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Mothercare PLC on Friday reported higher interim profit as cost of sales declined faster than revenue.
The Hemel Hempstead, England-based operator of a retail franchise focused on parents and young children said in the 26 weeks to September 23, pretax profit jumped to £2.0 million from £800,000 a year ago. This came despite topline pressure.
International retail sales by franchise partners fell 15% on-year to £137.2 million, from £162.1 million a year before.
It reflects difficult trading conditions in the Middle East, the firm explained. Its revenue declined 25% to £29.0 million from £38.5 million, having seen a steady fall from £41.7 million and £44.4 million two and three prior half-years respectively.
Mothercare’s cost of sales meanwhile decreased by 30% to £19.0 million from £27.5 million, while administrative expenses narrowed 21% to £6.4 million from £8.1 million.
‘We are continuing with our efforts to refinance the group and remain in discussions with key stakeholders and financing partners to ensure that the group has adequate and appropriate financing for the future,’ said Chair Clive Wiley.
Looking ahead, he said: ‘We remain focused on restoring critical mass and monetising the Mothercare global brand IP to further free up cashflow, in addition to the significant reduction in pension contributions, to invest in the long-term corporate development of the group.’
The company declared no dividend, unchanged from a year ago.
Mothercare shares rose 4.3% to 4.90 pence each on Friday morning in London.
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