REG - Mothercare PLC - Interim results announcement
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RNS Number : 5624M Mothercare PLC 23 December 2025
Mothercare plc
Interim results announcement
Mothercare plc ("Mothercare" "the Company" or "the Group"), the highly trusted
British heritage international brand and franchise operator, that connects
with the parents of newborn babies and children across multiple product
categories, today announces unaudited half year results for the 26-week period
to 27 September 2025 ("H1 FY26"). The comparative period was a 26-week period
to 28 September 2024 ("H1 FY25").
Key Highlights
· Worldwide retail sales by franchise partners of £90.7 million
(2024: £121.2 million), a decrease of 25% on last year (22% down at constant
currency), with the decline largely resulting from the store closures in our
Middle Eastern markets and the planned exit from Boots. On a like-for-like
basis retail sales are down 6% on last year.
· Adjusted EBITDA of £0.8 million (H1 FY25: £1.7 million).
· Group adjusted loss from operations of £0.5 million (H1 FY25: £1.1
million profit).
· Group adjusted loss before taxation of £1.1 million (H1 FY25: £1.4
million).
· Net debt decreased to £5.8 million (£17.1 million at 28 September
2024).
Our Group
26 weeks to 26 weeks to 26 weeks to 26 weeks to
27 Sep 2025 28 Sep 2024 23 Sep 2023 24 Sep 2022
Turnover £m 11.6 21.0 29.0 38.5
Adjusted EBITDA(2 ) £m 0.8 1.7 3.6 3.2
Adjusted (loss)/profit from operations (2 ) £m (0.5) 1.1 3.4 2.9
Adjusted (loss)/profit before taxation(2 ) £m (1.1) (1.4) 1.8 1.7
(Loss)/profit for the period £m (1.7) (1.8) 1.7 0.4
Adjusted basic (loss)/earnings per share(2 ) (0.3)p (0.3)p 0.2p 0.2p
Basic (loss)/ earnings per share (0.3)p (0.3)p 0.3p 0.1p
Our Franchise partners
26 weeks to 26 weeks to 26 weeks to 26 weeks to
27 Sep 2025 28 Sep 2024 23 Sep 2023 24 Sep 2022
Worldwide retail sales(1) £m 90.7 121.2 137.2 162.1
Online retail sales £m 10.0 12.2 13.7 13.1
Total number of stores 344 440 500 562
Space (k) sq. ft. 858 1,100 1,201 1,345
Clive Whiley, Chairman of Mothercare plc, commented:
"Mothercare is making good progress against our strategic priorities. After
the strategic and operational challenges of the last few years, our
performance in the first half shows that Mothercare has been stabilised as a
smaller and cash generative business with greatly reduced debt. Our new
partnerships with Reliance in South Asia and Ebebek in Turkey are now bearing
fruit, underlining the intrinsic value of and opportunity for our brand.
From this position of relative strength our key focus for 2026 is to pursue
options to rebuild our scale and operations both in the UK and globally,
alongside pursuing the refinancing of our existing debt financing
facilities. This is an exciting prospect for our partners, our colleagues
and all our stakeholders as we look towards the new year and those
opportunities ahead."
Investor and analyst enquiries to:
Mothercare plc
Email: investorrelations@mothercare.com
(mailto:investorrelations@mothercare.com)
Clive Whiley, Chairman
Andrew Cook, Chief Financial
Officer
Deutsche Numis
Tel: 020
7260 1000
(NOMAD & Joint Corporate Broker)
Luke Bordewich
Cavendish Capital Markets Limited
Tel: 020 7220 0500
(Joint Corporate
Broker)
Matt Goode
Media enquiries to:
MHP
Email: mothercare@mhpc.com
Rachel Farrington
Tel: 07739 312199
Tim Rowntree
Notes
1 - Worldwide retail sales are total international retail franchise partner
sales to end customers (which are estimated and unaudited).
2 - Adjusted profit after taxation is stated before the impact of the
adjusting items set out in note 4.
3 - Net debt is defined as total borrowings, cash at bank and IFRS 16 lease
liabilities.
4 - This announcement contains certain forward-looking statements concerning
the Group. Although the Board believes its expectations are based on
reasonable assumptions, the matters to which such statements refer may be
influenced by factors that could cause actual outcomes and results to be
materially different. The forward-looking statements speak only as at the date
of this document and the Group does not undertake any obligation to announce
any revisions to such statements, except as required by law or by any
appropriate regulatory authority.
5 - The information contained within this announcement is deemed by the
Company to constitute inside information for the purposes of the Market Abuse
Regulation (EU) No 596/2014. Upon the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to
be in the public domain.
6 - The person responsible for the release of this announcement is Lynne
Medini, Group Company Secretary at Mothercare plc, Westside 1, London Road,
Hemel Hempstead, HP3 9TD.
7 - Mothercare plc's Legal Entity Identifier ("LEI") number is
213800ZL6RPV9Z9GFO74.
Chairman's Statement
My last Chairman's statement detailed how we had successfully protected the
underlying Mothercare brand intellectual property ("IP") in a solvent business
structure, for the benefit of all stakeholders, whilst overseeing an 83%
reduction of the combined debt financing & pension schemes actuarial
deficit since the year ended March 2018. Over the same period, worldwide
retail sales fell by some 79% and the reported adjusted loss before tax fell
by 96%.
Throughout, notwithstanding contending with the unprecedented Covid-19 led
demand shock in 2020, the subsequent loss of retail sales of £88 million in
Russia in 2022 due to sanctions from the Ukraine war and more recently the
geopolitical impacts on our Middle Eastern business, we have strived to secure
a sustainable business model. Mothercare now has the capacity to sponsor
future growth in our franchise partners' retail sales and store footprint
alongside exploring new territories and additional routes to market.
