Interim Results

Mothercare PLC
23 November 2000


Interim results for 28 weeks ended 14 October 2000

                         MOTHERCARE ANNOUNCES INTERIM RESULTS

  -  Mothercare plc established 3 August 2000
  -  Sales growth of 4.7%*, like-for-like growth of 2.2%* and growth in
     margin of one percentage point*
  -  Operating profit before exceptionals £1.8m (loss £3.3m)
  -  Sales in five weeks to 20 November up 3.3%*, with like-for-like
     growth of 1.6%*

*ongoing business


Commenting today, Chris Martin, Chief Executive, said:

'Our aim is to drive sustainable profit growth through revitalising the
Mothercare brand - we have an exciting opportunity to make Mothercare the
leading specialist retailer for mothers-to-be and parents of young children.
Although we are pleased to see the initial benefits of the recovery
programme coming through, there is still a significant amount of work to
do.'


Enquiries to:

Chris Martin, Chief Executive,  Mothercare plc          01923 206 187
Susan Gilchrist/Victoria Sabin, Brunswick Group Ltd     020 7404 5959


Results

Progress has been made during the half year in a number of priority areas
key to the Mothercare recovery programme.  This is confirmed by encouraging
early signs as the business returned to profit, with sales growth being
achieved across all channels.

Following the disposal of Bhs and subsequent restructuring of the business,
including the disposal of underperforming stores, the 'ongoing' Mothercare
business is based on 257 UK stores, 167 overseas franchise stores and the
Mothercare Direct channel, comprising the catalogue and web site.  Last
year, on a 52 week basis, the ongoing business achieved an operating profit
of £4.9 million on sales of £400.5 million.  In the first half year of last
year, operating profit in the ongoing business was £1.2 million on sales of
£202.3 million.  In the first half of the current year, operating profit
increased to £1.8 million, including £0.8 million of operating losses from
Mothercare.com.  Sales in the ongoing business increased by 4.7% to £211.8
million, an increase of 2.2% on a like-for-like basis, and gross margin
increased by 1 percentage point.  Overall profit before tax and exceptionals
was £4.0 million.

A net exceptional credit of £4.9 million in the first half relates to the
start-up costs of Mothercare.com, the net profit on disposal of stores, the
Bhs disposal and costs of separation.  With the exception of the
distribution function, the separation from Bhs is now complete.

Earnings per share for Mothercare before exceptional items was 1.4p (2.1p
loss per share).  At this early stage in the recovery of the business, the
board has decided that no interim dividend will be paid.  The board will
look for sustainable profit growth to support a dividend policy going
forward and this will be fully reviewed at the year end.

The balance sheet is strong and will support the investment planned as
Mothercare moves into the second phase of the recovery programme next year.
This second phase will include the move to a new warehouse facility and the
start of the roll-out of the large store, Mothercare World format.

Recovery programme

The strategy to be the leading specialist retailer for the mother-to-be and
parents of young children remains unchanged.  Mothercare aims to offer the
widest range of clothing, hardware and toys for the pre-school child through
three delivery channels: UK stores, Mothercare Direct and Mothercare
International.


The recovery programme is currently in the first phase, with the focus
continuing on three key areas:

     -  building destination ranges for the pre-school child, with a major
        focus on tackling clothing issues;
     -  developing Mothercare World and Mothercare Direct; and
     -  improving operating standards and service.


Restructuring of the business took place in the summer.  This involved
changes in roles and responsibilities at the Watford head office to achieve
clearer accountability for the recovery programme.  The restructure resulted
in the removal of 100 roles.

Following the disposal of Bhs, Mothercare is working with a new logistics
partner, Tibbett & Britten, to move from the Bhs distribution facility at
Atherstone in Warwickshire to a new warehouse in Daventry, Northamptonshire,
which will become operational from June 2001. Mothercare therefore has an
opportunity to re-engineer its supply chain, deriving benefits in terms of
flexibility and product availability. The implementation of this new supply
chain will be a key focus for the business as it moves into the second phase
of recovery next year, underpinning the development of Mothercare's product
ranges and channels.


