Mothercare (MTC) : Corp

H1 results largely academic. The future is international.

Key data

  • Share price (p) 13.4
  • Target price (p) U/R
  • Market cap (£m) 50.3
  • Enterprise value (£m) 82.1

Today’s H1 results (to 12 Oct) are somewhat academic as the numbers produced are under the old structure (including the UK business, which was put into administration on 5 Nov). The real interest is therefore threefold. MTC has sufficient liquidity to (1) trade through the 3 month transition period to allow the new operating model to stabilise post the Nov 5 transformation, (2) finance its working capital requirements, and (3) fund the move to being a cash-generative, asset-light brand orchestrator singularly focused on its global international franchise business/partners. We will update our FY20 estimates post further conversations with management to (1) reflect the financial impact of the restructuring post, and (2) noting management commentary that discussions continue to establish a UK franchise partner.

Peter Smedley 020 7220 0548

Photo-Me (PHTM) : Corp

Focused on building Laundry market presence

Key data

  • Share price (p) 86.8
  • Target price (p) 150.0
  • Market cap (£m) 328.1
  • Enterprise value (£m) 308.5

Photo-Me’s H1 results are solid with sales up +3.3% (-1.4% underlying), adj. PBT up +6.7% and FCF up +24.9%. Continental Europe led this growth through the acquisition of Sempa, the continued roll-out of Laundry and a better-than-expected photobooth performance in France. This was partly offset by challenges in the photobooth market in the UK. We expect these trends to continue, make no major changes to our full year forecasts and continue to highlight the 10% dividend yield (the interim dividend was held as expected) and the £25m net cash balance.

Guy Hewett 020 7220 0549

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