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(Sharecast News) - Retailer Mothercare said on Friday that it had struck a new joint venture with Indian firm Reliance as full-year sales dropped amid continued struggles with weak demand post-Covid.
Worldwide retail sales dropped from £322.7m to £280.8m in the 53 weeks ended 30 March. However, Mothercare also said it had recorded a full-year profit of £3.3m, a marked improvement from the prior year's £100,000 loss. Adjusted underlying earnings improved from £6.7m to £6.9m.
Mothercare also revealed it had launched a new joint venture with Reliance Brands, with the new JV set to own the Mothercare brand and related intellectual property assets in India, Nepal, Sri Lanka, Bhutan and Bangladesh. Reliance will hold a 51% stake in the JV, while Mothercare will hold the remaining 49%. Under the terms of the agreement, Reliance acquired its stake for a cash consideration of £16.0m.
Separately, Mothercare announce a refinancing of its existing facilities with GB Europe Management Services and believes that its new secured debt facilities of £8.0m, taken together with the gross consideration of £16.0mfrom Reliance Brands, delivered a de-leveraged Mothercare that can" once more move forward with confidence and invest appropriately" in its future development.
As of 0910 BST, Mothercare shares had surged 60.29% following their restoration to 5.45p.
Reporting by Iain Gilbert at Sharecast.com
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