Steep raw material costs and a tough trading environment might have presented serious headwinds for Moss Bros (MOSB), but the suit retailer was still able to grow like-for-like sales by 3.9 per cent in the year to January. The company also spent £5.5m on capital projects, including 14 store refits and a retail website offering 'click and collect', while maintaining a strong net cash position.
The underlying gross margin fell by 20 basis points to 59.5 per cent, less than anticipated, as cost pressures, such as wool, eased and lower levels of discounting occurred. Retail sales grew 4.1 per cent, while revenue from hire increased 3.1 per cent, driven by strong demand for eveningwear and the school prom market.
Sales at Moss Bros' e-commerce website soared 54 per cent in the year, albeit from a low starting point. The new retail site already has a conversion rate of 50 per cent, so while online only accounts for 2.1 per cent of total retail sales, it is shaping up to be a vital growth channel for Moss Bros, which expects to be completely multi-channel by the end of the year.
Peel Hunt expects current year underlying pre-tax profits of £3.1m and adjusted EPS of 2.3p, up from £3m and 1.9p, respectively.
| MOSS BROS (MOSB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 67p | MARKET VALUE: | £67m | |
| TOUCH: | 66-68p | 12-MONTH HIGH: | 72p | LOW: 41p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 36p | NET CASH: | £25.7m | |
| Year to 26 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2013* | 105 | 3.11 | 2.43 | 0.90 |
| % change | +4 | +246 | +49 | +125 |
Ex-div: 5 Jun Payment: 27 Jun *Continuing operations | ||||
