REG-Pre-Close Trading Update

MothercareAnnouncement

Thu 07:00

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Mothercare plc

Pre-close trading update

Mothercare plc ("Mothercare" or "the Company"), the leading specialist global
brand for parents and young children, today issues a pre-close trading update
for the 52 week period to 29 March 2025 (“FY25”). Comparatives are based
on the 53 week period to 30 March 2024. This update is based upon draft
figures pending finalisation of the year end audit.

Highlights
* Unaudited worldwide retail sales by franchise partners of £231 million for
the year, representing a decline of 18% on last year (14% down at constant
currency on a 52 week period to March 2024), with the decline largely
resulting from the unchanged trading conditions in our Middle Eastern markets.

* Adjusted EBITDA for FY25 at approximately £3.5 million, in line with market
expectations.
* Net borrowings of £3.7 million at the year end (March 2024: £14.7 million)
), significantly reduced as a result of the recently announced India joint
venture and refinancing.
* Pension scheme deficit remains at £35 million (March 2024: £35 million) on
a technical provisions basis.
EBITDA before adjusting items, for the financial year to 29 March 2025, is now
expected to be approximately £3.5 million, compared to the £6.9 million
adjusted EBITDA for the period to March 2024. This has been largely driven by
the continuing impact of the uncertainty in the Middle East on our franchise
partners’ operations. Our franchise partner has reduced the store numbers of
many of its brands and specifically for Mothercare our store numbers across
the year have reduced by 47 to 77 stores at March 2025.

Unaudited net worldwide retail sales by franchise partners were £231 million,
compared to £281 million for the previous financial year. The majority of the
reduction is the Middle East and to a lesser extent the UK as we are ending
our exclusive distribution relationship with Boots at the end of 2025, as we
believe there is a greater opportunity for the brand and a new partner in the
UK.

The underlying strength of the business is demonstrated by the fact that
excluding the UK, on a like for like basis our total retail sales were
positive for the full year to March 2025, despite the prevailing global
economic uncertainties.

As previously reported, in addition to the global economic uncertainties which
are impacting our retail sales, in many of our territories our partners are
still clearing inventory due to the suppressed demand during Covid-19. Whilst
there are signs of this process concluding in some territories, we expect
these factors will continue to impact the Group results in FY26.

Pension Schemes

The annual contributions agreed for the Staff Scheme in the year to March 2026
was £3 million, due in monthly payments. However, in order to support the
Company’s cash flows whilst it is exploring growth opportunities, the
trustees have agreed to defer the first six months’ payments with a revised
schedule of contributions to be agreed by 30 September 2025.

We have had the mutual benefit of a close and supportive relationship with the
trustees over recent years and remain in regular and open contact with them.

Financing

At the year-end Mothercare had total cash of £4.4 million (March 2024: £5.0
million), against the £8.0 million (March 2024: £19.7 million) of the
Group’s revised loan facility, which remained fully drawn across the year.

The present levels of retail sales, particularly in our Middle Eastern
markets, highlighted above, means the Board’s current forecasts for
continuing operations show the Group requiring waivers to our covenant tests.
We continue to have regular and positive discussions with our lender, who are
aware of our forecasts. For the avoidance of doubt the Group does not require
additional liquidity.

Clive Whiley, Chairman of Mothercare, commented:

“Our results for last year reflect the impact of the continuing uncertainty
on our franchise partners’ operations in the Middle East. However, the
de-leveraged business resulting from the recent India joint venture and
refinancing, together with the ongoing support of our lender and pension
trustees, is enabling us to continue to explore the full bandwidth of growth
opportunities through connections with other businesses, the development of
our branded product ranges and licensing within and beyond our existing
perimeters.

Given the factors influencing some of the Company’s operating markets, our
immediate priority remains to support our franchise partners, ultimately for
the benefit of our own business. In that context we remain in discussions with
several parties to restore critical mass alongside delivering our remaining
core objectives. The underlying business has continually proved its resilience
and the strength of the brand is evident from the interest it generates and
the resultant discussions with potential strategic partners we are having.

I would like to thank all of our colleagues for their efforts in difficult
circumstances and the board remains determined to optimise the brand IP for
the benefit of all stakeholders.“

Investor and analyst enquiries to:

Mothercare plc            
                                                Email: investorrelations@mothercare.com
Clive Whiley, Chairman
Andrew Cook, Chief Financial
Officer                                     
               
                                          
Deutsche
Numis                                                          
 Tel: 020 7260 1000
(NOMAD & Joint Corporate Broker)         
Luke Bordewich
Henry Slater

Cavendish Capital Markets
Limited                   Tel: 020 7220 0500
(Joint Corporate
Broker)                                  
Carl Holmes

Media enquiries to:
MHP                                                                                
       Email: mothercare@mhpc.com
Rachel
Farrington                                                             Tel: 07801
894577
Tim Rowntree