Mothercare's profits fall by 76%

Mothercare plans more out-of-town parenting centres

Mothercare has posted a 76% drop in pre-tax profit to £4.5m, largely due to the cost of integrating its recently acquired Early Learning Centre chain.

However, the acquisition of Early Learning Centre last June did boost annual sales by almost 36% to £677m.

The retailer said it was cautious about UK consumer sentiment, and was banking on expansion overseas and the growth of its online business to boost profits.

It said TV presenter Myleene Klass was to promote a new clothing range.

Stripping out the cost of bringing the Early Learning Centre business into the fold, underlying group profit rose 70% to £39m.

Keith Bowman, an analyst at Hargreaves Lansdown stockbrokers said: "Mothercare continues to brush aside the gloom sweeping across the high street."

International growth

In the UK, it has 225 UK Mothercare outlets and 210 Early Learning Centre shops, but its international presence is bigger with 500 overseas stores. It plans to open new stores in countries with fast-growing economies such as Russia, India and China.

"It's going to add 100 news stores each year. The brand is already known overseas, the question is how quickly can it roll out these stores," said Matthew McEachran, retail analyst at Kaupthing, Singer & Friedlander.

Mothercare shares are up 1.3% at 400 pence.