THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN EU REGULATION NO 596/2014 AND IS MADE IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF THAT REGULATION
Mothercare plc
Notice of Intent to Appoint Administrators to Mothercare UK Limited
Mothercare plc ("Mothercare" or the "Company") announces that Notices of Intent to appoint administrators to the Company's active trading subsidiary, Mothercare UK Limited ("Mothercare UK") and Mothercare Business Services Limited ("MBS"), which provides certain services to Mothercare UK, are being filed with the Court today. It is emphasised that the Company and its other subsidiaries (together the "Group") are not covered by these notices of intent. The Group, Mothercare UK and MBS will be free to continue to trade in the normal course of business.
As stated in May at the time of our final results for the period ended 30 March 2019, this financial year's key strategic aim was to progress the next phase of our transformation of the Group's business. This comprised two key and related elements. First, to secure a financial structure for the whole of the Mothercare Group which maintains a sustainable business model with a capacity to secure future growth. Second, to evolve, adapt and optimise the structure, format and model for our UK retail operations. The Company operates a successful global brand business generating over £500m of revenues each year from over 1,000 stores internationally in over 40 territories in which the Mothercare brand operates. In the financial year ended March 2019, the brand generated profits of £28.3m internationally whereas the UK retail operations lost £(36.3)m. The Company's primary objective has been to seek to preserve value for as many stakeholders as possible, as we strive to optimise the level of sustainable long-term revenues for the Group going into FY21 and beyond.
Since May 2018, we have undertaken a root and branch review of the Group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK Retail business. Through this process, it has become clear that the UK Retail operations of the Group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the Group as it currently stands and/or attractive enough for a third party partner to operate on an arm's length basis. Furthermore, the Company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.
These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group. Plans are well advanced and being finalised for execution imminently. A further announcement will be made in due course.
ENDS
Mothercare plc
Mark Newton-Jones, Chief Executive Officer 01923 206004
Glyn Hughes, Chief Financial Officer
MHP Communications:
Simon Hockridge, Tim Rowntree, Alistair de Kare-Silver 020 3128 8789 / 8742
