Maternity specialist Mothercare, which new chief executive Mark Newton-Jones aims to turn around, has posted first-half numbers.

“Interim profit before tax of £3.3m met expectations. UK gross margin has held firm for the first time since 2008, while early changes to product lines and store formats appear to be gaining traction.

“International markets remain strong, with double-digit space gains and like-for-like sales growth in all regions.

“New chief executeive Mark Newton-Jones is clearly focused on delivering a sales and margin led recovery; early signs are encouraging. John Stevenson, Peel Hunt

“On our calculations, Mothercare still has to achieve a significant recovery in sales densities before store trading margins can recover and is probably still suffering from lower margins in travel goods plus more competition from internet operators, like Amazon.com.

“The shares remain overvalued on current ratings and the UK recovery and international margins both remain at risk.” Mike Dennis, Cantor Fitzgerald

“Mothercare’s half-one results have come in a touch below expectations. Whilst lower UK operating losses are encouraging, the slowdown in sales over the last eight weeks without a commensurate uplift in gross margin is troubling.” Anjli Shah, Oriel

“While recovery in the UK business remains uncertain, even following the recent capital raising, we see considerable
value in the group given its International business.

“Despite significant recent currency headwinds, the international business continues to grow and benefits from a
franchise model which demands relatively low levels of capital to be employed.” Alexander Mees, JP Morgan Cazenove

“The group is now focused on completing the store rationalisation process, and undertaking a long-overdue store
refit and infrastructure modernisation programme.

“We think that a normalisation of the competitive backdrop, coupled with a more pragmatic, retail-based approach, should significantly reduce the UK operating loss over the next few years, allowing investors to focus on the successful International business.” Matthew Taylor, Numis

Mothercare reduces UK losses as turnaround continues