Shares of Mothercare Plc (MTC.L) surged about 18 percent on Thursday morning, after the company detailed its three-year growth plan, including an increase in international sales growth to 20 percent and reduction of non-store costs by 20 million pounds by fiscal year 2015.
However, the company posted a loss for the fiscal ended March 31, and said it is not anticipating any gains in gross margin in fiscal 2013.
Simon Calver has now joined as chief executive and said he has been fully involved in the formulation of the company's 'Transformation and Growth plan.'
Mothercare noted that International has continued to grow rapidly, but the UK has struggled in the face of a challenging economic backdrop and an increasingly competitive environment. Total international sales increased 17.8 percent and like-for-like sales were 6.1 percent.
Meanwhile, total UK sales declined 4.6 percent and like-for-like sales dropped 6.2 percent. Looking ahead, the company expects the consumer environment to remain difficult in the UK.
Mothercare operates as a retailer and wholesaler of products for mothers, mothers-to-be, babies and children.
Announcing its preliminary results for the 53 weeks, the company said its loss before tax was 102.9 million pounds, compared to a pre-tax profit of 8.8 million pounds reported last year. Underlying profit before tax plunged to 1.6 million pounds from 28.5 million pounds a year ago.
On a per share basis, loss was 105.2 pence, in comparison with earnings of 7.4 pence per share in the previous year.
Revenues for the year grew to 812.7 million pounds from 793.6 million pounds in the preceding year. Worldwide network sales improved 6.4 percent. Group sales, which reflects UK revenues and payments it receive from International partners were up 2.4 percent.
As announced in April, the board has decided to suspend dividend until the company's "Transformation and Growth" plan delivers a marked improvement in its results and no final dividend will be paid.
Worldwide, the group has 1,339 owned and franchised stores in 59 countries.
MTC.L is currently trading at 194.82 pence, up 30.32 pence or 18.43 percent, on a volume of 434 thousand shares on the LSE.
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by RTT Staff Writer
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