Mothercare PLC (LON:MTC) is continuing with its turnaround plans despite taking hits from the coronavirus outbreak.
The pregnancy and baby products seller had closed its UK outlets in November as part of a last-ditch rescue plan to focus on overseas operations, though 430 staff have been working at Boots.
READ: Mothercare CEO departs after closure of UK stores
The firm said it is still incurring “incremental operating costs” despite governmental support to pay employees’ wages and tax relief.
However, closing shops last year allowed the company to gain “invaluable” experience in controlling supply shock, which is helping to limit damage now.
The retailer has reduced debt to £18.5mln from £24mln at the time of administration of UK shops in November.
It also decided to postpone a £20mln share placing to provide capital agreed with Numis Securities.
“The board has determined for the time being that it will be in the better interests of stakeholders to pursue additional debt facilities for its reduced finance requirements rather than pursuing an equity solution at this time,” Mothercare commented.
"Maybe not for the faint-hearted investor, but Mothercare has been navigating very choppy waters for some time, so positioning it well from a cultural perspective for the present times," analysts at Shore Capital said, keeping the 'buy' recommendation.
Shares rose 1% to 4.81p on Monday at the opening bell.
--Adds analyst's comment--