Mothercare profit doubles on international growth

By Rhys Jones

LONDON (Reuters) - Baby goods retailer Mothercare (MTC.L) on Thursday said half-year profit had doubled due to strong performances from its international and online units and that it would continue to expand globally, sending its shares higher.

The firm, with 983 shops in the UK and abroad, posted proforma underlying pretax profit for the six months to September 30 of 9.5 million pounds compared to 4.9 million pounds in the same period last year, as revenue rose 1 percent to 359 million pounds.

Chief Executive Ben Gordon told reporters the group was trading well, despite weaker consumer confidence and the expectation of a prolonged economic slowdown.

"Clearly the environment is uncertain and it's difficult to predict how it's going to be over Christmas. However, we haven't seen any major changes in consumer shopping patterns in terms of the products being bought or people trading down," said Gordon.

Shares in Mothercare were up 5.8 percent at 285 pence by 9:10 a.m., valuing the group at around 240 million pounds.

The retailer said like-for-like sales grew by 0.8 percent during the period, down from 2.5 percent growth in the last half year, as it shed store space to complete the integration of its Early Learning Centre (ELC) acquisition, which should deliver 10 million pounds of annual cost savings by 2010, it said.

The group saw profit rise 6 percent and made a 10 basis point improvement in the gross margin as it tightened costs in its home market.

Seymour Pierce analyst Freddie George called the results solid but said "UK profits were a little disappointing at 7 million pounds," adding that he suspected "growth has slowed in the UK."