Mothercare has temporarily suspended its share trading on AIM due to missed audit deadlines amid ongoing refinancing talks.
- The suspension took effect from 1 October following the company’s failure to release audited financial results by 30 September.
- Mothercare is in the final stages of refinancing, aiming to reduce debt and lower cash financing costs through IP asset monetisation.
- The anticipated audited results for 2023/24 are expected to align with previous guidance, projecting EBITDA above £6.7 million.
- The company continues to face significant challenges in the Middle Eastern market, which remains a key area of concern.
Mothercare has announced the temporary suspension of its share trading on the AIM market, effective from 1 October. This decision follows the company’s inability to meet the deadline for publishing its audited financial results for the fiscal year ending in March, by the 30 September cut-off. As Mothercare navigates its financial restructuring, the suspension underscores the operational strains faced amid this crucial period.
The retailer is in the advanced stages of negotiating a refinancing deal with its existing lender, coupled with efforts to monetise certain intellectual property assets. This strategic move aims to fundamentally recapitalise the business, with a focus on reducing net indebtedness and ongoing cash financing costs. Mothercare has assured stakeholders that audited accounts for the 2023/24 period are slated for publication in the forthcoming weeks, aligning with compliance and reporting standards.
Financial projections are expected to be consistent with the guidance outlined in the trading statement dated 10 May, where the company projected an EBITDA before adjusted items to be marginally above the £6.7 million recorded in the previous year. This projection reflects ongoing efforts to maintain financial stability amidst challenging market conditions, particularly in the Middle East, which contributes 41% of Mothercare’s total retail sales.
Despite attempts to mitigate risks, the company acknowledges that the market challenges in the Middle Eastern region remain largely unchanged as it progresses into the new financial year. The persistent market volatility in this area continues to pose significant risks to Mothercare’s financial performance, necessitating strategic reassessment to safeguard profitability.
The strategic pause in trading reflects Mothercare’s commitment to financial recalibration amidst current fiscal challenges.
