While we acknowledge that the new management team has successfully pulled some footfall-driving levers in the neglected UK business, we think the share valuation continues to assume UK break-even by 2015. We continue to expect the UK business to lose money over the next three years.
JOHN STEVENSON PEEL HUNT
Good progress has been made in apparel ranges and sell-through, with customer service scores showing progress as management focuses on lifting the underperforming stores. However, pricing in home and travel continues to need more investment, and this will impact future gross margin.
JONATHAN PRITCHARD ORIEL SECURITIES
Strong progress on both the value ranges and the in-store service has helped Mothercare to stabilise sales in the UK whilst these improvements also brought about a pick-up in international sales. We are encouraged by acceleration in online sales and believe it bodes well for price perception.