Mark Newton-Jones has just celebrated his one-year anniversary as the boss of Mothercare (MTC). It has been a tumultuous period, including a rights issue, a management reshuffle and a hostile takeover bid from US rival Destination Maternity. But the hard work is now paying off: last year reported losses halved and underlying pre-tax profit (excluding restructuring and other one-off costs) rose 37 per cent to £13m.
This was largely thanks to better like-for-like sales - both in the UK and abroad - and stable gross margins. Management's decision to pull the plug on 31 lossmaking stores helped, and explains the slight dip in group sales. A refurbishment programme on those that remain is now under way. Mr Newton-Jones admitted some stores haven't had "so much as a lick of paint in nearly a decade". They should now get a facelift every five to seven years.
Mr Newton-Jones is also keen to expand the international business. This now account for 64 per cent of the group's retail space and 62 per cent of sales. Four new stores just opened in South Korea, where management wants a total of 10 outlets by September.
Analysts at broker Numis Securities expect pre-tax profit of £20m this year, giving EPS of 9.4p, up from £13m and 8.3p, respectively, in 2015.
| MOTHERCARE (MTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 238p | MARKET VALUE: | £406m | |
| TOUCH: | 237-239p | 12-MONTH HIGH: | 241p | LOW: 108p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 46p* | NET CASH: | £31.5m | |
| Year to 28 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011** | 794 | 9 | 5.8 | 14.0 |
| 2012** | 813 | -103 | -80.3 | 1.5 |
| 2013** | 749 | -27 | -20.6 | nil |
| 2014 | 725 | -26 | -31.0 | nil |
| 2015 | 714 | -13 | -12.6 | nil |
| % change | -2 | +50 | +59 | - |
Ex-div: na Payment: na *Includes intangible assets of £45.9m, or 27p a share **Figures adjusted for October 2014 rights issue (nine for 10 at 125p) | ||||
