Baby boom for Mothercare as its ELC purchase pays off
MOTHERCARE said yesterday its profits for the year to the end of March had rocketed almost 10-fold, following the acquisition of children’s retailer Early Learning Centre (ELC).
But the company warned the weakness in sterling could cause problems later in the year.
Pre-tax profits for 2008-2009 at Mothercare were £42.2m, a huge increase on last year’s £4.5m figure, which was hit by costs relating to the acquisition of ELC.
The toy shop was bought for £85m in 2007.
Mothercare also announced it would up its dividend by around 20 per cent.
Group revenues at the company went up by 6.9 per cent to £724m.
But the ailing pound is a concern for the company, as most of its merchandise is bought in dollars.
Chief executive Ben Gordon said he planned to open 100 stores in the coming year, and added that international expansion was key.
“Only one half of one per cent of the world’s babies are born in the UK, so the vast part of our opportunity lies outside of the UK,” he said.
“Given the uncertain consumer environment we are planning cautiously for 2009-10. However, we are well placed as we enter the new financial year,” he added.
Many retailers are struggling as cash-strapped consumers think twice before making a purchase amid rising unemployment, falling house prices and fears of a long recession.
But Mothercare has bucked the trend, as the baby market remains resilient.