Mothercare reports strong first half

Firm announces results for 28 weeks ended October 10th; Unveils store portfolio restructure plans.
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The retailer's growth strategy is delivering results as UK sales rise 2.7 per cent and underlying profit is up 15.4 per cent.

A new phase of store portfolio restructure was also announced, which the firm hopes will create an additional £10m per annum of benefits by 2012.

A record first half was reported for International sales as retail sales rose by 29.6 per cent and underlying profit was up by 53.2 per cent.

Following news that Mothercare has accelerated its expansion plans in India, the retailer has also announced plans to launch in Australia (Mothercare) and South Africa (Early Learning Centre) and to have ten stores in China this year.

62 overseas stores were opened in H1 and the full year target has now grown to 115 (previous guidance 100).

The first half has seen a rapid growth in Direct sales, which were up 15 per cent to £58m. During the period, the retailer acquired the remaining 50 per cent of gurgle.com, the social networking site for parents and international e-commerce trials will be launched in H2.

Overall, group sales were up 7.9 per cent to £387.3m (2008: £359.0m) and underlying profit before tax was up 11.1 per cent to £10m (2008: £9m)

Ben Gordon, chief executive, said: "This has been another strong first half for the Mothercare group with sales up 7.9% and underlying profit up 11.1%. International has delivered a record first half with retail sales up 29.6% and store openings ahead of plan.

"As at today we have opened 85 stores this year taking the total number of stores outside the UK to 694. In the UK we have again seen positive like-for-like sales growth with the performance boosted by the success of our property strategy and the rapid growth of Direct.

"With the strength of our two global brands, our rapidly growing international platform, a reducing UK cost base and debt free business, we are well placed as we enter the important second half."

The completion of the integration of the Early Learning Centre has given the firm the opportunity to reset the Mothercare strategy. At the core of the strategy remains the two brands, which are at the centre of value creation at Mothercare and reflect the multi-channel offer.

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