Mothercare has reported a surge in profits following its takeover of Early Learning Centre (ELC) delivered benefits beyond its expectations.
The company reported pretax profits of £42.2 million last year up from £4.5 million a year ago, which inlcuded costs relating to the integration of ELC. ELC specialises in toys and games designed to enhance children’s learning and creativity.
The group said underlying profits rose to £37.1 million, helped by like-for-like UK sales growth of 1.4 per cent despite a “challenging market”.
Mothercare said the integration of the Early Learning Centre (ELC), bought for £85 million in June 2007, was almost complete and had contributed to cost savings in the business.
A partnership with musician and presenter Myleene Klass for the Baby K range had been successful in the UK and internationally and Mothercare said the label is to be extended into its home and travel sectors.
The firm said its “In the Night Garden” home and travel products, produced in a licensing agreement with the BBC, were selling ahead of expectations.
Mothercare chief executive Ben Gordon said the “strong performance” meant a 20.8 per cent hike in the total dividend payment to shareholders.
The move comes a day after high street giant Marks & Spencer said it would cut its total dividend by a third.
Mr Gordon added: “Given the uncertain consumer environment, we are planning cautiously for 2009/10, however we are well placed as we enter the new financial year, benefiting from our growing international platform, resilient multi-channel UK business, strong cash flow and debt free balance sheet.”
He said the international franchise business had seen a record year, with profits up 47.9 per cent to £13.9 million in the 12 months to March 28th.
The division was said to be the “biggest single growth opportunity” for the group.
Mothercare now has 1,014 stores in 51 countries, with 609 of its outlets outside the UK. It has 17 outlets in the Republic.
Mothercare said the success of integration was due to the increased footfall each brand brings to the other.
PA/Reuters