The arrangements detailed below underline the inherent strength and global
appeal of the Mothercare brand and the value it can add with businesses that
are already market leaders in their territory, alongside bringing symbiotic
and synergistic benefits.
Progress with new Joint Venture & License Arrangements
We have made significant progress with both the joint venture with Reliance
Brands Ltd ("Reliance") and the license agreement for Turkey, with Ebebek
Mağazacılık A.Ş. ("Ebebek"):
South Asian Joint Venture
In October 2024 we announced a new joint venture with Reliance, a wholly owned
subsidiary of Reliance Industries Ltd, a Fortune 500 company and the largest
private sector corporation in India, with an entry valuation of c£30 million
for the South Asian region.
We retain a residual 49% shareholding in a new joint venture company, JVCO
2024 Ltd ("JVCo"), covering Mothercare's franchise operations in India, Nepal,
Sri Lanka, Bhutan and Bangladesh, which was granted perpetual rights for the
use of the Mothercare brand and related intellectual property in those
regions.
For FY25 our retail sales in India amounted to £18.6 million and contributed
approximately £0.4 million to adjusted EBITDA (FY24: under the previous
franchise arrangements approximately £24.0 million retail sales and £0.9
million adjusted EBITDA).
Whilst we now receive revenues at lower rates than previously, Reliance have
recently confirmed their aspirations for the reinvigorated business to
significantly grow revenue levels, and we believe it is possible for them to
grow their retail sales to around £300 million in five years, supported by a
store opening programme targeting fifty new stores in the region in 2026. We
also expect to benefit from both sourcing fees (supplying the joint venture
with product) together with the value creation accruing to our residual 49%
equity stake in JVCo.
License Agreement
In June 2025 we announced a license agreement for Turkey, with Ebebek, the
leading retailer in our sector in Turkey meeting all the needs of mother
and baby from the prenatal period up to the age of four. Ebebek has some 280
stores and an online business producing revenues of around £400 million
together with three stores recently opened in the UK. The license agreement
gives Ebebek the exclusive right to use the Mothercare brand in Turkey on
products either designed and sourced by Ebebek or Mothercare for a period of
10 years.
The agreement also allows Mothercare to purchase products Ebebek has sourced
for itself, either under its own brands or Mothercare, for sale by our
franchise partners outside of the territories where Ebebek trades and to
re-brand these products with the Mothercare brand if relevant. The shares of
Ebebek, which went public in 2023, are traded on Borsa Istanbul's Stars Market
under the code EBEBK.
Ebebek are launching Mothercare products in store imminently, with the full
range available in the Spring. Furthermore Ebebek have expressed interest in
extending the relationship to other territories.
We look forward to working closely with Reliance and Ebebek to establish
Mothercare as an important part of their business.
Trading Update
Worldwide retail sales by franchise partners of £90.7 million (2024: £121.2
million) reflect the full year impact of the reductions in the Middle East
markets coupled the declining sales in the UK as our exclusive relationship
with Boots in the UK ends imminently. Online retail sales for the period
increased marginally to 11% of total retail sales (H1 FY25: 10%). The
year-on-year decline in retail sales of 25% reduces to 22% at constant
currency exchange rates. Online retail sales for the period remained at 10% of
total retail sales (H1 FY24: 10%). The year-on-year decline in retail sales of
12% reduces to 9% at constant currency exchange rates. Like-for-like retail
sales for the six months to September 2025 were down 6%.
In our Middle Eastern markets a net 50 stores were closed in the twelve months
to 27 September 2025. These closures were as a result of the region wide
reduction in footfall and resultant sales, driven by the continuing regional
unrest and evolving consumer behaviour. However we do not expect any further
significant store closures, as now that the majority of the old inventory has
been cleared the profitability of our franchise partner is improving, despite
the challenges currently facing retailers in the region.
Adjusted EBITDA for the period decreased to £0.8 million (2025: £1.7
million) leading to an adjusted loss before taxation of £1.1 million (2024:
£1.4 million adjusted loss before taxation).
Growth Opportunities
Our primary goal for the current year is to capitalise upon the possibilities
to grow the future global presence of the Mothercare brand through connections
with other businesses, the development of our branded product ranges and
licensing within and beyond our existing perimeters.
Accordingly, we have had discussions with several interested parties with the
core focus being to:
· monetise the operational gearing in the business, by restoring
critical mass to reinforce the efforts of our talented management team to
drive our product offering to new heights;
· where the current business model could support much higher
volumes, and would result in the vast majority of increased income falling
straight to the bottom line; and
· demonstrate the latent value of our efforts to boost growth
through the South Asian region joint venture and licensing agreement in
Turkey.
These objectives are designed to rebalance the Mothercare brand IP value in a
way that also promotes growth in our royalty income: ultimately improving
profitability and the covenant of the underlying business for actuarial
pension and stock market rating purposes alike.
Financing Arrangements with Gordon Brothers
Last year we refinanced the Company's existing debt facilities with GB Europe
Management Services Ltd ("Gordon Brothers"), replacing the
previous £19.5m term loan (which attracted interest at a rate of 13% per
annum, plus SONIA, plus PIK interest of 1% per annum) with an £8m two year
term loan facility, attracting interest at a rate of 4.8% per annum, plus
SONIA (with a floor of 5.2%), plus PIK interest of 1% per annum, rising to 2%
per annum through the term of the loan to October 2026.
