Mothercare has secured debt facilities of £8m with GB Europe Management Services.
The board of Mothercare believes the new facilities deliver a de-leveraged Mothercare that can move forward with confidence and invest appropriately in the company’s future development.
Clive While, chairman, commented: “Today’s agreements with Reliance and Gordon Brothers strengthen our operations in South Asia and support a material reduction in our bank facilities and leverage.
“We have worked closely with Gordon Brothers for over five years now and value its ongoing support for Mothercare. The revised facility agreement and related arrangements reflect the strength of that ongoing relationship and trust alongside recognising the accretive nature of the joint-venture to our equity valuation. For Mothercare, the reduction in the required facility size, funded by the formation of the joint venture, and the resulting significantly reduced cash interest cost, greatly improves our flexibility for FY25 and beyond.
“Taking today’s developments together with the inherent strength of the business’s brand, we believe Mothercare can approach 2025 and beyond with a renewed and growing sense of confidence at the opportunities ahead, notwithstanding our ongoing cautious shorter term outlook, given the continuing challenges facing our Middle East operations.”
The news came as Mothercare reported its full year results for the year ended 30 March 2024, which showed a 23% drop in sales to £280.8m, compared to £322.7m the previous year.
Adjusted EBITDA for the period rose to £6.9m from £6.7m the year before as the company increased pre-tax profit to £3.3m from a loss of £0.1m in 2023.
Clive added: “We are now focused upon restoring critical mass alongside delivering our remaining core objectives. This is an exciting prospect for our partners, our colleagues and all our stakeholders alike as we finally leave behind the turmoil of recent years.”
