Mothercare Plc : Annual Financial Report
Mothercare PLC Annual Financial Report
To the London Stock Exchange 30 June 2017 Mothercare plc ("the Company") ANNUAL REPORT AND FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL MEETING In accordance with the requirements of Rule 6.3.5R of the Disclosure and Transparency Rules ("DTR") of the UK Financial Services Authority, the Company will today publish the following documents on its website, www.mothercareplc.com: The Annual Report and Accounts for the year ended 25 March 2017;
Notice of Annual General Meeting of the Company which is to be held at 11.00am on Monday 31 July 2017 at the Company`s office at Cherry Tree Road, Watford, Hertfordshire, WD24 6SH; and Notice of General Meeting of the Company which is to be held at 11.30am on Monday 31 July 2017 (or as soon thereafter as the AGM shall have finished) at the Company`s office at Cherry Tree Road, Watford, Hertfordshire, WD24 6SH In accordance with LR 9.6.1R and LR 9.6.3R copies of these documents will shortly be available for inspection via the National Storage Mechanism located at www.morningstar.co.uk/uk/nsm. We also attach to this announcement, a description of the principal risk factors as required by DTR 6.3.5 and a responsibility statement as required by DTR 4.1.12 and as set out in the financial statements for the year ended 25 March 2017. The Company`s preliminary statement, including information of a type required to be disseminated in a half-yearly report, was announced on 18 May 2017 and is available to view at the Company`s website: mothercareplc.com/financial-reports. Principal Risks and Uncertainties - extracted from pages 28 to 33 of the Company`s Annual Report and Accounts for the year ended 25 March 2017. Key: ^ increase in risk over the year = no change
Risk description | Impact | Mitigation | Change on last year |
The anticipated turnaround of the Group`s UK business may not be achievable if it fails to implement effectively key aspects of its new strategic plan. | The Group is unable to compete with other key players in the UK, including multi-channel retailers as well as internet only businesses causing the Group`s in-store sales to decline and reduce profits. | Rigorous project governance managing the key spend areas of store refurbishment and IT systems with audit oversight. |
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The Group may be affected by challenging economic conditions and political developments affecting the International markets in which it operates. | Economic and political uncertainty enveloping eastern/southern Europe, oil based economies, and those dependent on China could have a material adverse effect on the Group`s business. | Working with franchise partners to manage benefits to be gained with International markets given the continued devaluation of sterling since the Brexit vote. | = |
The Group`s results of operation may be affected by foreign exchange risk as a result of the devaluation of sterling since the Brexit vote. | Hedging foreign exchange does not eliminate the Group`s exchange or interest rate risks entirely and may not be fully effective given the impact on sterling since June 2016. Any significant losses on the Group`s hedging positions could have a material adverse effect on the Group`s business, results of operations or financial condition. | Ongoing review of the pricing position compared to competitors. | ^ |
The Group is materially dependent on a small number of franchise partners that make up a significant proportion of its International business. | Any damage to, or loss of, the Group`s relationship with Alshaya or any of its other key franchise partners could have a material adverse effect on the Group`s business, results of operation or financial condition. | Strong personal and business relationships built up over a long time with key franchise partners. |
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The Group`s brands and reputation are key to its success both in the UK and internationally; any damage to the Group`s brands or concerns relating to its products (including their quality or safety) could have a material adverse effect on the business. | Any perceived or actual concerns related to the Group`s products or products by key suppliers, supply chain or its franchise partners and/or its wholesale customers may be widely disseminated online, on consumer blogs or other social media sites or via print or broadcast media. Similarly, any litigation that the Group may face could subject it to increasing negative attention in the press and cause considerable reputational damage. | Focus on fewer products, enabling strengthening of quality measures in place. |
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The Group`s business is materially dependent on its ability to source products successfully from its suppliers, most of whom are based outside the UK. | If the Group is unable to secure ongoing support, or attractive commercial terms from its existing suppliers, or is unable to find replacement suppliers in the event of a particular source of supply no longer being available, this could have a material adverse effect on the Group`s stock management, profitability and competitiveness and may result in a loss of market share. | Corporate Responsibility Sourcing team in place who conduct audits across all existing and new suppliers. | ^ |
The Group relies on its manufacturers, suppliers and distributors to comply with employment, environmental and other laws. | If the Group is unable to monitor manufacturers, suppliers and distributors in relation to compliance with relevant laws, it may inadvertently result in non-compliance against Group policies. | Conflict of interest self-certification is required. | = |
The Group relies on its ability to improve existing products and successfully develop and launch new innovatory products. | Failure to bring new innovatory product to the market may have a material adverse effect on the Group`s business, results of operation or financial condition. | Critical path management has been developed and embedded. |
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The Group`s future success depends on the performance of its key senior management and the ability to attract and retain high quality and highly skilled personnel. | Any failure to attract and retain key personnel to meet the Group`s operational needs may delay or curtail the achievement of major strategic objectives and could have a material adverse effect on the continuity of the Group`s operations. | Shave save scheme open to all employees. |
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Any unauthorised access or disclosure of confidential information stored or obtained by the Group, either by criminal cyber-attack or a speculative loner, could have a material effect on its business. | If any third party with whom the Group interacts violates applicable laws or the Group`s data protection policies, whether intended or not, could result in legal claims or regulatory action, which may subject the Group to liability and litigation. | A dedicated Cyber Security Manager has been appointed and is strengthening all data related IT security. |
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The Group supplies and sources its products and operates in a number of countries in which bribery and corruption pose significant threats. | The Group also deals with a significant amount of cash in its operations and is subject to various reporting and anti-money laundering regulations. Any violation of money-laundering laws or regulations by the Group could have a material adverse effect on its business, reputation or results of operation. | Company Code of Conduct and Conflict of Interest - compliance self-certification. |
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The partnership with China is key to the Group`s International strategy, since it is financially invested in the partnership and any change to the China operations could have a detrimental impact on the Group. The Group also trades with the JV and is therefore also exposed to debt. | The Group would be financially impacted should the China partnership break down. | A strategic review of the JV has been completed and shared with the Executive and JV partner highlighting actions required to improve performance. | ^ |
Directors` responsibility statement The following information is extracted from page 97 of the Company`s Annual Report and Accounts 2017. We confirm that to the best of our knowledge: the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company`s position and performance, business model and strategy. The directors of Mothercare plc are listed on page 526 in the annual report and accounts and on the Company`s website at mothercareplc.com. Email: investorrelations@mothercare.com
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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mothercare Plc via GlobeNewswire
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