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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Moss Bros Group Plc | LSE:MOSB | London | Ordinary Share | GB0006056104 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 21.60 | 21.80 | 22.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMMOSB
RNS Number : 9959K
Moss Bros Group PLC
28 September 2016
MOSS BROS GROUP PLC
HALF YEARLY FINANCIAL REPORT
FOR THE 26 WEEKS TO 30 JULY 2016
Continued Strong Progress
Moss Bros Group PLC ("the Group"), the 'first choice for men's tailoring' today announces its Half Yearly Financial Results, covering the 26 week period from 31 January 2016 to 30 July 2016.
The Group's trading performance continues positively, in line with the Board's expectations and the business is well placed to achieve its objectives during the second half.
HIGHLIGHTS
Financial
-- Like for like* sales increased 4.9% and total sales of GBP63.8m were 4.1% up on last year.
-- Like for like* retail sales were up 5.3%, including retail e-commerce sales up 7.7%. Like for like* hire sales were up 2.8%.
-- Retail gross margin was up 3.3%, due to improved sell through rates, the removal of mid-season sale and more targeted promotional activity. Overall gross margin also increased to 61.9% (HY1 2015: 60.1%).
-- Pre-tax profit was up 30% to GBP3.7m (HY1 2015: GBP2.8m) and operating profit by 30% to GBP3.6m (HY1 2015: GBP2.8m).
-- Strong cash performance, with an underlying cash balance of GBP21.1m at the period end.
-- As Moss Bros continues to trade strongly interim dividend increased by 6.1% to 1.91 pence per share (1 August 2015: 1.80 pence per share), in line with the progressive dividend policy.
Operational
-- Improvements in brand identity from ongoing store refit programme combined with better defined master and sub-brands, continues to underpin the full price offer and is well received by customers.
-- The programme to modernise the store portfolio continues and 7 further stores were completed in the first half (2015 H1: 11 stores). 89 new and refitted stores now trade in the new format, out of a total of 125 stores.
-- 3 new stores opened during the half, 1 store relocated and 2 were closed.
-- E-Commerce sales continue to increase (+9% vs. H1 LY) as a result of further investment in the retail and hire websites and successful focus on leveraging the existing customer database to drive conversion and average order value. E-Commerce sales now represent 10.3% of total group revenue.
-- 'Tailor Me' custom tailoring service launched across the majority of stores with positive customer reaction.
-- A Chief Operating Officer and Customer Director joined the business during the half in order to accelerate the development of our strategic goals.
Current trading and outlook
Trading in the 8 weeks to 24 September 2016 has been encouraging, with like for like* sales up 3.7%.
Early responses to the recently launched Autumn/Winter 2016 ranges have been positive.
The Group's trading performance continues positively, in line with the Board's expectations and the business is well placed to make further good progress during the second half.
Commenting on the results and outlook, Brian Brick, Chief Executive Officer, said:
"The half year under review was another period of strong progress for the Company.
Having originally launched the Moss Bros sub brand line up at the start of the Autumn 2014 season, we have ensured that our customer offer is more clearly defined and more closely aligned with our target customer groups. Alongside this, the significant ongoing store refit programme, which will be substantially complete by the end of this financial year, has continued to steadily build equity in the Moss Bros brand.
Early customer response to the new Autumn Winter ranges is positive and like for like* sales continue to show year on year growth. More targeted promotional programmes have continued to drive improvements in our gross margin.
We are pleased with initial customer responses to our 'Tailor Me' personalisation service, a simplified set of bespoke options offering a custom made suit, ready for collection within 30 days of placing an order, reflecting our ability to innovate and improve our overall customer offer.
Improvements in customer conversion and higher average transaction values have underpinned the E-Commerce performance, which also now benefits from a fully responsive website, enabling us to more effectively serve those customers reaching us via mobile devices.
I'd like to thank all of our people for their hard work and commitment in delivering another set of strong results.
The Group's financial performance continues positively and in line with the Board's expectations for the outturn for the year. We are profitable, cash generative and have a strong balance sheet and given our confidence in our performance, we are declaring an interim dividend of 1.91 pence per share, in line with our progressive dividend policy."
For further information please contact
Moss Bros Group plc 0207 447 7200
Brian Brick, Chief Executive Officer
Tony Bennett, Finance Director
Buchanan
0207 466 5000
Charles Ryland/Victoria Hayns/Catriona Flint
*Like for like represents financial information for stores open during both the current and prior financial periods and compares 26 weeks against 26 weeks, except for stores refitted in the period, where the period closed for refit is excluded from both the current and prior financial periods. Like for like Hire sales are calculated on a cash receipts basis in the period, before adjusting for the movement in the level of hire deposits held.
INTERIM MANAGEMENT REPORT
FOR THE 26 WEEKS TO 30 JULY 2016
OVERVIEW
Moss Bros Group PLC retails and hires formal wear and fashion products for men, predominantly in the UK, with retail sales comprising 85%, and Hire 15%, of total sales. The Group retails own brand and third party brand menswear through the Moss Bros fascia, and hires formal wear under the Moss Bros Hire brand through its mainstream stores. The Group also trades through the premium Savoy Taylors Guild fascia in a small number of stores.
Sub brands of Moss London, Moss 1851 and Moss Esquire were launched in Autumn 2014. These sub brands, combining with Savoy Taylors Guild, have created an authoritative and complementary customer offer across a range of fits and prices, underpinning our expertise in formalwear, under the Moss Bros master brand.
