Mamas & Papas sees profits rise but warns of 'difficult trading conditions' ahead

The Huddersfield-headquartered company, which designs, manufactures and sells products for the baby and toddler market, said profit after taxation almost doubled to £716,000 compared to £432,000 the previous year.

Consolidated operating profit before tax and interest was £2.7m in the 12 months ending March 27, 2022, compared to £2.5m in 2021.

In its latest accounts submitted to Companies House this week, the group said sales increased by 35 per cent, partly due to stores reopening after Covid, and partly due to increased market share driven by extended product ranges and increased retail space.

Mamas & Papas said it continued to benefit from the liquidation of the market leader in the UK nursery market, Mothercare UK, in January 2021.

The group opened nine new concession stores during the year, through its strategic partnership with Next, and launched new own-brand and branded products, which it said had contributed to a ‘considerable growth’ in market share over the 12-month period.

New locations included Maidstone, Chelmsford, Crawley, Oxford, Ipswich, Peterborough, Cheltenham and Poole, creating hundeds of new jobs.

It said that international wholesale sales increased but at a slower rate as Covid-19 continued to have an impact on sales in countries around the world due to various lockdown periods and trading restrictions.

The group’s sales and profit performance also generated sufficient cash to allow the group to repay £7m of shareholder loans during the year.

Mamas & Papas said that trading since March 27, 2022 had been ‘strong’ with significant growth year-on-year, primarily due to the nine concession stores opened during the year, sales from a further 10 concession stores that have been opened post-year and increased product ranges.

In the director’s report, chief executive Mark Saunders said: “The group is focused on growth opportunities across the network of own-brand wholesale customers in the UK and the Republic of Ireland.

"In international wholesale, Covid continues to have an impact on sales as countries around the world have various lockdown periods and trading restrictions.”

Mr Saunders added: "Trading is ahead of the prior year and the easing of travel restrictions has allowed face-to-face visits to our customers to recommence.”

The group said it continues to invest in product development for the nursery industry. New products launched during the year included its Airo lightweight pushchair, its Lua bedside crib, and Bug seating product. Sales of the latter two ‘significantly’ exceeded initial sales targets, it said.

However, Mr Saunders warned of ‘difficult trading conditions ahead. “The impact of inflation on consumer spending is becoming more pronounced leading to pressure on both sales and margin,” he said.

"In addition the inflation caused by the ongoing uncertainty in Ukraine and a continued weak sterling is increasing business costs. The directors continue to monitor the situation closely and will take appropriate measures to react to market conditions as required.”

The report added that the directors did not recommend payment of a dividend.