Moss Bros chief executive Brian Brick pointed to easing conditions on the high street after the suit specialist returned to profits a year earlier than expected. The achievement was marked with a return to the dividend list and, with the recovery still in its early stages, shareholders should keep buying in anticipation of further improvement to come.
Not that Moss Bros is in any hurry to give back too much of its swelling cash pile just yet. Mr Brick said the strength of its balance sheet – net cash is worth 25p a share – was an important comfort factor in building up its direct sourcing capability, letting Chinese manufacturers know that it will be able to pay its bills. Management estimates that a third of its suits could be sourced in this way by next year, which will help improve margins further still. Some of the cash will also be used to give its stores a makeover in the coming years – Mr Brick said the new format put in place at the 10 new stores opened this year is helping Moss Bros improve its image and attract new customers. An overhaul of its ranges also helped drive a 12.5 per cent increase in like-for-like sales.
Broker WH Ireland expects current-year adjusted EPS to treble to 1.6p.
MOSS BROS GROUP (MOSB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 49p | MARKET VALUE: | £46.1m | |
| TOUCH: | 48-49.5p | 12-MONTH HIGH: | 50p | LOW: 26p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 36p | NET CASH: | £23.3m | |
| Year to 28 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 130 | -1.38 | -1.40 | 0.50 |
| 2009 | 130 | -9.28 | -9.50 | nil |
| 2010 | 129 | -6.65 | -6.10 | nil |
| 2011* | 88 | -8.93 | -7.45 | nil |
| 2012* | 101 | 0.90 | 1.63 | 0.40 |
| % change | +15 | - | - | - |
Ex-div: 11 Jul Payment: 16 Aug *Continuing operations | ||||
