Consumer conditions may be tough but clothing retailer, Moss Bros (MOSB), grew group like-for-like sales by 5.7 per cent in the year to end-July. The group also reinstated the interim dividend payout and, following the sale of peripheral businesses, has swelled its cash pile. Yet, strip out that cash, and the share price rating doesn't do justice to the group's recovery potential.
And, while Olympic disruption hit sales at the hire business - as wedding bookings were deferred - that should be mitigated in the second half, which means the overall impact on earnings from the Olympics is expected to be neutral. Meanwhile, the retail business performed well and grew like-for-like sales by 6.5 per cent. Still, the group's gross margin did fall 2.2 percentage points to 60.4 per cent after management decided to absorb increases in raw material costs. Management will spend £11m over five years revamping 90 of its 136-strong store portfolio, too.
Broker WH Ireland expects pre-tax profit of £1.6m for 2013, with EPS of 1.6p (2012: £0.5m/0.5p).
MOSS BROS (MOSB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 46p | MARKET VALUE: | £45.7m | |
| TOUCH: | 45-47p | 12-MONTH HIGH: | 52p | LOW: 31p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 46 | |
| NET ASSET VALUE: | 35p | NET CASH: | £26.2m | |
| Half-year to 28 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 51.8 | 2.16 | 2.28 | nil |
| 2012 | 52.7 | 2.21 | 1.66 | 0.20 |
| % change | +2 | +2 | -27 | - |
Ex-div: 31 Oct Payment: 29 Nov | ||||
