Mothercare profits up 7.6%

Mothercare has toasted a "milestone" year after annual profits rose 7.6% and it boosted growth prospects with the takeover of the Early Learning Centre.

Underlying pre-tax profits reached £22.6m (€33.39m) in the year to March 31, as like-for-like sales in the UK were up 1.6% on the previous year.

The improvement came after the babycare retailer improved its own label products and strengthened its position as a specialist retailer..

As part of the drive, Mothercare grew its share of the pushchair market and now boasts the largest collection of Mothercare and branded pushchairs available online in the UK.

Mothercare announced plans to purchase the Early Learning Centre last month and is waiting for regulatory clearance from the Office of Fair Trading.

At the same time the group saw strong growth at its international operations as like-for-like sales increased by 12%.

Profits rose by 52.8% at the division after it opened 62 franchises overseas, bringing its total stores to 328 in 38 countries.

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."

During the year, the group opened four stores in the UK and closed 10 as well as downsizing its two biggest out-of-town stores - Reading and Cardiff - as it moved to cut operating costs and make the most of its store space.

The firm said it planned to relocate or downsize a further 30 Mothercare stores in the current year, while concentrating on its out of town formats.

Improvements to its online business, following the relaunch of its website in November, saw sales up by 16.3% in the period to £47.8m (€70.6m).

The group said it believed the business had significant potential for future growth.