British maternity and babywear retailer Mothercare is back in the black.
In the 52 weeks to March 26, the company swung to a profit of 12.1 million pounds from a loss of 21.5 million pounds a year earlier.
It comes after Mothercare put its UK business into administration in 2019, which saw it close all 79 of its stores and launch a “more sustainable and less capital-intensive” business model from the AW20 season onwards.
The company said Tuesday its return to profitability “reflects ongoing strategic transformation into an asset-light, global franchising business”.
International retail sales by franchise partners increased 7.5 percent during the year to 385.3 million pounds.
However, group revenue fell 3.8 percent to 82.5 million pounds.
Mothercare shares jump on FY results
Shares in the company jumped more than 60 percent at one point following the news on Tuesday.
Mothercare chair Clive Whiley told investors: “The year under review was bookended by the Covid-19 pandemic and the Ukraine conflict, however, despite the persistence of these difficult global challenges, we have begun to demonstrate the potential of Mothercare as an asset light global franchising business.
“This represents an inflection point for the business, with the combined benefits of more normalised circumstances and the updated financing arrangements greatly enhancing our financial flexibility.
“Accordingly, whilst mindful of the global inflationary environment and its impact on both consumers and the business we remain positive on the long-term prospects for the Mothercare brand.”