In addition, with a view to aligning interests with the equity stakeholders,
we granted Gordon Brothers warrants to subscribe for up to 43.4m new ordinary
shares at a subscription price of 8.5p per share, (the "Warrants"),
exercisable for five years from the date of issue representing approximately
7% of the Company's issued share capital (following exercise in full of the
Warrants).
In our full year 2025 results announcement we noted that the Group expected to
breach the liquidity financial covenant of our £8 million debt facility and
we have subsequently breached this covenant, which means the facility is now
repayable on demand. The Group continues to benefit from the ongoing support
of its lender and we have regular and positive discussions with them. We
continue to have sufficient cash to trade for the foreseeable future.
Pension Schemes
We also highlighted in our full year 2025 results announcement that the
Group's Pension Trustee had agreed to defer the first six months' payments of
pension contributions due in the year to March 2026 and that we had requested
a further deferral of such payments for the remainder of this financial year
to support the Company's cash flows whilst we are exploring growth
opportunities. On 20 October we announced that the Trustee had agreed to
extend the deferral of contributions to March 2026.
The total contributions due in the year to March 2026 that are deferred amount
to £3.0 million. This sum together with the remaining contributions due, will
be paid in accordance with a new schedule of contributions to be put in place
no later than 31 March 2026 and which will include a resumption of
contributions from 19 April 2026 at a level that the Trustee considers to be
affordable.
Mind the Gap
The Board of Mothercare is very grateful for the significant support that both
the Group's Pension Trustee and our primary lender have provided. This
deferral and forbearance is critical to allow the Company to focus upon,
evaluate and conclude the ongoing strategic discussions with greater
flexibility as we seek to restore critical mass for the benefit of all
stakeholders.
However, whilst Gordon Brothers has not indicated that they require immediate
repayment of the facility, they would clearly prefer earlier repayment than
the current facility expiration date of October 2026. In this context, we have
written to the Group's Pension Trustee (as the secondary charge holder)
requesting that they consider a loan or investment in the Company which we are
exploring alongside other stakeholder and alternative financing proposals. We
also continue to explore other options to mitigate the pension scheme deficit.
Our forecasts show the Group to be trading in a generally cash neutral
position across the next twelve months, with retail sales and income growing
above FY26 levels, particularly in Turkey & India.
Management
We have a PLC Board that we believe is appropriate for a company of our size,
nature and circumstances. Our Non-Executive Directors have relevant skills,
continue to directly contribute to the ongoing change process, are regularly
appraised and are encouraged to interface with the Operating Board.
The day-to-day management of the Group continues to be run by the Chief
Financial Officer and the Operating Board, with oversight from me as Chairman.
We continue to anticipate the search for a new Chief Executive Officer to be
fulfilled as a natural consequence of the multiple strategic discussions
currently in train.
Dividend Policy
The Company has not paid a dividend since February 2012. The Directors
understand the importance of optimising value for shareholders and it is the
Directors' intention to return to paying a dividend when it is financially
prudent for the Group to do so.
Summary and Outlook
On behalf of the Board, I would once again like to thank our colleagues across
the business, together with our pension trustees and all other stakeholders
for their unfailing support throughout the challenges of the last seven years.
As detailed, we are making significant progress with the new South Asian joint
venture & Turkish licensing agreement where we also expect to benefit from
both sourcing fees and buying benefits. The latter are designed to reinforce
our cooperation with our franchise partners by potentially significantly
improving their profitability, particularly for home and travel products, to
encourage further investment in their store estate.
However, notwithstanding the close working relationship established with both
the pension trustee and Gordon Brothers the unintended consequences of the UK
Listing Rules changes last year, which removed the previously sacrosanct
requirement for shareholder approval for material transactions, has tilted the
balance towards debt providers, to the detriment of equity.
Notwithstanding this potentially places us at a material disadvantage, we are
determined to ensure that management remain unfettered as we drive towards
optimising a transaction to restore critical mass for the benefit of all
stakeholders.
Clive Whiley
Chairman
Condensed consolidated income statement
For the 26 weeks ended 27 September 2025
26 weeks ended 27 September 2025 26 weeks ended 28 September 2024 52 weeks ended
(Unaudited) (Unaudited) 29 March 2025
(Audited)
Before adjusted items Adjusted items(1) Total Before adjusted items Adjusted items (1) Total Total
£ million £ million
Note £ million £ million
£ million £ million £ million
Revenue 11.6 - 11.6 21.0 - 21.0 38.9
Cost of sales (6.6) - (6.6) (13.0) - (13.0) (24.7)
Gross profit 5.0 - 5.0 8.0 - 8.0 14.2
Administrative expenses (5.3) (0.3) (5.6) (6.9) (0.4) (7.3) 2.1
Impairment gain / (loss) on receivables 0.3 - 0.3 - - - (0.3)
(Loss)/profit from operations - (0.3) (0.3) 1.1 (0.4) 0.7 16.0
Net finance costs 5 (1.1) - (1.1) (2.5) - (2.5) (4.1)
(Loss)/profit before taxation (1.1) (0.3) (1.4) (1.4) (0.4) (1.8) 11.9
Taxation 6 (0.3) - (0.3) (0.0) - (0.0) (5.7)
(Loss)/profit for the period (1.4) (0.3) (1.7) (1.4) (0.4) (1.8) 6.2
(Loss)/profit for the period attributable
to equity holders of the parent (1.4) (0.3) (1.7) (1.4) (0.4) (1.8) 6.2
Earnings per share
Basic 7 (0.3)p (0.3)p (0.3)p (0.3)p 1.1p
Diluted 7 (0.3 p (0.3)p (0.3 p (0.3 p 1.1p
(1) Adjusted items are one-off or significant in nature and or /value.