Building a destination range

Mothercare has successfully built a destination range in home and travel
products, achieving consistent growth in sales and market share over the
last three years, a performance which has continued into the first half.  By
contrast, clothing performance has been poor, largely as a result of trying
to sell too many lines for too wide an age range. Overall clothing
performance stabilised in the first half of the current year, with growth in
babywear offset by a poor performance in older age ranges, from which the
business is exiting.

Clothing accounts for around 40% of Mothercare's sales and the priority for
the business is to develop a destination clothing range using a similar
model to that which has driven performance in home and travel. Mothercare's
clothing ranges will offer value through to premium product, with a mix of
own and sub-brand, and some branded product at the premium end of the range.
Benefits of work undertaken by the new clothing team will begin to come
through in the Spring/Summer 2001 ranges, with the major impact being seen
in Autumn/Winter 2001.

A new direct sourcing team has been established which will result in a
larger proportion of all merchandise being sourced direct from
manufacturers, generating improved margins. The new buying arrangements will
also result in shorter lead times and rapid response in-season.


Developing delivery channels

UK stores
Ongoing UK stores achieved sales growth of 4.5% in the first half.  In
particular, the large-store Mothercare World format continues to perform
well.

The Mothercare World stores provide more for customers in terms of product,
service and expertise and a reference point for mothers.  The concept is
currently being further developed at two stores, Kew (out-of-town) and
Peterborough (high street), to combine improvements in range, environment
and service.  Significant performance improvements are already being seen
and these stores are increasingly becoming the focus for local groups, such
as NCT classes, to meet and share experiences and local information.

Kew and Peterborough will provide the model for the next generation of
Mothercare World stores.  It is intended that the Mothercare World chain
will be expanded from the current 62 stores to at least 100 through a
combination of new locations and re-sites.  This expansion programme will
begin when the new supply chain is in place next year.

Following the closure of the 82 under-performing high street stores, the
ongoing high street chain is benefiting from investment in improving service
and operating standards. The performance of the smaller stores will benefit
substantially from the improving clothing range and new direct ordering
systems.  The roll-out of Mothercare World is likely to include larger city
centre store locations.


Mothercare Direct
Incorporating both catalogue and Mothercare.com, the Mothercare Direct
channel offers customers an additional way to shop and to obtain a wealth of
parenting information and advice.  Mothercare Direct achieved a 28.4%
increase in sales during the half year and, since its 'hard launch' in
September, Mothercare.com has continued to grow its on-line sales and
visitor numbers.  A new on-line partnership between Mothercare.com and
Barclays has recently been agreed to create a 'Family Finance' section on
Mothercare.com.  This will offer financial planning advice and products for
families and expectant parents.

Mothercare has invested in a new call centre and fulfilment facility, which
has dramatically improved service levels.  The integration of the Direct
channels into the Mothercare chain through 'web-enabled stores' will deliver
further improvements in availability and customer service, with up-to-date
on-line product information and ordering available in-store.  This is
currently being trialled in 30 stores and will be rolled out across the
chain next year.

Mothercare International
The international franchise business achieved sales growth of 2.9% in the
first half.  The recovery of the UK business and the success of the
Mothercare brand in the domestic market will underpin the future growth of
the overseas franchise operations, while Mothercare.com  will provide
significant opportunities to strengthen Mothercare's international presence.


Improving operating standards and customer service

Action to address basic operating standards and customer service within
Mothercare continues to be a critical element of the recovery programme and
will underpin the work being carried out on product and channels.

Service levels across the chain are regularly measured through the use of
mystery shoppers, the results of which have shown significant improvement.
There is now in place a continuous programme of staff training and
development and a number of initiatives to reduce administrative tasks which
will enable staff to maximise customer-facing time.

The issue of poor stock availability in stores is being tackled through work
on buying processes and a focus on the top 100 best selling lines. This has
resulted in significant improvements which will be further enhanced when the
new warehouse is fully operational.

