Source: Sharecast
The AIM-listed business posted a slump in annual sales and earnings last month, and warned that profits in the new year had been hit by uncertainty in the Middle East as well as the winding down of a sales arrangement with Boots in the UK.
At the time, Mothercare said it was "accelerating efforts to return the brand to growth and scale".
As part of its turnaround plans, the chain has already opted to defer pension contributions due in the first six months of the current year, to support cash flows. But it has since sought approval to defer contributions for a further six months, to March 2026, and on Monday confirmed that the scheme’s trustee had approved its request.
The total contributions that will be deferred during the year total £3m.
Mothercare said: "This sum, together with the remaining contributions due, will be paid in accordance with a new schedule of contributions, to be put in place no later than 31 March 2026."
Contributions are currently expected to resume from 19 April 2026.
Mothercare also confirmed that, as expected, it had breached the liquidity financial covenant of its £8m debt facility. It means the facility is now repayable on demand.
However, Mothercare said the lender remains supportive. "We continue to have regular and positive discussions with them. Our lender has not indicated that the require immediate repayment.
"While 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 chain concluded: "The board is very grateful for this significant support that both the group’s pension trustee and our lender provider.
"This deferral and forbearance 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."
As at 1115 BST, shares in Mothercare had tumbled nearly 13% at 2.8p. The stock has now lost 35% in the year to date.