Excluding these items from the profit metrics provides readers with helpful
additional information on the performance of the business across the periods
because it is consistent with how business performance is reviewed by the
Board and Operating Board.
Condensed consolidated statement of comprehensive income
For the 26 weeks ended 27 September 2025
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2025 28 September 2024 29 March 2025
(Unaudited) (Unaudited) (Audited)
£ million £ million £ million
(Loss)/profit for the period (1.7) (1.8) 6.2
Items that will not be reclassified subsequently to the income statement:
Actuarial gain on defined benefit pension schemes
1.2 3.8 3.7
Fair value gain on intellectual property - - 10.7
Deferred tax relating to items not reclassified (0.3) (1.0) -
0.9 2.8 14.4
Items that may be reclassified subsequently to the income statement:
Exchange differences on translation of overseas subsidiaries - - (0.1)
Other comprehensive income for the period 0.9 2.8 14.3
Total comprehensive (expense)/income for the period wholly attributable to
equity holders of the parent
(0.8) 1.0 20.5
Condensed consolidated balance sheet
As at 27 September 2025
27 September 2025 28 September 2024 29 March 2025
(Unaudited) (Unaudited) (Audited)
Note £ million £ million £ million
Non-current assets
Investment in associate 8 10.8 - 10.8
Intangible assets 9 7.3 8.4 7.8
Property, plant and equipment 9 0.1 0.2 0.2
Right-of-use assets 0.7 - 0.8
Deferred tax assets - 3.5 0.1
18.9 12.1 19.7
Current assets
Inventories 0.3 0.7 0.6
Trade and other receivables 4.1 6.1 4.1
Derivative financial instruments 12 - 0.5 -
Cash and cash equivalents 3.0 2.8 4.3
7.4 10.1 9.0
Total assets 26.3 20.2 28.7
Current liabilities
Trade and other payables (5.1) (9.5) (6.2)
Lease liabilities (0.1) - (0.1)
Provisions - (0.1) (0.6)
Current tax liabilities (1.1) (0.1) (1.3)
Borrowings 10 - (19.9) -
(6.3) (29.6) (8.2)
Non-current liabilities
Borrowings 10 (8.1) - (8.0)
Lease liabilities (0.6) - (0.7)
Retirement benefit obligations 11 (21.1) (20.6) (21.1)
Provisions (0.1) - (0.1)
Deferred tax liabilities (0.2) (1.0) -
(30.1) (21.6) (29.9)
Total liabilities (36.4) (51.2) (38.1)
Net liabilities (10.1) (29.0) (9.4)
Equity attributable to equity holders of the parent
Share capital 89.3 89.3 89.3
Share premium account 108.8 108.8 108.8
Own shares (0.2) (0.2) (0.2)
Translation reserve (3.8) (3.7) (3.8)
Revaluation reserve 10.7 - 10.7
Retained deficit (214.9) (223.2) (214.2)
Total equity (10.1) (29.0) (9.4)
Condensed consolidated statement of changes in equity
For the 26 weeks ended 27 September 2025 (unaudited)
Share capital Share premium account Own shares Translation reserve Revaluation reserve Retained Total equity
deficit
£ million £ million £ million £ million £ million £ million £ million
Balance as at 29 March 2025 89.3 108.8 (0.2) (3.8) 10.7 (214.2) (9.4)
Loss for the period - - - - - (1.7) (1.7)
Other comprehensive income for the period - - - - - 0.9 0.9
Total comprehensive expense for the period (0.8) (0.8)
- - - - -
Adjustments to equity for equity-settled share-based payments - - 0.1 0.1
- - -
Balance at 27 September 2025 89.3 108.8 (0.2) (3.8) 10.7 (214.9) (10.1)
For the 26 weeks ended 28 September 2024 (unaudited)
Share capital Share premium account Own Translation reserve Retained Total equity
shares deficit
£ million £ million £ million £ million £ million £ million
Balance as at 30 March 2024 89.3 108.8 (0.2) (3.7) (224.3) (30.1)
Loss for the period - - - - (1.8) (1.8)
Other comprehensive income for the period - - - - 2.8 2.8
Total comprehensive income for the period - 1.0 1.0
- - -
Adjustments to equity for equity-settled share-based payments - 0.1 0.1
- - -
Balance at 28 September 2024 89.3 108.8 (0.2) (3.7) (223.2) (29.0)
For the 52 weeks ended 29 March 2025 (audited)
Share capital Share premium account Own Translation reserve Revaluation reserve Retained Total equity
shares deficit
£ million £ million £ million £ million £ million £ million £ million
Balance at 30 March 2024 89.3 108.8 (0.2) (3.7) - (224.3) (30.1)
Profit for the year - - - - - 6.2 6.2
Other comprehensive income: - - - - - - -
Retranslation of net assets of overseas subsidiaries - - - (0.1) - - (0.1)
Remeasurement of defined benefit schemes - - - - - 3.7 3.7
Fair value gain - - - - 10.7 - 10.7
Total other comprehensive income - - - (0.1) 10.7 3.7 14.3
Total comprehensive income - - - (0.1) 10.7 9.9 20.5
Adjustment to equity for equity-settled share-based payments
- - - - 0.2 0.2
Balance at 29 March 2025 89.3 108.8 (0.2) (3.8) 10.7 (214.2) (9.4)
Condensed consolidated cash flow statement
For the 26 weeks ended 27 September 2025
26 weeks ended 26 weeks ended 52 weeks ended
Note 27 September 2025 28 September 2024 29 March 2025
(Unaudited) (Unaudited) (Audited)
£ million £ million £ million
Net cash flow from operating activities 14 (0.7) - (1.5)
Cash flows from investing activities:
Investment in associate - - (0.1)
Proceeds from IP sale - - 16.0
Purchase of intangibles - software (0.1) (0.8) (1.1)
Net cash (outflow)/inflow from investing activities (0.1) (0.8) 14.8
Cash flows from financing activities:
Repayment of borrowings - - (11.9)
Proceeds from post administration distribution - 0.2 1.2
Interest paid (0.4) (1.5) (3.0)
Repayments of obligations under leases (0.1) (0.2) (0.3)
Net cash outflow from financing activities (0.5) (1.5) (14.0)
Net decrease in cash and cash equivalents (1.3) (2.3) (0.7)
Cash and cash equivalents at beginning of period 4.3 5.0 5.0
Effect of foreign exchange rate changes - 0.1 -
Cash and cash equivalents at end of period 3.0 2.8 4.3
Notes to the condensed consolidated financial statements
1 General information
The review of the Group's business activities, together with factors likely to
affect its future development, performance and position are set out in the
Financial Highlights and Chairman's Statement.
