Core Viewpoint - Mothercare plc is experiencing significant challenges due to ongoing uncertainties in the Middle East, impacting its franchise partners and overall financial performance, with a notable decline in retail sales and adjusted EBITDA for FY25 compared to the previous year [2][4][12]. Financial Performance - Adjusted EBITDA for FY25 is expected to be approximately £3.5 million, a decrease from £6.9 million for the period to March 2024, primarily due to the impact of Middle Eastern market conditions [4][12]. - Unaudited net worldwide retail sales by franchise partners were £231 million, down from £281 million in the previous financial year, reflecting an 18% decline [5][12]. - The decline in sales is largely attributed to the Middle East and the UK, where the company is ending its exclusive distribution relationship with Boots at the end of 2025 [5][12]. Market Conditions - The underlying strength of the business is indicated by positive like-for-like retail sales outside the UK, despite global economic uncertainties [6]. - Many franchise partners are still clearing inventory due to suppressed demand during Covid-19, which is expected to continue affecting results into FY26 [7]. Pension and Financing - Annual contributions for the Staff Scheme for the year to March 2026 are set at £3 million, with the first six months' payments deferred to support cash flows while exploring growth opportunities [8]. - At year-end, the company had total cash of £4.4 million, down from £5.0 million in March 2024, and net borrowings reduced to £3.7 million from £14.7 million [10][12]. Strategic Outlook - The company is focused on supporting franchise partners and exploring growth opportunities through partnerships and product development [13][14]. - Discussions with potential strategic partners are ongoing, indicating interest in the brand despite current market challenges [14].
Pre-Close Trading Update