Full Year Results 2026

Mothercare’s sales and profits fell sharply, despite new joint venture hopes.

What the company is saying

Mothercare plc presents its full year results for the period ending 28 March 2026, highlighting a narrative of transition and future opportunity despite deteriorating financials. The announcement foregrounds the joint venture with Reliance Brands Ltd in South Asia, emphasizing a c£30 million entry valuation and a 49% retained stake, with management expressing belief in significant revenue growth potential. The company stresses operational actions such as a store opening programme targeting fifty new stores in the region and cost savings of £2.1 million. Refinancing and enlargement of £10.0 million debt facilities is presented as a proactive step to support ongoing operations. Management’s tone is measured, acknowledging weak current results but pointing to the potential benefits from the joint venture and sourcing fees. The announcement also includes forward-looking statements about restoring critical mass, dividend resumption when prudent, and ongoing CEO recruitment, but avoids overstatement. There is no attempt to obscure the statutory loss or sales decline, though the narrative leans on future prospects in South Asia.

What the data suggests

The numbers show a marked decline in performance: worldwide retail sales by franchise partners dropped from £230.6 million in FY25 to £180.0 million in FY26, a 22% decrease. Adjusted EBITDA fell from £3.5 million to £1.3 million, while the company moved from a statutory profit of £6.2 million to a statutory loss of £5.0 million. Net borrowings rose from £3.7 million to £5.7 million. The first nineteen weeks of FY27 saw retail sales of £58.5 million, down from £68.8 million in the comparable period, indicating continued weakness. Store count decreased from 372 to 331, and retail space contracted from 915k to 842k sq. ft. Online sales participation rose modestly from 9% to 12%. Cost savings of £2.1 million were achieved, but these did not offset the broader revenue and profit declines. The pension deficit remained flat at £35 million. The joint venture’s entry valuation of c£30 million is a positive capital event, but no immediate financial uplift is evident in the results.

Analysis

The announcement is factual and balanced, with the majority of claims supported by disclosed financial and operational data. While there are several forward-looking statements regarding growth in the South Asian joint venture, store openings, and potential future dividends, these are clearly separated from realised results and are not presented as certainties. The tone does not overstate progress; in fact, the results show declining sales and profitability, which are transparently disclosed. The only significant capital outlay is the joint venture entry valuation and the refinancing of debt, both of which are described factually. There is no evidence of narrative inflation or exaggerated claims relative to the underlying numbers. The forward-looking ratio is moderate, but the language is proportionate and does not hype future outcomes.

Risk flags

• ●Operational risk is elevated due to declining sales, falling from £230.6 million to £180.0 million year-over-year, and a reduction in store count and retail space. This contraction suggests challenges in maintaining market presence and franchise partner performance.
• ●Financial risk is significant, with adjusted EBITDA dropping to £1.3 million and a swing to a statutory loss of £5.0 million. Rising net borrowings to £5.7 million and a flat £35 million pension deficit further constrain financial flexibility.
• ●Execution risk is high around the South Asian joint venture, as management's belief in future growth ('possible for them to grow their retail sales to around £300 million in five years') is not underpinned by binding milestones or committed capital expenditures. The fifty-store opening target is aspirational, and actual delivery is unproven.
• ●Disclosure risk exists where claims about the geographic scope of the joint venture (including Sri Lanka and Bhutan) are not fully supported by the listed locations, and the precise prior size of debt facilities is not disclosed, making it difficult to verify the extent of refinancing or enlargement.

Bottom line

Mothercare’s full year results show a business under pressure, with sharp declines in sales, profit, and store footprint. The company’s narrative leans heavily on the potential of its South Asian joint venture with Reliance Brands Ltd, but the financial benefits are speculative and several years away, with no binding milestones disclosed. Near-term performance continues to deteriorate, and the company is increasingly reliant on debt, with no improvement in its pension deficit. Management’s forward-looking statements are measured but lack concrete evidence of turnaround. For investors, the announcement signals ongoing risk and a need for clear proof of execution—particularly in the delivery of new stores and tangible profit from the joint venture—before any re-rating is justified. The most important takeaway is that current fundamentals are weak, and future upside remains unproven.

Announcement summary

(LSE/AIM:MTC) Mothercare plc announced full year results for the 52-week period to 28 March 2026, reporting worldwide retail sales by franchise partners of £180.0 million and adjusted EBITDA of £1.3 million. Net borrowings at year end were £5.7 million, and statutory loss for the period was £5.0 million. The company completed a joint venture in October 2024 with Reliance Brands Ltd for the South Asian region with an entry valuation of c£30 million, retaining a 49% shareholding in JVCO 2024 Ltd covering India, Nepal, Sri Lanka, Bhutan and Bangladesh. In the first nineteen weeks of FY27, franchise partners recorded total retail sales of £58.5 million. The company successfully refinanced and enlarged its £10.0 million debt facilities on 20 February 2026. The pension scheme deficit remains at £35 million as at 30 June 2026.

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