NEWS

Mothercare narrows pension deficit as financial outlook improves

Published on: 17th June 2016

The company’s annual report has revealed that its defined benefit pension scheme deficit has been reduced by around £7m in the 12 months to March.

Mothercare-480On 26th March, the scheme’s assets stood at £287.5m, with the liabilities totalling £361.9m. This leaves a deficit of £74.4m, down from £81.2m in March 2015. Years of difficult trading conditions had seen it jump from £55.8m in 2014.

Like-for-like sales increased by 3.6% in the last financial year. Underlying profit before tax rose by 51% to £19.6m.

However, a stronger financial year will have calmed the nerves of the company’s 6,000 employees and those who have already retired from the scheme.

Mothercare chief executive, Mark Newton-Jones, commented: “The results highlight the significant progress we are making towards returning the UK to profitability,” he said. “Nearly 40% of the store estate is now in the new and much improved format, and the feedback from customers continues to be positive. This sales growth is not at the expense of gross margins, which have also returned to growth. There is still much to do, but we are encouraged by our maintained trajectory towards profitability in the UK.”

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