The results for the 26 weeks ended 27 September 2025 are unaudited.
These unaudited condensed consolidated interim financial statements for the
current period and prior financial periods do not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A copy of the
statutory accounts for the 2025 financial year has been filed with the
Registrar of Companies. The 2025 financial statements are available on the
Group's website (www.mothercareplc.com
(https://protect.checkpoint.com/v2/r06/___http:/www.mothercareplc.com___.ZXV3MjpuZXh0MTU6YzpvOmMxYWZkZDJmMGE0OWJiNThlMTA1N2YzMmRhYjU1MDIwOjc6YTBhOTphNmI1N2YwOTIxOGY1NzQ2OWZmODVjZDFlY2UzODQ3ZDE2NGU5ODI0ZmNlMTFmZjhhY2E4ODUzYzU4Mzg1MDI4OnA6RjpU)
). The auditor has reported on these: their report was unqualified.
2 Accounting Policies and Standards
Basis of preparation
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with the Disclosure and Transparency Rules of the UK
Financial Conduct Authority, and with IAS 34 'Interim Financial Reporting'.
Unless otherwise stated, the accounting policies applied, and the judgements,
estimates and assumptions made in applying these policies, are consistent with
those described in the Annual Report and Financial Statements 2025. The
financial period represents the 26 weeks ended 27 September 2025. The
comparative periods are the 26 weeks ended 28 September 2024 and the 52 weeks
ended 29 March 2025.
Going concern
At the half year reporting period end, we were forecasting to breach a
financial covenant of our £8 million debt facility, which would result in the
facility becoming repayable on demand rather than the term date of October
2026. The breach was expected to be of the liquidity financial covenant, which
requires us to maintain cash balances above £2.6 million, other than for a
period of no more than three days.
Subsequent to our half year reporting period end we have breached this
covenant, which means the facility is now repayable on demand. The Group
continues to benefit from the ongoing support of its lender and we continue to
have regular and positive discussions with them. Our lender has not indicated
that they require immediate repayment of the facility. Whilst during certain
points of our working capital cycle we have not met the liquidity financial
covenant, we continue to have sufficient cash to trade for the foreseeable
future.
The consolidated financial statements have been prepared on a going concern
basis. When considering the going concern assumption, the Directors of the
Group have reviewed a number of factors, including the Group's trading results
and its continued access to sufficient borrowing facilities against the
Group's latest forecasts and projections, comprising:
• A Base Case forecast; and
• A Sensitised forecast, which applies sensitivities against the Base Case
for reasonably possible adverse variations in performance, reflecting the
ongoing volatility in our key markets.
The Sensitised forecast shows a decrease in worldwide retail sales of 10% as
compared to the Base Case in the remainder of the financial year to March 2026
and for the year to March 2027, with the overhead costs assumed to remain
constant.
In making the assessment on going concern the Directors have assumed that the
Group is able to mitigate the material uncertainty surrounding the ongoing
financial restructuring of the Group, which includes:
In making the assessment on going concern the Directors have assumed that the
Group is able to mitigate the material uncertainty surrounding the ongoing
financial restructuring of the Group, which includes:
Notes to the condensed consolidated financial statements
2 Accounting Policies and Standards (continued)
Going concern (continued)
• The Group's ability to successfully renegotiate its banking facilities,
which have become repayable on demand after the half year reporting period,
with either its existing lenders or to refinance with a third party, in order
to secure ongoing funding for the Group; and
• The Group's ability to renegotiate its Defined Benefit Pension Deficit
Repayment plan with the Pension Trustee. After the half year reporting period
end the Pension Trustee agreed to defer contributions to March 2026 with a
revision to the current schedule of contributions to be agreed by 31 March
2026, at a time and a level that the Trustee considers to be affordable to the
Group.
The Board's confidence in the Group's Base Case forecast, which indicates the
Group will operate with sufficient cash for at least the next 12 months, and
the Group's proven cash management capability supports our preparation of the
financial statements on a going concern basis and therefore financial
statements do not include the adjustments that would be required if the Group
were unable to continue as a going concern. However, if trading conditions
were to deteriorate beyond the level of risks applied in the sensitised
forecast, or the Group was unable to mitigate the material uncertainties
assumed in the Base Case Forecast and the Group was not able to execute
further cost or cash management programmes, the Group would at certain points
of the working capital cycle have insufficient cash. If this scenario were to
crystallise the Group would be unable to meet liabilities as they fall due and
potentially need to secure additional funding. Therefore, we have concluded
that, in this situation, there is a material uncertainty that casts
significant doubt that the Group will be able to operate as a going concern
without utilising uncommitted or new financing facilities.
