Mothercare PLC (LSE:MTC) has reported a slump in its first-half profits as the impact of COVID-19 and the war in Ukraine weighed on its trading performance which is likely to remain challenging, as it also unveiled a new boss.
The parent and young children products retailer saw its profit before tax fall to £800,000 in the six months to 24 September 2022 compared to £4mln for the same period last year.
International retail sales at its franchise operations, excluding Russia, however, jumped by 15% to £162.mln from £140.8mln a year earlier.
"Our results demonstrate the strong foundations and resilience we have created in the business over recent years. Furthermore, we have generated both profit and cash despite the impact of COVID-19 and the war in Ukraine,” Mothercare chairman Clive Whiley said in the results statement.
The company said trading is likely to remain challenging due to consumer sentiment and inflation, although it believes its wide range of products, improvements in what it sells, and a focus on value and demographics should provide “a degree of insulation in these uncertain times.”
The group said its priority now is to navigate out of the suppressed demand and recover from supply chain disruptions while simultaneously building footfall and online sales, although Whiley said “this inevitably means that a return to pre-pandemic levels of trading is taking time.”
Medium-term guidance of its franchise operations, in normal circumstances, is exceeding £10mln operating profit, the company said.
In a separate statement, Mothercare named Daniel Le Vesconte as its chief executive, with the new man joining the company's board in the new year.
“Dan’s extensive experience in the retail direct-to-consumer, wholesale and licensing sector will be a great asset to the team and me as we focus upon restoring critical mass and driving the Mothercare brand globally over the next five years,” said Whiley.