Mothercare confirms talks with lenders "progressing constructively"

Further to the announcement on 2 March 2018, Mothercare Plc has confirmed that the discussions with its lenders on the terms of its existing financial facilities are progressing constructively. The company expects these discussions to conclude before its preliminary results announcement on May 17, 2018. The company also stated that Mothercare's lenders have agreed to defer the testing of its financial covenants due on March 24, 2018 accordingly. Mothercare is also exploring additional sources of financing to support and is in preliminary discussion with the investors.

In its earlier statement, Mark Newton-Jones, Chief Executive Officer of Mothercare plc had said: "The retail sector continues to face a number of pressures that are clearly having a profound impact on the sector as a whole. We are working together with all our stakeholders, including colleagues, franchisees, financiers, suppliers and pensions trustees on this next phase of our transformation and their part in delivering these plans."

Since its trading statement on January 8, 2018, the company said, trading and financial performance has remained broadly in line with the board's expectations and Mothercare now expects net debt at year-end to be slightly better than the 50 million pounds (70.7 million dollars) previously guided, and adjusted group profit before tax to be at the lower end of the previously guided range of 1-5 million pounds (1.4 to 7 million dollars).

On the other hand, the business is also continuing with its planned strategy of reducing the UK store estate whilst increasing digital capabilities, with over 40 percent of the sales now being taken through digital channels.

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