Fashion update: morning suits are out. At least, that’s what bosses at Moss Bros (MOSB) are saying. Half-year like-for-like revenue from the group’s hire business was down more than 8 per cent as more bridegrooms opted for relaxed tailoring, and decided to purchase rather than rent outfits for their special day. This depreciation in volumes, together with a high level of fixed costs in that part of the business, explains a contraction in the group gross margin from 61.9 per cent to 61.2 per cent. As expected, margin pressure is set to increase in the second half of the year as hire trends continue to evolve and US dollar hedges roll off.
Thankfully, the performance of the group’s retail business continues to offset weakness elsewhere and it’s this division, bolstered by strong online growth, that helped half-year profit beat brokerage Peel Hunt’s forecast. Online sales now account for 11.2 per cent of total sales (from 10.3 per cent in 2016), while like-for-like sales across the store estate rose by a comfortable 3.7 per cent – a growth rate that has been sustained into the first eight weeks of the second half.
Analysts at Peel Hunt expect pre-tax profit of £7.2m for the year ending January 2018, giving EPS of 5.6p, up from £6.9m and 5.2p in FY2017.
| MOSS BROS (MOSB) | ||||
| ORD PRICE: | 100p | MARKET VALUE: | £101m | |
| TOUCH: | 96-100p | 12-MONTH HIGH: | 120p | LOW: 90p |
| DIVIDEND YIELD: | 6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 35p | NET CASH: | £21.5m | |
| Half-year to 29 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 63.8 | 3.7 | 3.0 | 1.91 |
| 2017 | 66.6 | 4.2 | 3.3 | 2.03 |
| % change | +4 | +16 | +8 | +6 |
| Ex-div: | 26 Oct | |||
| Payment: | 24 Nov |
