (6.9) 0.9
Total UK sales 0.6 3.2 (1.8) (0.2) (11.0) (4.5)
UK space (change
in sq.ft.) (4.5) (5.9) (7.2) (9.2) (6.0) (6.0)
International
International retail
sales in constant
currencies (1) (5.9) (1.7) (8.3) (7.1) (3.0) (6.3)
International retail
sales in actual currencies
(1) 13.2 15.4 2.2 (6.0) (6.8) (3.3)
International space
(change in sq.ft.) 0.0 0.9 (2.3) (3.0) (3.6) (3.6)
Group
Worldwide sales (2) 7.5 10.7 0.8 (3.8) (8.2) (3.6)
Total group sales
(3) 1.8 (12.2) (0.0) (4.9) (2.4) (2.4)
----------------------------- ------ ------- ------ ------ -------------- --------
Mark Newton-Jones, Chief Executive Officer of Mothercare plc,
said:
"As we signalled in November, there has been a softening in the
UK market with lower footfall and website traffic resulting in
lower spend in both stores and online. This trend has continued,
resulting in our UK LFL of (7.2)% in the 12 weeks to 30(th)
December.
International trade was challenging in the quarter overall, but
we have seen a return to moderate growth in the Middle East over
the last seven weeks. Whilst this is positive news, it is too early
to say whether or not this is the beginning of a more sustained
up-turn in sales across the region. In Russia, our largest
international country by turnover, we also saw a return to growth
as the weather became colder, leading to improved trading.
In our UK business, we took a conscious decision to remain at
full price to protect our brand positioning prior to Christmas but
to then discount more heavily in the end of season sale. We have
subsequently seen good progress with strong sell through rates on
Autumn Winter clearance lines albeit these carry lower margins and
will lead to a further reduction in full year margin as a result.
Group cash generation and inventory positions are both strong.
In line with previous announcements and as part of our
transformation strategy, we have taken decisive action to reduce
our central cost base. The planned financial benefits of this will
materialise in the next financial year. We continue to adopt a
disciplined approach to cash management with a particular focus on
controlling stock levels, together with stringent controls over
capital expenditure.
Taking this approach into account we expect net debt at year-end
of approximately GBP(50)m, and at this level we have sufficient
liquidity and covenant headroom within our existing facilities.
Going forward, we are not anticipating any improvement in the
short-term market conditions for the UK and on this basis the
adjusted group profit for the year is likely to be in the range of
GBP1-5m. Whilst the performance of the business has been
challenging in the last few months, we remain singularly focussed
on transforming Mothercare to be the leading global retailer for
parents and young children."
Investor and Analyst enquiries to:
Mothercare plc
Mark Newton-Jones, Chief Executive Officer 01923 206037
Glyn Hughes, Chief Financial Officer 01923 206037
Media enquiries to:
MHP Communications:
Simon Hockridge / Tim Rowntree 020 3128 8789
Notes:
1 - UK like-for-like sales are defined as sales from stores that
have been trading continuously from the same selling space for at
least a year and include online sales. UK online sales include both
website sales and sales taken on iPads in store. International
retail sales, including online sales, are the estimated retail
sales of overseas franchisees and joint ventures and associates to
their customers. International like-for-like sales are the
estimated franchisee retail sales from stores that have been
trading continuously from the same selling space for at least a
year. International sales in constant currency exclude the impact
of movements in foreign exchange on translation.
2 - Worldwide sales are total International sales plus total UK
sales. Total International sales are International retail sales
plus International Wholesale sales.
3 - Total group sales is a statutory number and is made up of
total UK sales and receipts from our International partners, which
includes royalty payments and the cost of goods dispatched to our
franchise partners.
4 - This announcement contains inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014.
5 - This announcement contains certain forward-looking
statements concerning the company. Although the Board believes its
expectations are based on reasonable assumptions, the matters to
which such statements refer may be influenced by factors that could
cause actual outcomes and results to be materially different. The
forward-looking statements speak only as at the date of this
document and the company does not undertake any obligation to
announce any revisions to such statements, except as required by
law or by any appropriate regulatory authority.
6 - The Q3 trading announcement was scheduled to be released on
the 11(th) January 2018 covering the 13 week period up to 6th
January 2018. This early announcement covers the 12 week period to
30th December 2017.
7 - We will be announcing our preliminary results for the
2017/18 financial year on 17(th) May 2018.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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