Mothercare (LON: MTC), the AIM-listed brand licensor that earns royalty income from international franchise partners after exiting UK retail administration in 2019, swung to a statutory loss of £5.0m for FY26, the 52 weeks to 28 March 2026, against a £6.2m profit a year earlier. The shares closed at 0.70p on Friday 14 August, the day the results were released.
That marked a 17.6% fall from 0.85p at Thursday’s close, and left the stock just above its 52-week low of 0.6p, far below the 3.9p high of the past year. The move left Mothercare’s market capitalisation at under £4m.
Mothercare said revenue fell 42% to £22.4m, down from £38.9m in FY25, as worldwide franchise partner retail sales, the total sales generated by its overseas licensees, dropped 22% to £180.0m. The company attributed the decline to continuing disruption in the Middle East, including the impact of the Iran war, and the end of its exclusive UK distribution arrangement with Boots at the end of 2025. Basic loss per share came to 0.9p, against earnings per share of 1.1p in FY25.
The results deepened balance-sheet strain already flagged to markets. Net liabilities widened to £10.9m from £9.4m, leaving the group with negative equity. Its £8.5m loan facility from CTM Funding has breached its covenants and is technically repayable on demand, prompting auditors to flag material uncertainty over going concern.
Chairman Clive Whiley said: “The recent financial performance has been resilient as we look to FY27, acknowledging the ongoing situation in the Middle East and the end of our arrangement with Boots in the UK alongside our progress in other markets. We remain in discussions to restore critical mass, a process greatly assisted by our successful refinancing and better alignment of the first-charge debt instrument with our equity.”
Management is pointing to its South Asia joint venture with Reliance Brands, the licensing arm of Reliance Industries, and its 10-year licence with Turkish retailer Ebebek as the route back to scale. Neither offsets the FY26 loss, leaving the going-concern warning as the immediate issue for a stock trading deep within its 52-week range.