Full-year results from mum-and-baby chain Mothercare (MTC) illustrate how the retailer is trying to move its business online. Around 41 per cent of UK sales are now derived from the web, which has allowed for better margins and a return to underlying profit on home soil in the second half of the financial year. On the high street, around 70 per cent of the store estate has been refurbished - although this has pushed the group back into a net debt position. Internationally, currency tailwinds pushed sales up 10.6 per cent during the year, although difficulties in the Middle East meant like-for-like international sales actually fell 4.1 per cent.
All that said, it's likely the 3.5 per cent share price fall on results day largely reflected management's cautious tone regarding the consumer environment this year. Chief executive Mark Newton-Jones said no one could be "certain" about how British consumers would respond to the inflationary environment, but he remains confident that Mothercare is becoming more "relevant" to modern customers.
Analysts at Numis expect pre-tax profit of £21m for the year ending March 2018, giving EPS of 9.9p (from £19.7m and 9.3p in FY2017).
MOTHERCARE (MTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 124p | MARKET VALUE: | £212m | |
| TOUCH: | 124-124.8p | 12-MONTH HIGH: | 145p | LOW: 102p |
| DIVIDEND YIELD: | nil | PE RATIO: | 26 | |
| NET ASSET VALUE: | 48p* | NET DEBT: | 20% | |
| Year to 25 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 749 | -27.0 | -20.6 | nil |
| 2014 | 725 | -26.0 | -31.0 | nil |
| 2015 | 714 | -13.1 | -12.6 | nil |
| 2016 | 682 | 9.7 | 3.8 | nil |
| 2017 | 667 | 7.1 | 4.8 | nil |
| % change | -2 | -27 | +26 | - |
Ex-div: na Payment: na *Includes intangible assets of £63.4m, or 37p a share | ||||
