Mothercare cemented its global credentials with its latest half-year results. Operating from 840 stores in 53 countries, international sales climbed 17.3 per cent to £293m, overtaking UK retail sales for the first time and delivering the lion's share of underlying pre-tax profits of £12.2m, up 22 per cent year on year.
After opening 112 new overseas stores in the period, the group has upped its full-year target from 100 to 150 openings, and chief executive Ben Gordon said that the annual rate of international expansion would stay at that level "for the foreseeable future". While most overseas stores are operated by franchisees, the business has also taken equity stakes in its fastest-growing markets, adding a 25 per cent stake in Australian partner Headline to add to 30 per cent shareholdings in its Chinese and Indian ventures.
However, the strength of the international business was offset by continuing weakness in the UK, where like-for-like retail sales fell 3.8 per cent. That's partly the result of the shift from high street stores to larger out-of-town locations, but Mr Gordon said the economic environment remained challenging. UK gross margin also slipped as a result of higher input costs and promotional activity.
Broker Numis Securities expects full-year pre-tax profits of £39.8m and EPS of 32.9p (from £37.2m and 30.8p in the year to March 2010).
MOTHERCARE (MTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 519p | MARKET VALUE: | £457m | |
| TOUCH: | 518-519p | 12-MONTH HIGH: | 694p | LOW: 490p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 195p* | NET DEBT: | 5% | |
| Half-year to 9 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 387 | -7.1 | -5.9 | 5.5 |
| 2010 | 397 | 0.3 | 0.5 | 6.4 |
| % change | +3 | - | - | +16 |
Ex-div: 5 Jan Payment: 4 Feb *Includes intangible assets of £108m, or 123p a share | ||||