In the past, operating standards have been hampered by complex customer
ordering.  These systems are being simplified, while the integration of
Mothercare.com into stores is enhancing customer ordering facilities and
enabling staff to capture sales which would otherwise be lost.

Current trading

Sales in the ongoing business for the first five weeks of the second half of
the year to 20 November increased by 3.3%, 1.6% on a like-for-like basis,
with margins continuing to increase year on year.


INTERIM RESULTS
For the 28 weeks ended 14 October 2000 (1999 - 28 weeks ended 9 October)

                                     Before     Except-                 Before
                                    Except-       ional                Except-
                                      ional       items                  ional
                          Notes       items      Note 2       Total      items
                                       2000       2000        2000       1999
                                         £m         £m          £m         £m
TURNOVER:                                                                    
Mothercare continuing                 211.8                            230.4
Bhs discontinued                       89.9                            370.7
                                   ________                        _________
                                      301.7          -       301.7     601.1
                                   ________   ________    ________ _________
PROFIT/(LOSS) FROM                                                          
RETAIL OPERATIONS:
  Mothercare continuing                 1.8                            (3.3)
  Bhs discontinued                    (6.7)                            (8.3)
                                   ________                        _________
                                      (4.9)      (7.4)      (12.3)    (11.6)
                                                                            
Exceptional items            2            -       12.3        12.3         -
                                                                            
Interest                     3          2.2          -         2.2      (4.1)
                                   ________   ________    ________   ________
                                                                             
PROFIT/(LOSS) BEFORE                                                         
TAXATION                              (2.7)        4.9         2.2     (15.7)
Taxation                     4        (1.2)        1.2           -        4.4
                                   ________   ________    ________   ________
PROFIT/(LOSS) AFTER                                                          
TAXATION                              (3.9)        6.1         2.2     (11.3)
                                   ========   ========    ========   ========
CONTINUING                                                                   
BUSINESS EARNINGS /                                                          
(LOSS) PER SHARE 
BEFORE EXCEPTIONAL                  6         1.4p                     (2.1)p
EARNINGS/(LOSS) PER                                                          
SHARE                                                         1.1p
EARNINGS/(LOSS)                                                              
PER SHARE  - DILUTED                                          1.1p           
                                                                             

                                   Except-                         
                                     ional
                                     Items
                          Notes     Note 2        Total       Total
                                      1999         1999     1 April
                                       £m           £m        2000
TURNOVER:                                               
Mothercare continuing                                             
Bhs discontinued                                                  
                                        -        601.1     1,266.1
                                 ________    _________    ________
PROFIT/(LOSS) FROM                                                
RETAIL OPERATIONS:
  Mothercare continuing                                           
  Bhs discontinued                                                
                                    (7.5)       (19.1)      (79.3)
                                                                  
Exceptional items        2            0.6          0.6     (303.6)
                                                                  
Interest                 3              -        (4.1)       (6.5)
                                 ________    _________    ________
                                                                  
PROFIT/(LOSS) BEFORE                                    
TAXATION                            (6.9)       (22.6)     (389.4)
Taxation                 4            1.2          5.6       (0.3)
                                 ________   _________    ________
                                                                 
PROFIT/(LOSS) AFTER                                               
TAXATION                              (5.7)     (17.0)     (389.7)
                                   ========  =========    ========
CONTINUING                                                        
BUSINESS EARNINGS /                                               
(LOSS) PER SHARE 
BEFORE EXCEPTIONAL       6                                  (2.2)p
EARNINGS/(LOSS) PER                                               
SHARE                                           (6.7)p    (152.7)p
EARNINGS/(LOSS)                                                   
PER SHARE  - DILUTED                            (6.7)p    (152.1)p

Reconciliation of movement in shareholders' funds
                                                      28 weeks ended 14.10.00
                                                                          £m
Profit for the financial period and net increase in                         
shareholders' funds                                                      2.2
Opening shareholders' funds                                            225.6
Scheme of arrangement  - reduction of share capital                  (106.0)
                                                                     _______
Closing shareholders' funds                                            121.8
                                                                     =======


