Shares in Mothercare have risen by over 60% after the baby-products retailer said it had swung back into profitability over the past financial year.
According to a report this week in Retail Gazette, The British company said its pretax profit for the year ended March 26 was £12.1 million compared with a pretax loss of £21.5 million for fiscal 2021.
The company said the “significant improvement” was ahead of market expectations, reflecting its focus on its core international franchise and its brand management.
The baby retailer added that its overall revenues were impacted by its decision to exit the Russian market in March, following the nation’s invasion of Ukraine.
The retailer said it expects to suffer a £6 million hit to its fiscal 2023 earnings as a result of the suspension of sales in Russia.
In March Mothercare that Russia represented around 20%-25% of its worldwide retail sales and had been previously expected to contribute around £500,000 per month to the group’s profit.
“Whilst mindful of the inflationary global economic environment, we are now focused on restoring critical mass and optimizing the Mothercare brand globally over the next five years,” the company said.
Mothercare chairman Clive Whiley said: “The year under review was bookended by the Covid-19 pandemic and the Ukraine conflict, however, despite the persistence of these difficult global challenges, we have begun to demonstrate the potential of Mothercare as an asset light global franchising business.”