Nov 23 (Reuters) - Shares in Mothercare Plc plunged more than 20 percent to their lowest in 14 years after the British baby goods retailer swung to a first-half loss and warned of weak trading in its international business.
The group’s adjusted loss before tax for the 28 weeks to Oct. 7 came in at 0.7 million pound, compared with a profit of 5.9 million pounds ($7.9 million) last year.
The results were dragged down by weakness in the company’s international business even as it spends heavily to revive sales at its UK stores amid stiff competition.
UK like-for-like sales were up 2.5 percent in the first half, but high expenses at the business resulted in a 9.6 million pound adjusted loss.
Total international sales fell 1.7 percent, while profit slumped 28 percent to 14.9 million pounds.
The Middle-East region, where Mothercare operates 350 stores, remained a concern for the company as people spent less at its stores.
“Middle East is dragging down our overall performance overseas; there is no clear sight as to when things will bottom out in that region,” the retailer said.
Mothercare also pointed to weakness in the UK, heading into the crucial holiday shopping period.
“Towards the end of the reporting period, and in subsequent weeks, we have seen a softening in the UK market with lower footfall,” Mothercare said.
Shares in the 56-year-old retailer were down 16.1 percent at 70 pence at 1111 GMT. ($1 = 0.7519 pounds) (Reporting by Rahul B in Bengaluru; Editing by Saumyadeb Chakrabarty)