Mothercare makes progress on returning UK operation to profitability

Shares in Mothercare were up more than 4% as it flagged significant progress towards returning its UK operation to profitability.

The group booked a full-year underlying pre-tax profit of £19.6 million, up 50.8% from the prior year's profit of £13.9 million. There was no dividend.

At the group level, worldwide sales weighed in at £1.15 billion, from £1.20 billion a year earlier. Total group sales were £682.3 million, from £713.9 million.

"The results highlight the significant progress we are making towards returning the UK to profitability," said chief executive Mark Newton-Jones, also pointing to continued challenging conditions in the international business.

Total UK sales improved to £459.7 million, from £458.1 million, with UK like-for-like (LFL) sales ahead 3.6%, versus a rise of 2.0% a year ago.

International total sales slipped to £689.7 million, from £745.4 million, with international LFL sales contracting 4.5%, against a rise of 5.6% in the comparative 12-month period.

"The issues are primarily at a macro level, with economic and currency headwinds persisting. Whilst we recognise these pressures, we believe that we can also make some improvements in how we operate," said Newton-Jones in a statement.

"We are exiting underperforming stores whilst continuing to grow space where there is potential for long term growth.

"We are also taking the lessons learned from our success in the UK and exporting them to our International markets. This is strengthening our International operations and improving the management of our brand globally."