Mothercare reduced its defined benefit pension scheme deficit by around £7m in the 12 months to March , the company’s annual report has revealed.
The scheme’s assets stood at £287.5m on March 26, with the liabilities totalling £361.9m, the report showed. This leaves a deficit of £74.4m, down from £81.2m in March 2015. Years of difficult trading conditions had seen it jump from £55.8m in 2014.
But a stronger financial year will have calmed the nerves of the company’s 6,000 employees and those who have already retired from the scheme.
Underlying profit before tax rose by 51% to £19.6m and like-for-like sales increased by 3.6% in the last financial year.
Mothercare chief executive Mark Newton-Jones said he was pleased with the company’s performance as it is “two years into our turnaround strategy”.
“The results highlight significant progress we are making towards returning the UK to profitability,” he said. “Nearly 40% of the store estate is now in the new and much improved format and the feedback from customers continues to be positive.
“This sales growth is not at the expense of gross margins, which have also returned to growth. There is still much to do, but we are encouraged by our maintained trajectory towards profitability in the UK.”