Mothercare bringing up profits to £22.6m

MOTHERCARE, the specialist mother and baby goods retailer, said its underlying pre-tax profit jumped by 7.6 per cent to £22.6 million in what had been a "milestone" year for the business.

And it also outlined plans for further expansion of its overseas operations, which already boasts more outlets than its domestic portfolio.

Overall sales rose by 3.3 per cent to 498.5m after the group opened a number of new international stores and launched a new e-commerce plan.

The group, which added the Early Learning Centre chain to its business last month in an 85m takeover, said it was confident the growth it saw last year would continue over the current year.

Among the trading highlights was a 1.6 per cent uplift in UK like-for-like sales - including a 0.8 per cent rise from its 229 stores.

It also scored a 30.2 per cent increase in its international revenues to 87.1m after opening 62 overseas stores during the reporting period, with like-for-like sales up 12 per cent.

Also proving successful was Mothercare's Direct to Home internet and mail order service which saw sales grow by 16.3 per cent to 47.8m.

Chief executive Ben Gordon said: "With the completion of a number of major projects in the year, 2006/07 represents a key milestone in the transformation of Mothercare.

"We launched our new bespoke e-commerce platform, completed the move to our new national distribution centre, grew like-for-like sales in the UK and continued to improve margins. We also opened a record 62 international stores, boosting this rapidly growing business."

Mr Gordon said that with a "strong platform" now in place the business - which sells items such as pushchairs, cots and baby clothes - would focus further on growth adding that he was "confident that the business will continue to develop strongly during the coming year".

"We also look forward to the future growth opportunities we anticipate from the proposed acquisition of the Early Learning Centre announced last month," he added.

Mothercare has also been looking to streamline its business in the UK.

Over the year it has opened one new store opened, three outlets were re-sited, while two of its largest stores were downsized and seven stores were axed.

"Positive like-for-like sales in the UK more than offset the effects of planned space reductions associated with our successful UK store right-sizing programme," the group commented in a statement.

But the group is also looking to expand its international operations, which currently stand at 328 franchise stores in 38 countries.

"During the current financial year we expect to open at least 50 more new international stores, the majority of which will be in existing markets," said Mr Gordon.

"Last year we opened our first stores in India and we plan to open 100 stores here in the next five years.

"We also plan to open new stores in countries where we do not currently trade including Egypt, the Philippines and Armenia."