Mothercare announces fall in profits

Mothercare posted a 52% fall in half-year profits today after the retailer took a hit from its acquisition of the Early Learning Centre (ELC).

The company, which has several outlets in Ireland, booked losses of £2.9m (€4m) from the first 16 weeks of its ownership, on top of a £4.4m (€6.1m) charge for restructuring the business.

As a result, pre-tax profits fell to £6.1m (€8.5m), although Mothercare said its underlying performance without the toy chain showed a 11% rise to £13.4m (€18.6m).

Like-for-like sales were ahead 2.5% in the 28 weeks to October 13, with Mothercare up 2.8% in the first half and ELC ahead by 1.9% since the £85m (€118.3m) acquisition in May.

It added that the integration of ELC was proceeding to plan, with 50 Mothercare stores due to carry ELC products through the festive period. The London office of ELC has also been closed, with plans in place to restructure its Swindon head office.

ELC traditionally makes losses in the first half of the year, with today’s results from Mothercare showing a deficit for the period of £7m (€9.7m).

Chief executive Ben Gordon said it had been a “transformational” time for the group.

He added: “Our UK and international businesses are continuing to perform well and we are delighted to have completed the acquisition of Early Learning Centre.”

The company said it entered the second half of the year in good shape, although it remains cautious about prospects for UK consumer spending.