GROUP BALANCE SHEET
As at 14 October 2000 (1999 - 9 October)
                                             14 October   9 October   1 April
                                                   2000        1999      2000
                                   Notes             £m          £m        £m
FIXED ASSETS                                                                 
Tangible fixed assets                              86.5       661.5     319.6
Investments                                         4.3         3.1       1.5
                                            ___________   _________   _______
                                                   90.8       664.6     321.1
                                            ___________   _________   _______
CURRENT ASSETS                                                               
Stocks                                             38.4       194.8     118.7
Debtors                                            30.6        71.4      65.2
Cash at bank and in hand and time                                            
deposits                                           42.3        45.6      51.3
CREDITORS: amounts falling due                                               
within one year                        7         (71.2)     (323.3)   (257.4)
                                            ___________   _________   _______
NET CURRENT ASSETS/(LIABILITIES)                   40.1      (11.5)    (22.2)
                                            ___________   _________   _______
CREDITORS: amounts falling due                                              
after one year                         7         (2.6)       (18.2)   (11.6)
PROVISIONS for liabilities and                                               
charges                                8          (6.5)      (36.6)     61.7)
                                            ___________   _________   _______
NET ASSETS                                        121.8       598.3     225.6
                                            ___________   _________   _______
                                                                             
Capital and reserves attributable                                            
to equity interests
Called-up share capital                            35.3        42.4      42.4
Share premium account                                 -        31.7      31.7
Acquisition and merger reserves                       -        73.5         -
Profit and loss account                            86.5       450.7     151.5
                                            ___________   _________   _______
                                                  121.8       598.3     225.6
                                            ___________   _________   _______
                                                                             
NET CASH (GEARING)/EQUITY %                       32.7       (19.8)    (30.8)

ANALYSIS OF NET CASH (DEBT)
                                            14 October    9 October   1 April
                                                  2000         1999      2000
                                                    £m           £m        £m
                                                                             
    Cash at bank                                  42.3         10.2      15.0
    Time deposits                                    -         35.4      36.3 
    Bank overdrafts and bank loans                   -       (25.3)    (20.7)
    Bills of exchange and bank loans                 -      (128.3)    (93.5)
    Bank loans over one year                         -        (5.8)     (2.5)
    Obligations under finance leases:                                        
      short term                                  (2.0)       (1.9)     (2.0)
      long term                                   (0.5)       (2.5)     (2.0)
                                           ___________     ________   _______
                                                                    
                                                  39.8      (118.2)    (69.4)
                                           ___________     ________   _______
                                                                    
                                                                             

   The bank loans were repaid early on the sale of Bhs in May 2000.


GROUP CASH FLOW
For the 28 weeks ended 14 October 2000 (1999 - 28 weeks ended 9 October)

                                          28 weeks      28 weeks    53 weeks
                                             ended         ended       ended
                                          14.10.00       9.10.99      1.4.00
                                                £m            £m          £m
(Loss)/profit from retail operations                                        
before exceptional items                     (4.9)        (11.6)        13.5
Depreciation                                  13.4          35.3        66.6
Working capital                                9.6          11.8        20.4
Exceptional costs/other                     (14.9)         (2.1)       (5.3)
                                        __________    __________  __________
Net cashflow from operating activities                                      
(Note 9)                                       3.2         33.4         95.2
                                                                            
Returns on investments and servicing                                        
of finance                                     2.2         (4.1)       (6.5)
                                                                            
Taxation                                       2.3           2.7       (0.6)
                                                                            
Capital expenditure (Note 9)                   0.2        (36.2)      (43.5)
                                        __________    __________  __________
                                               7.9         (4.2)        44.6
Acquisitions and disposals                                                   
Disposal of Bhs  (Note 2)                    208.9             -            -
Acquisition of own shares by Employee                                        
Trust                                        (2.5)             -            -
                                        __________    __________   __________
                                             206.4             -            -
                                        __________    __________   __________
                                                                            
