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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Mothercare plc    MTC   GB0009067447

MOTHERCARE PLC (MTC)
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Delayed Quote. Delayed  - 05/21 10:19:22 am
34.5 GBp   +7.81%
05/18MOTHERCARE : swings axe on 50 stores
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05/18MOTHERCARE : branch set to remain open
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05/18MOTHERCARE : Town's Mothercare store set to be closed
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Mothercare to shut a third of UK stores in battle for survival

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05/17/2018 | 04:58pm CEST
Branding is seen outside a Mothercare store in Altricham

LONDON (Reuters) - Struggling British mother and baby products retailer Mothercare will close over a third of its UK stores as part of a survival plan that also sees the return of the chief executive who was sacked just five weeks ago.

The firm's sales and profit have been hammered by intense competition from supermarket groups and online retailers in its main UK market as well as by rising costs, resulting in what it called on Thursday "a perilous financial condition."

It reported a loss before tax of 72.8 million pounds for the year to March 24, on group sales down 2 percent to 654.5 million pounds.

Mothercare's shares had lost 83 percent of their value over the last year but rose as much as 34 percent on Thursday after the firm detailed a 113.5 million pounds refinancing, including a planned 28 million pounds equity fundraising, and said Mark Newton-Jones would return as CEO.

Newton-Jones was ousted as CEO on April 4 by then chairman Alan Parker. Parker himself abruptly retired on April 19.

Newton-Jones' replacement as CEO David Wood, a former Tesco executive, will become group managing director.

Mothercare said it would seek creditor approval for so-called company voluntary arrangement (CVA) proposals that would enable it to shut 50 stores and secure rent reductions on 21 others. As many as 800 jobs could be lost.

The firm currently trades from 137 UK stores, having had nearly 400 a decade ago. The new plan would see it trade from 78 UK stores by 2020.

The CVA route, which allows firms to avoid insolvency or administration, has already been taken this year by fellow UK retail strugglers - fashion chain New Look, floor coverings group Carpetright and department store group House of Fraser.

Brutal trading conditions for store groups - with pressure on UK disposable incomes compounding intense competition - are also partly responsible for the collapse of Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality.

UNSUSTAINABLE SITUATION

Shares in Mothercare were up 5.4 pence at 25.4 pence at 1420 GMT, valuing the business at 46 million pounds.

"The recent financial performance of the business, impacted in particular by a large number of legacy loss making stores within the UK estate, has resulted in an unsustainable situation ... meaning the group was in clear need of an appropriate resolution," said interim executive chairman Clive Whiley.

Analysts at Peel Hunt said Mothercare's measures looked sufficient to get the UK business back to breakeven.

"The wider challenge is to complete the process of making Mothercare’s proposition more compelling, which will require a sharper view on pricing," they said.

In addition to the proposed equity issue, Mothercare has secured revised committed debt facilities of 67.5 million pounds, 8 million pounds of new shareholder loans and a new facility of up to 10 million pounds from a trade partner.

Creditor meetings to vote on the CVA proposals are expected on June 1, with the process projected to complete in July. The equity issue is conditional on the CVA going through.

Mothercare also trades from 1,131 stores overseas. It said international markets remained challenging, but it saw some recovery in the Middle East towards the end of its 2017-18 year.

(Editing by Keith Weir and Mark Potter)

By James Davey

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News from SeekingAlpha
2015MOTHERCARE : Turnaround Still In Delivery 
Financials ( GBP)
Sales 2018 643 M
EBIT 2018 5,40 M
Net income 2018 -12,0 M
Debt 2018 48,4 M
Yield 2018 -
P/E ratio 2018 -
P/E ratio 2019 18,82
EV / Sales 2018 0,15x
EV / Sales 2019 0,14x
Capitalization 45,3 M
Chart MOTHERCARE PLC
Duration : Period :
Mothercare plc Technical Analysis Chart | MTC | GB0009067447 | 4-Traders
Technical analysis trends MOTHERCARE PLC
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 4
Average target price 0,29  GBP
Spread / Average Target -10%
EPS Revisions
Managers
NameTitle
Mark Newton-Jones Chief Executive Officer
Clive Peter Whiley Executive Chairman
Glyn Hughes Chief Financial Officer & Executive Director
Michelle Barkess Director-Retail Operations
Richard Michael Rivers Senior Independent Non-Executive Director
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