Mothercare's share price has soared more than 10.3 per cent this morning after posting its first statutory profit in five years.
Revenues dropped 4.5 per cent worldwide to £1.15bn, with the international market continuing to be "challenging". However total UK sales were up 0.3 per cent to £459.7m, with like-for-likes up 3.6 per cent.
Group pre-tax profit, after exceptionals, came in at £9.7m for the year to 26 March - compared with a loss of £13.1m last year. Group underlying profit rose 51 per cent to £19.6m.
Why it's interesting
Chief executive Mark Newton-Jones was parachuted into Mothercare just over two years ago, charged with rescuing the faltering business. He has implemented a major turnaround strategy, and while not all of the elements have come together - most notably on the international side - the baby-focused retailer is clearly taking its first big steps.
What Mothercare said
Newton-Jones said: "I'm pleased to report that two years into our turnaround strategy we have recorded a 51 per cent growth in underlying profit before tax and the delivery of our first statutory profit in five years."
"The results highlight the significant progress we are making towards returning the UK to profitability. Improvements to our customer offer, both in store and online, and the look and feel of the store estate are driving like-for-like sales growth for a second consecutive year.
"Nearly 40 per cen 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."
"Conditions for our international business remain challenging. The issues are primarily at a macro level, with economic and currency headwinds persisting. While we recognise these pressures, we believe that we can also make some improvements in how we operate.
"We are exiting underperforming stores whilst continuing to grow space where there is potential for long term growth. We are also taking the lessons learned from our success in the UK and exporting them to our international markets. This is strengthening our international operations and improving the management of our brand globally.
"Our vision remains clear: to be the leading global retailer for parents and young children."
Mothercare is taking baby steps towards recovery.