Adoption of new IFRSs
A number of new or amended standards became applicable for the current
reporting period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
Standards issued but not yet effective
As at 27 September 2025, the following standards and interpretations had been
issued but were not mandatory for annual reporting periods ending on 27
September 2025.
· On 30 May 2024, the IASB issued targeted amendments to IFRS 9
Financial Instruments and IFRS 7 Financial Instruments: Disclosures to respond
to recent questions arising in practice, and to include new requirements not
only for financial institutions but also for corporate entities. The
amendments to IFRS 9 and IFRS 7 will be effective for annual reporting periods
beginning on or after 1 January 2026, with early application permitted subject
to any endorsement process.
· IFRS 18, 'Presentation and Disclosure in Financial Statements' -
This is the new standard on presentation and disclosure in financial
statements, which replaces IAS 1, with a focus on updates to the statement of
profit or loss.
Foreign currency adjustments
Foreign currency monetary assets and liabilities are revalued to the closing
balance sheet rate under IAS21 "The Effects of Changes in Foreign Exchange
Rates".
Notes to the condensed consolidated financial statements
2 Accounting Policies and Standards (continued)
Taxation
The taxation charge for the 26 week period is calculated by applying the best
estimate of the average annual effective tax rate expected for the full year
to the profit/loss for the period after adjusting for any significant one-off
items, and a tax credit is recognised only to the extent that the resulting
tax asset is more than likely not to reverse.
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
For defined benefit schemes, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial valuations being
carried out at each balance sheet date. Actuarial gains and losses are
recognised in full in the period in which they occur. They are recognised
outside of the income statement and presented in other comprehensive income.
Past service cost is recognised immediately to the extent that the benefits
are already vested.
The retirement benefit obligation recognised in the balance sheet represents
the present value of the defined benefit obligation less the fair value of
scheme assets. Any asset resulting from this calculation is limited to past
service cost, plus the present value of available refunds.
The Group has an unconditional right to a refund of surplus under the rules.
In consultation with the independent actuaries to the schemes, the valuation
of the pension obligation has been updated to reflect: current market discount
rates; current market values of investments and actual investment returns; and
also for any other events that would significantly affect the pension
liabilities. The impact of these changes in assumptions and events has been
estimated in arriving at the valuation of the pension obligation.
Alternative performance measures (APMs)
In the reporting of financial information, the Directors have adopted various
APMs of historical or future financial performance, position or cash flows
other than those defined or specified under International Financial Reporting
Standards (IFRS).
These measures are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs, including those in the Group's
industry.
APMs should be considered in addition to, and are not intended to be a
substitute for, or superior to, IFRS measures.
Purpose
The Directors believe that these APMs assist in providing additional useful
information on the performance and position of the Group because they are
consistent with how business performance is reported to the Board and
Operating Board.
APMs are also used to enhance the comparability of information between
reporting periods and geographical units (such as like-for-like sales), by
adjusting for non-recurring or uncontrollable factors which affect IFRS
measures, to aid the user in understanding the Group's performance.
Consequently, APMs are used by the Directors and management for performance
analysis, planning, reporting and incentive setting purposes and have remained
consistent with prior year.
Notes to the condensed consolidated financial statements
2 Accounting Policies and Standards (continued)
The key APMs that the Group has focused on during the period are as follows:
Group worldwide sales
Group worldwide sales are total international retail franchise partner sales
to end customers. Total Group revenue is a statutory number and is made up of
receipts from international franchise partners, which includes royalty
payments and the cost of goods dispatched to international franchise partners.
Constant currency sales
The Group reports some financial measures on both a reported and constant
currency basis. Sales in constant currency exclude the impact of movements in
foreign currency exchange translation.
Profit/(loss) before adjusted items
The Group's policy is to exclude items that are considered to be significant
in both nature and/or quantum and where treatment as an adjusted item provides
stakeholders with additional useful
information to assess the year-on-year trading performance of the Group.
3 Segmental information
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reported to the
Group's executive decision makers (comprising the executive directors and
operating board) in order to allocate resources to the segments and assess
their performance. Under IFRS 8, the Group has not identified that its
continuing operations represent more than one operating segment.
The results of franchise partners are not reported separately, nor are
resources allocated on a franchise partner by franchise partner basis, and
therefore have not been identified to constitute separate operating segments.
Notes to the condensed consolidated financial statements
4 Adjusted items
Due to their significance or one-off nature, certain items have been
classified as adjusted items as follows:
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2025 28 September 2024 29 March 2025
(Unaudited) (Unaudited) (Audited)
£ million £ million £ million
Adjusted (costs)/income:
Onerous contract included in cost of sales - - (0.6)
Sale of IP rights - - 15.2
Financial asset - - 0.5
Past service costs - - (0.3)
Restructuring costs included in administrative expenses (0.3) (0.4) (0.8)
Restructuring costs included in finance costs - - (0.4)
Adjusted items before tax (0.3) (0.4) 13.6
Restructuring costs included in administrative expenses - £0.3 million (H1
FY25: £0.4 million)
The current year costs relates to redundancy payments made to certain staff
during the period.
The prior year costs relates to:
• £0.2 million redundancy payments made to certain staff during the
period.
• £0.2 million costs relating to implementation of new IT system.
