Mothercare plc (LSE:MTC) has been notified that a wholly owned subsidiary will receive a further cash dividend of £0.8 million from the liquidation of Mothercare UK Limited, which entered administration in 2019.
The payment will be made to the subsidiary in its capacity as secured lender to the former UK retail business, according to a notification received from the liquidators.
Mothercare said the additional cash represents a positive development for the group’s financial position but does not materially change its current business outlook or the issues previously disclosed to shareholders.
The company continues to conduct a strategic and financial review as it assesses options for the future of the business.
Management cautioned that the outcome of this review remains highly uncertain. The longer-term solvency of Mothercare plc also remains subject to significant uncertainty despite the expected cash receipt.
The £0.8 million distribution therefore does not resolve the financial issues facing the group, and the company has not indicated that the payment will alter the outcome of its ongoing review.
Mothercare has not provided a definitive timetable or announced a conclusion to the review in the latest update.
The company operates as a British brand specialising in products for parents, newborns and young children. Its current business structure follows the administration of its former UK retail subsidiary in 2019.
The anticipated liquidation dividend will provide an additional cash inflow to the group, while the outcome of its strategic and financial review and its longer-term solvency remain unresolved.
Leave a Reply