The belt-and-braces overhaul at clothier Moss Bros (MOSB) has led to a 30 per cent surge in operating profit, suggesting its new-look stores and revamped ranges are proving popular. Gross margins in its retail division, which accounts for 85 per cent of total revenue, rose 3.3 percentage points as the different price points of its new sub-ranges removed the need to have a mid-season sale. Investments in its e-commerce operations, alongside the appointment of a customer director and new chief financial officer, mean better data collection from online sales which have been used for more targeted marketing.
Chief executive Brian Brick says its store refurbishment programme, which means "gutting the store and putting in a new infrastructure", was nearing completion. There are nine to be completed this year, 20 in the next financial year and a handful the year after. "The old perception of Moss Bros is different to the reality now," says Mr Brick. Roughly a quarter of its products are sourced in dollars but the company is hedged through to spring 2017, and management says buying prices have been improved by using fewer suppliers.
Analysts at Liberum expect pre-tax profit of £6.4m for the year to January 2017, leading to EPS of 4.8p compared with £5.6m and 4.2p in FY2016.
MOSS BROS (MOSB) | ||||
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ORD PRICE: | 103p | MARKET VALUE: | £104m | |
TOUCH: | 102-105p | 12-MONTH HIGH: | 110p | LOW: 89p |
DIVIDEND YIELD: | 5.5% | PE RATIO: | 19 | |
NET ASSET VALUE: | 37p | NET CASH: | £21.1m |
Half-year to 30 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
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2015 | 61.3 | 2.8 | 2.2 | 1.80 |
2016 | 63.8 | 3.7 | 3.0 | 1.91 |
% change | +4 | +30 | +37 | +6 |
Ex-div: 27 Oct Payment: 25 Nov |