5 Net finance costs
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 2024 29 March 2025
2025 (Unaudited) (Audited)
(Unaudited)
£ million £ million £ million
Interest payable and finance charges 0.4 1.9 3.0
Net interest expense on liabilities/return on assets on pension 0.7 0.6 1.1
Net finance costs 1.1 2.5 4.1
Notes to the condensed consolidated financial statements
6 Taxation
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 2024 29 March
2025 (Unaudited) 2025
(Unaudited) (Audited)
£ million £ million £ million
Current tax - Overseas tax and UK corporation tax 0.3 0.0 2.3
Deferred tax - UK tax charge for temporary differences - - 3.4
Total tax charge 0.3 0.0 5.7
In addition to the amount charged to the income statement, deferred tax charge
relating to retirement benefit obligations amounting to £0.3 million has been
charged directly to other comprehensive income (H1 FY25: £1.0 million).
7 (Loss)/earnings per share
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 2024 29 March
2025 (Unaudited) 2025
(Unaudited) (Audited)
million million million
Weighted average number of shares in issue for the purpose of basic earnings
per share
563.8 563.8 563.8
Dilutive potential ordinary shares - - 11.5
Weighted average number of shares in issue for the purpose of diluted earnings
per share
563.8 563.8 575.3
£ million £ million £ million
(Loss)/profit for basic and diluted earnings per share (1.7) (1.8) 6.2
Adjusted items 0.3 0.4 (8.7)
Tax effect of adjusted items - - -
Adjusted loss (1.4) (1.4) (2.5)
£ million £ million £ million
Pence Pence Pence
Basic (loss)/earnings per share (0.3) (0.3) 1.1
Basic adjusted loss per share (0.3) (0.3) (0.4)
Diluted (loss)/earnings per share (0.3) (0.3) 1.1
Diluted adjusted loss per share (0.3) (0.3) (0.4)
The total dividend for the period is nil pence per share (H1 FY25: nil pence
per share).
Where there is a loss per share, the calculation has been based on the
weighted average number of shares in issue, as the loss renders all
potentially dilutive shares anti-dilutive
8 Investment in associate
JVCO 2024 Ltd is engaged in retailing of clothing, equipment and other
categories for parents and young children via a franchisee model in the
territories of India, Bhutan, Sri Lanka, Nepal and Bangladesh.
At year end, the associate did not hold any contingent liabilities or
commitments.
The tables below provide summarised financial information for JVCO 2024 Ltd.
The information disclosed reflects the amounts presented in the financial
statements of JVCO 2024 Ltd and not Mothercare Plc's share of those amounts.
Notes to the condensed consolidated financial statements
8 Investment in associate (continued)
Summarised Statement of Financial position £ million
Intangible assets 33.3
Trade and other receivables 0.2
Total assets 33.5
Net assets 33.5
Summarised Income Statement £ million
Revenue 0.1
Income tax -
Profit for the period 0.1
Reconciliation to carrying amounts £ million
Opening net assets at 29 March 2025 33.4
Profit for the period 0.1
Closing net assets 33.5
Group's share in % 49%
Groups share in £million 16.4
Fair value adjustments (5.6)
Carrying amount 10.8
9 Tangible fixed assets and Software assets
There were no additions to Right-of-use assets in the period.
Capital additions of £0.1 million were made during the period (H1 FY26: £0.8
million). These are software assets of £0.1 million (H1 FY26: £0.8 million).
10 Borrowings
The carrying value of the Group's outstanding borrowings at 27 September 2026
was £8.1 million (30 March 2025: £8.0 million). The Group is
required to achieve certain royalty, EBITDA and minimum liquidity targets
under its loan's covenants.
The credit facility of £8.1 million (29 March 2025: £8.0 million) is
secured on the shares of specified obligor subsidiaries and the assets of the
Group not already pledged.
11 Retirement benefit schemes
The Group has calculated the value of its pension liability under IAS 19 as at
27 September 2025. The FY25 year end assumptions have been rolled forward and
updated for changes in market rates over the current interim period.
For the two schemes, based on the actuarial assumptions from the actuarial
valuations carried out as of March 2025 and using the rolled forward
assumptions referred to above, a net obligation of £21.1 million (H1 FY25:
£20.6 million) has been recognised.
Notes to the condensed consolidated financial statements
12 Financial instruments: fair value disclosures (continued)
The Group held the following financial instruments at fair value at 27
September 2025.
Fair value measurements at 27 September Fair value measurements at 28 September 2024 Fair value measurements at 29 March 2025
2025 (Unaudited) (Audited)
(Unaudited)
£ million £ million £ million
Current financial assets:
Derivative financial instruments:
Financial asset - 0.5 -
- 0.5 -
The Group's financial asset (Level 3 within the IFRS 7 hierarchy) represents a
right, arising under the sales purchase agreement with the administrators of
MUK, to receive the proceeds of the wind-up of the UK retail store estate and
website operations as repayment for the Group's secured borrowings. It has
been estimated by the administrators that the Group will receive further
proceeds of £Nil (H1 FY25: £0.5 million). Many of the outflows which would
impact the valuation of this financial asset are finalised, with the final
repayment being dependent on the amounts to be received back by the merchant
acquirer and final settlement of VAT.
The Directors consider that the carrying value amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements
are approximately equal to their fair values.
13 Share-based payments
A charge is recognised for share-based payments based on the fair value of the
awards at the date of grant, the estimated number of shares that will vest and
the vesting period of each award. The total net charge for share-based
payments under IFRS 2 is £0.1 million (H1 FY25: £0.1 million).
