Mothercare warns over risk to future trading as sales plunge

Struggling baby products firm Mothercare has warned there is a “material uncertainty” over its future if trading conditions worsen.

Shares in the company fell by 17% to 0.75p on Friday as it revealed tumbling revenues, driven by uncertainty in the Middle East and the end of its UK supply deal with Boots.

The London-listed company, which primarily runs international franchises and makes products to supply for retail, stressed that it believes it has “sufficient cash” to operate for the next 12 months.

But the latest annual accounts showed that the company would “have insufficient cash” at certain time period if “trading conditions were to deteriorate” or it was unable to improve its cost and cash management sufficiently.

They suggested the company might not meet its liabilities and may need to secure extra funding, if this situation were to take place.

The company’s auditors therefore found there is “is a material uncertainty that casts significant doubt that the group will be able to operate as a going concern” without new funds.

On Friday, Mothercare reported that total revenues dived by 42% to £22.4 million for the year to 28 March, compared with a year earlier.

It came as global sales by international franchise partners dropped significantly over the year, driven by the conflict in the Middle East.

Sales were also dented by the end of an exclusive distribution relationship with Boots at the end of 2025.

Meanwhile, the company also slid to a £4.3 million pre-tax loss for the year, compared with a £11.9 million profit a year earlier.

The accounts also showed that its net debt grew to £6.4 million from £4.5 million a year earlier.

Mothercare shut all its remaining 79 UK stores in 2020, ending its 59-year presence of the high street.

The company pivoted to focus on its large international franchise business and continued to make products for other retailers.