BABY goods retailer Mothercare has beaten full-year profit forecasts and said improved trading had continued into its new financial year, raising hopes a turnaround drive is taking hold and sending its shares up as much as 20 per cent.
The firm, which has been hit hard by cut-price competition from supermarket groups and online retailers in its main UK market, has been trying to fight back by revamping stores, closing weaker ones and expanding online and abroad.
Yesterday it reported an underlying pretax profit of £9.5 million for the year ended March 29.
That was a 61 per cent increase on a restated £5.9m a year earlier and ahead of analyst forecasts of £8.3m, due to lower financing costs.
Sales in Britain fell 1.9 per cent on a like-for-like basis, improving on a 3.6 per cent fall a year earlier, with losses narrowing 0.5 per cent to £21.5m.
In its stronger overseas arm, profit rose 7.6 per cent to £45.3m, with underlying sales up 2.5 per cent.
"Mothercare is making progress towards breakeven in the UK in due course and has laid the foundations for further positive growth in international in the year ahead," JP Morgan analysts said in a research note.
The group, which has over 1,200 stores worldwide, said a search for a new chief executive was ongoing.
The firm named ex-Shop Direct boss Mark Newton-Jones as its interim chief executive in March, after Simon Calver quit in February following weak Christmas trading.
Mothercare said it had agreed with lenders to increase its debt facilities by £10m to £100m, just seven months after its last refinancing.