14 Notes to the cash flow statement
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 2024 29 March 2025
2025 (Unaudited) (Audited)
(Unaudited)
£ million £ million £ million
(Loss)/profit from operations (0.3) 0.7 16.0
Adjustments for:
Depreciation of property, plant and equipment and right of use assets 0.1 0.1 0.3
Amortisation of intangible assets 0.7 0.5 1.2
Gain on sale of subsidiary - - (15.2)
Loss on foreign currency adjustments - (0.1) (0.1)
Share-based payments 0.1 0.1 0.2
Movement in provisions (0.5) (0.2) 0.4
Net gain on financial derivative instruments - - (0.5)
Payments to retirement benefit schemes (0.2) (1.1) (2.2)
Charge in respect of retirement benefit schemes 0.6 0.7 1.4
Operating cash flow before movement in working capital 0.5 0.7 1.5
Decrease in inventories 0.3 0.3 -
(Increase)/decrease in receivables (0.4) (1.9) 0.6
(Decrease)/increase in payables (0.7) 1.0 (2.1)
Cash generated from operations (0.3) 0.1 -
Income taxes paid (0.4) (0.1) (1.5)
Net cash flow from operating (0.7) - (1.5)
activities
Notes to the condensed consolidated financial statements
14 Notes to the cash flow statement (continued)
Analysis of net debt
29 March Non-cash movements 27 September
2025 Cash flow 2025
£ million £ million £ million £ million
Cash and cash equivalents 4.3 (1.3) - 3.0
IFRS 16 lease liabilities (0.8) 0.1 - (0.7)
Term loan (8.0) - (0.1) (8.1)
Net debt (4.5) (1.2) (0.1) (5.8)
15 Related party transactions
Transactions between the Group and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. There was no revenue earned from related parties in the current or prior
year.
16 Events after the balance sheet date
Subsequent to the period end, the Group's Pension Trustee has agreed to extend
the deferral of pension contributions due in the financial year ending 31
March 2026. The deferral covers the full year's contributions, amounting to
£3.0 million, which were originally scheduled to be paid during the year. The
deferred contributions, together with any remaining amounts due, will be
payable in accordance with a new schedule of contributions to be agreed with
the Trustee no later than 31 March 2026. Under the revised arrangements,
contributions are expected to resume from 19 April 2026 at a level deemed
affordable by the Trustee.
In our full year 2025 results we reported that we expected to breach the
liquidity financial covenant of our £8.0 million debt facility. Subsequent to
our half year reporting period end we have breached this covenant, which means
the facility is now repayable on demand. The Group continues to benefit from
the ongoing support of its lender and we continue to have regular and positive
discussions with them. Our lender has not indicated that they require
immediate repayment of the facility. Whilst during certain points of our
working capital cycle we have not met the liquidity financial covenant, we
continue to have sufficient cash to trade for the foreseeable future.
Additional Disclosures
Risk management framework
A risk management framework is in place which is appropriate for the size and
complexity of the business with consideration to its AIM listing, future
partner and system developments and Brand promotion and evolution.
MGB maintains its risk management function in line with the Quoted Companies
Alliance Corporate Governance Code (QCA Code) complying with AIM Rule 26. The
Audit & Risk Committee provides oversight, as to the overall suitability
and effectiveness of the risk management approach and is accountable and
supported by the Board. The Operating Board formally reviews, discusses and
documents the Principal Risks to the business at least annually. The Risk
Committee, which is chaired by the CFO, sits quarterly to understand existing
and developing issues, and MGB Senior Managers contribute to and update
Operational Risk registers, as a minimum also quarterly. All colleagues
recognise their responsibility to proactively identify and manage risk and
opportunity in their daily activities and planning.
Principal risks and uncertainties
Reviewed, discussed and agreed by the Operating Board annually, MGB Principal
Risks are designed to promote strategic success and improve future
performance, the impact of operational risks on these determines the focus for
senior management and their teams. The following risks have been agreed:
· Liquidity
· Dependency on a small number of partners
· Pension scheme funding
· Global economic and political conditions
· ERP system
· Regulatory and legal
· Brand, reputation and relationships
· Personnel and talent
Directors' Responsibility statement
The Directors are responsible for preparing the Interim Results for the
26-week period ended 27 September 2025 in accordance with applicable law,
regulations and accounting standards. The Directors confirm that to the best
of their knowledge the condensed consolidated interim financial statements
have been prepared in accordance with IAS 34: 'Interim Financial Reporting',
and that the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely:
· an indication of the important events that have occurred during the
first 26 weeks of the financial year and their impact on the condensed
consolidated interim financial statements, and a description of the principal
risks and uncertainties for the remaining 26 weeks of the financial year; and
· material related party transactions in the first 26 weeks of the
year and any material changes in the related party transactions described in
the last annual report.
The Directors of Mothercare plc are listed on page 48 of the Mothercare plc
Annual Report and Financial Statements 2025. A list of directors is maintained
on the Mothercare plc website at: www.mothercareplc.com. With the exception of
today's announcement, there have been no changes since the publication of the
Annual Report.
By order of the Board
Clive
Whiley
Andrew Cook
Chairman
Chief Financial Officer
22 December 2025
Shareholder information
Financial calendar
2026
Preliminary announcement of results for the 52 weeks ending 28 March 2026 September
Issue of report and accounts September
Annual General Meeting September
Announcement of interim results for the 26 weeks ending 26 September 2026 November
Registered office and head office
Westside 1, London Road, Hemel Hempstead, Hertfordshire HP3 9TD
www.mothercareplc.com (//www.mothercareplc.com)
Registered number 1950509
Group Company Secretary
Lynne Medini
Registrars
Administrative enquiries concerning shareholders in Mothercare plc for such
matters as the loss of a share certificate, dividend payments or a change of
address should be directed, in the first instance, to the registrars:
Equiniti Limited
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Telephone 0371 384 2013
Overseas +44 (0)121 415 7042
www.shareview.co.uk (//www.shareview.co.uk)
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