LONDON (Alliance News) - Mothercare PLC shares surged Thursday after the mother and baby products retailer said that, while results in its recent financial year were hit by foreign exchange movements, it continued to stem the rate of decline in UK sales and saw sales increases internationally.
The group said its pretax loss for the year ended March 29 widened to GBP26.2 million from GBP23.9 million reported a year earlier, due to adverse currency movements in the year which wiped GBP21.8 million off its profit in the period, compared with a GBP6.9 million foreign-exchange gain the prior year.
On an underlying basis, which strips out exceptional costs and non-underlying items, the group recorded a 61% jump in its pretax profit to GBP9.5 million, up from GBP5.9 million a year earlier.
Although total group sales for the year were down 2.6% at GBP724 million, compared with GBP744.1 million last year, it was a marked improvement from the 6% decline in group sales Mothercare reported a year earlier, as it managed to slow the rate of falling sales in the UK.
Worldwide network sales, which includes total international sales plus total UK sales, saw a marginally growth of 0.5% to GBP1.19 billion.
Mothercare has been struggling in the UK for several years as a result of the economic downturn and due to increased competition from online competitors.
In response to the downturn, the retailer continued to streamline its UK retail operations by closing loss-making stores in the UK, but expanding internationally. During the year, the group closed 35 net UK loss-making stores and grew its international footprint by 13%. It said its international partners now operate from 59 countries with 1,221 stores.
Internationally, retail sales rose 6.4% in the year to GBP729.2 million, while like-for-like sales growth slowed to 2.5%, from 5.6% the prior year.
Mothercare has also been developing its multi-channel presence, with online sales now accounting for 29% of total UK sales and a third of online orders collected in store.
The group also said that it has now amended the banking facilities with the continued support of its two existing banks, increasing its committed facilities to GBP100 million, which it said will then reduce to GBP90 million from October 10.
Mothercare shares were trading at 161.42 pence at midday Thursday, up 16%