Source: Sharecast
Updating on pre-close trading, the struggling mother and baby specialist said adjusted earnings before interest, tax, depreciation and amortisation were set to come in around £1.25m in the year to 29 March. In the previous year, adjusted EBITDA was £3.5m.
Unaudited worldwide retail sales by franchise partners slumped 22% during the period to £180m, while borrowings rose to £5.7m from £3.7m.
Mothercare said it had been hit by the end of its exclusive distribution with Boots, unfavourable foreign exchange rates and ongoing uncertainty in its Middle Eastern markets. The war in Iran, which started at the end of February, is estimated to have cost Mothercare £100,000 so far.
The group also stressed that excluding the Middle East and UK, annual total retail sales were positive on a like-for-like basis, while its financial position remained unchanged, following a recent successful refinancing of debt facilities.
However, chair Clive Whiley acknowledged: "Our results for last year reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East, where any longer-term impact on the supply chain remains unclear at this stage, and the underlying profitability and cash generation of our asset-light franchise system.
"Given the external factors influencing some of the company’s key operating markets, our immediate priority remains to support our franchise partners, ultimately for the benefit of our own underlying business, where the strength of the Mothercare brand endures."
As at 0945 BST, the AIM-listed stock had plunged 32% to 0.96p.
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