Equity dividends paid                            -        (22.8)      (22.8)
                                        __________    __________  __________
                                             214.3        (27.0)        21.8
Management of liquid resources                36.3         (1.1)       (2.0)
                                                                            
Financing                                                                   
Scheme of arrangement -reduction in                                         
share capital                              (105.1)             -           -
Other                                       (10.3)          21.2      (17.3)
                                        __________    __________  __________
                                           (115.4)          21.2      (17.3)
                                        __________    __________  __________
Increase (decrease) in cash in the                                          
period                                       135.2         (6.9)         2.5
                                        __________    __________  __________
                                                                            
RECONCILIATION OF NET CASH FLOW TO                                          
MOVEMENT IN NET DEBT
Increase (decrease) in cash in the                                          
period                                       135.2         (6.9)         2.5
Cash flow from liquid resources             (36.3)           1.1         2.0
Cash flow from financing                      10.3        (21.2)        17.3
                                        __________    __________  __________
Movement in net funds (debt) in the                                         
period                                       109.2       (27.0)         21.8
Net debt at the beginning of the                                            
period                                      (69.4)        (91.2)      (91.2)
                                        __________    __________  __________
Net funds (debt) at the end of the                                          
period                                        39.8       (118.2)      (69.4)
                                        __________    __________  __________
                                                                            


NOTES

1.   This interim report has been prepared under the historical cost
     convention and using accounting policies consistent with previous
     years.   Earnings per share has been restated in accordance with FRS 14
     to reflect the impact of the capital reduction and the subsequent share
     consolidation
     
2.   EXCEPTIONAL ITEMS
     Start up costs of Mothercare.com charged to the loss from retail
     operations £7.4m of costs have been charged to the loss from retail
     operations in relation to the start up of Mothercare.com.
     
     Exceptional items
     The exceptional item comprises the net profit on disposal of stores of
     £3.4 million (1999 - £0.6 million) and the continuing costs of
     separation and adjustments in respect of the Bhs disposal.   The
     completion of the disposal of Bhs took place on 22 May 2000.   The cash
     proceeds on the disposal of Bhs, net of the direct costs of £3.6
     million, were £208.9 million.
     
     The tax effect of the exceptional items is a credit of £1.2 million
     (1999 - £1.2 million).

3.   INTEREST
      Interest comprises:         28 weeks       28 weeks       53 weeks
                                     ended          ended          ended
                                  14.10.00        9.10.99         1.4.00
                                        £m             £m             £m
      Interest receivable              3.4            1.2            2.4
      Interest payable               (1.0)          (4.5)          (8.1)
      Obligations under                                                  
      finance leases                 (0.2)          (0.2)          (0.2)
      Obligations under                                                  
      property leases                    -           0.6)          (0.6)
                              ____________    ____________   ____________
                                       2.2           (4.1)          (6.5)
                              ____________    ____________   ____________

4.   TAX
     
     Tax is calculated at 29% being the estimated effective rate of tax on
     continuing business profit before exceptional items for the 52 weeks
     ending 31 March 2001 (1999 - 28%).
     
5.   DIVIDEND
     
     No interim dividend has been proposed and there was no interim dividend
     in 1999.
     
6.   EARNINGS PER SHARE
     
     Earnings per share has been adjusted to take account of the impact of
     the capital reduction and subsequent share consolidation of 17 August
     2000.  The weighted average number of shares in issue in the period and
     the prior year comparatives have been restated accordingly.

                                        28 weeks       28 weeks    53 weeks
                                           ended          ended       ended
                                        14.10.00        9.10.99      1.4.00
                                                                            
     Weighted average number of                                             
     shares in issue                      197.8m         255.2m      255.2m
     Dilution:                                                              
        Option schemes                         -           0.9m           -
        LTIP schemes                           -           0.6m        1.0m
                                      _________   ___________     __________
                                                                            
     Diluted weighted average number                                        
     of shares in issue                   197.8m         256.7m       256.2m
                                       _________    ___________   __________
                                                                            
     Profit/(loss) after tax               £2.2m       £(17.0)m    £(389.7)m
     Continuing business                                                    
     profit/(loss) after tax before                                         
     exceptional items                     £2.8m        £(5.4)m      £(5.7)m
     Basic earnings/(loss) per share        1.1p         (6.7)p     (152.7)p
     Continuing business                                                    
     earnings/(loss) per share before                                       
     exceptional items                      1.4p         (2.1)p       (2.2)p
     Diluted earnings/(loss) per                                            
     share                                  1.1p         (6.7)p     (152.1)p

   The earnings per share of the continuing business before exceptional
   items has been shown to provide an indication of the underlying
   profitability of the business.


