The release of these numbers marked a day to forget for Mothercare's (MTC) shares, which fell more than 15 per cent in early trading. There were two reasons. First, the international business continues to suffer, with constant-currency sales down 7.7 per cent overseas. That’s down to the Middle East and Russia, specifically a consumer spending squeeze across the former, and unseasonal weather across the latter.
But there’s no blaming weather for recent footfall trends in the UK, according to chief executive Mark Newton-Jones. He believes the current spate of promotional activity gripping the UK retail market ahead of the festive period is masking wider and deeper problems in consumer spending power. That said, Mr Newton-Jones insists that Mothercare’s domestic business is in far better shape than three years ago. Sales at home rose 2.5 per cent on a like-for-like basis during the first half, with online sales up 5.3 per cent and margins improving by 34 basis points, thanks to more efficient sourcing. Full-price sales were down year on year, but still strong at 60 per cent.
Analysts at JPMorgan have downgraded their forecasts for the year to March 2018. Analysts there now expect EPS to fall to 7.5p from a previous estimate of 9.5p (flat on FY2017).
| MOTHERCARE (MTC) | ||||
| ORD PRICE: | 70p | MARKET VALUE: | £120m | |
| TOUCH: | 69.5-70p | 12-MONTH HIGH: | 136p | LOW: 66p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 39p* | NET DEBT: | 57% | |
| Half-year to 7 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 348 | -0.8 | 0.2 | nil |
| 2017 | 340 | -16.8 | -8.5 | nil |
| % change | -2 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £61.8m, or 36p a share | ||||
