Mothercare posts first-half loss

Mother and baby products retailer Mothercare slumped to a first-half loss and cut its dividend as dire UK trading eclipsed strong growth overseas.

The firm, which last month parted company with chief executive Ben Gordon after a third profit warning this year wiped out over a third of the company's stock market value, said today it was launching a structural and operational review of its UK business.

Mothercare made an underlying pretax loss of £4.4 million in the 28 weeks to October 8th, compared with a profit of £12.2 million in the same period last year.

After booking exceptional charges of £78.5 million relating to the restructuring of the UK business, the company made a pretax loss of £81.4 million.

The first-half performance reflected a near 10 percent second-quarter sales slump at UK stores open more than a year, as trading deteriorated after the August riots, particularly in bigger-ticket items such as push chairs and car seats.

Mothercare is battling intense competition in the UK from supermarkets and Internet players, as well as consumer uncertainty in the face of tough macro-economic headwinds.

Total first-half group sales rose 4.0 per cent to £412.9 million. UK sales fell 4.3 per cent, while international rose 15.7 per cent.

Mothercare is trying to restructure its business in Britain and in May it detailed plans to close about 110 UK stores over two years as leases expire.

The firm cut its interim dividend to 2.0 pence from 6.4 pence last time.

Reuters