7.  CREDITORS - amounts falling due within one year
                                       14 October       9 October    1 April
                                             2000            1999       2000
     Due within one year                       £m              £m         £m
     Bank overdrafts                            -            25.3       20.7
     Bills of exchange and bank                                               
     loans                                      -           128.3       93.5
     Obligations under finance                                                
     leases                                   2.0             1.9        2.0
     Trade creditors                         19.2            78.3       43.8
     Current taxation                        12.9            29.0       10.5
     Payroll and other taxes,                                                 
     including social security                0.8             7.1        6.0
     Accruals and deferred income            35.0            39.5       71.1
     Landlords' contributions                 1.0             8.5        6.6
     Other creditors                          0.3             5.4        3.2
                                      ___________    ____________    _________
                                             71.2           323.3      257.4
                                      ___________    ____________    _________
     Due after one year                                                       
     Bank loans                                 -             5.8        2.5
     Obligations under finance                                             
     leases                                   0.5             2.5        2.0
     Current taxation                           -             0.3        0.3
     Landlords' contributions                 2.1             9.6        6.8
                                      ___________    ____________    _________
                                              2.6            18.2       11.6
                                                                              
                                      ___________    ____________    _________
                                                                              

8.  PROVISIONS FOR LIABILITIES AND CHARGES

                           Deferred       Disposal   Exceptional              
                                tax     provisions    provisions        Total
                                 £m            £m           £m            £m
     Opening balance           44.7           0.3         16.7          61.7
     Tax charge                 0.6             -           -            0.6
     Disposal of                                                              
     subsidiary              (45.3)             -         (6.3)        (51.6)
     Utilised                     -          (0.1)        (4.1)         (4.2)
                        ___________   ___________    ___________   ___________
     Closing balance              -           0.2          6.3            6.5
                        ___________   ___________    ___________    __________
                                                                             


    The exceptional provisions principally represent the costs of the
    Mothercare store disposal programme.


9.   ANALYSIS OF CASH FLOW FROM OPERATIONS
                                      28 WEEKS ENDED 14 OCTOBER 2000
                                      Mothercare             Bhs       Total
                                      Continuing    Discontinued            
                                              £m              £m          £m
                                                                            
     PROFIT (LOSS) FROM RETAIL                                              
     OPERATIONS                              1.8          (6.7)        (4.9)
     Depreciation                            6.3            7.1         13.4
     Working capital                         6.0             3.6         9.6
     Exceptional costs/other              (10.9)           (4.0)      (14.9)
                                      __________    ____________  __________
     Net cash flow from operations                                          
                                             3.2               -         3.2
                                      __________    ____________  __________
                                                                            
     CAPITAL EXPENDITURE                                                    
     Purchase of tangible fixed                                             
     assets                                (4.9)           (6.3)      (11.2)
     Sale of tangible fixed assets                                          
                                             9.3             2.1        11.4
                                      __________    ____________  __________
                                             4.4           (4.2)         0.2
                                      __________    ____________  __________
                                                                            



   These interim results were approved by the Directors on 23 November 2000.
   Results for the two half years have not been audited, but have been
   reviewed by Arthur Andersen.  The financial information contained in the
   interim accounts does not constitute statutory accounts as defined in
   Section 240 of the Companies Act.  The full year comparatives were
   extracted from the full Group Accounts which have been filed with the
   Registrar of Companies together with an unqualified auditors' report.
   All shareholders will receive a copy of the interim results.