The 'Tailor Me' personalisation service launched during the period under review and is now available in the majority of stores. It is a simplified set of bespoke options offering a custom made suit, ready for collection within 30 days of placing an order.
REVIEW OF THE FIRST HALF
Profit before tax from continuing operations for the six months to 30 July 2016 was GBP3.7m, a 30% increase on last year (HY1 2015: GBP2.8m) due to strong like for like sales and margin growth, benefitting from an increasing contribution from refitted stores, careful and measured promotional activity and online growth.
The business performed well in the first half with strong increases in retail gross margin rates, as a result of ongoing reductions in the level of discounting, particularly the removal of the mid-season sale, facilitated by strong first quarter performance. Refitted stores continued to perform well and enable us to present a more authoritative and more easily navigated customer offer.
E-commerce continued to achieve strong growth through improved visitor conversion and higher average order values. The continued development of new systems and processes along with the increased multi-channel 'bench strength' of our senior teams will support our multi channel customer offer.
Trading performance
Total revenue increased by 4.1% in the six months to 30 July 2016 to GBP63.8m (HY1 2015; GBP61.3m). Like for like* retail sales performed well, increasing by 5.3%. Moss Bros Hire maintained its position as the leading brand name in formal hire, recording a like for like* sales increase of 2.8%. Across the Group like for like* sales were up 4.9% in the first half.
Retail gross margin rate was up 3.3%, as the benefits of running more coordinated and targeted promotional campaigns across the business came through, along with improved buying prices. Hire margin rates were more challenged, 5.6% lower resulting from increases in stock retirement rates and increases in processing costs. Overall gross margin rate was 1.8% higher at 61.9% (HY1 2015: 60.1%).
The refit programme to modernise the Moss Bros store portfolio continues and our refitted stores continued to achieve payback targets. 7 stores were refitted in the 26 weeks to 30 July 2016 (2015: 11) and a further 9 stores are scheduled to be refitted in the second half of the financial year. 89 new and refitted stores now trade in the new format and this is continuing to change customers' perception of the business to a modern, multichannel retailer that is also the leading brand in Hire.
In line with our strategy of improving the store portfolio we opened 3 new stores; on Teesside, in Belfast and in Newbury. We also relocated our Hatfield store to a larger, better positioned location in the first half, and closed 2 non-core stores. Moss Bros currently trades from 125 stores. We will continue to improve the store portfolio where locations are found that meet our investment criteria.
Like for like* hire sales were up on 2015 levels by 2.8%. The introduction of Lounge Suits continues to enable us to broaden our hire offer. The second half of the year sees less impact from wedding hire bookings as we move into the more traditional eveningwear season. Although modest in size, we are beginning to see some traction from our online hire offer which achieved on sales (before the adjustment for hire deposits) an increase of 39% versus the first half last year. We will continue to develop our hire proposition and invest in improving our hire systems in order to underpin both product offer and service.
Our online capability continues to grow, with total e-commerce sales up 9% on the previous year. Conversion and average order values continue to improve. Mobile traffic continues to grow strongly and is now 25%, of online sales. A device responsive website was launched at the end of the first half to further extend our online capability and provide a better shopping experience for those using mobile devices. Overall online sales now comprise 10.3% of total Group revenue (FY 2016: 10%).
Our two store pilot in the Middle East is now live with one unit being a mall store and the other a concession unit. This trial allows the potential for further expansion to be evaluated at relatively low risk and cost to the business.
Costs remain tightly controlled with expenditure focussed on areas which support the business's strategic goals. The impact of the National Living Wage is in line with our previous expectations.
Our product supply prices are continually reviewed, with foreign currency exposure, principally US Dollar, relating to approximately only 25% of our product buy. Our USD requirement is already fully hedged for Autumn/Winter 2016 and also for the majority of the Spring/Summer 2017 season as well. As part of our ongoing programme of margin rate improvements, alongside actively monitoring foreign exchange market movement, we will review our sourcing routes and supplier relationships to ensure that we are achieving the best supply prices possible for our product.
The development of our people is key to delivering our ambition of becoming the first choice for men's tailoring. Investment in our people through recruitment, induction, training and development, performance appraisal and performance management will be a corner stone in delivering our strategic goals.
*Like for like represents financial information for stores open during both the current and prior financial periods and compares 26 weeks against 26 weeks, except for stores refitted in the period, where the period closed for refit is excluded from both the current and prior financial periods. Like for like Hire sales are calculated on a cash receipts basis in the period, before adjusting for the movement in the level of hire deposits held.
FINANCIAL SUMMARY
A summary of the key financial results is set out in the table below.
Hot Features
Premium
Key financials 26 weeks 26 weeks 52 weeks
CONTINUING OPERATIONS to to to
30 July 1 August 30 January
2016 2015 2016
GBP'000 GBP'000 GBP'000
Revenue
Retail 54,558 51,993 103,883
Hire 9,287 9,339 17,189
---------------------------------- --------- ---------- --------- ---------
Total revenue 63,845 61,332 121,072
---------------------------------- --------- ---------- --------- ---------
Gross profit
Retail 32,293 29,060 58,570
Hire 7,240 7,812 13,833
---------------------------------- --------- ---------- --------- ---------
Total gross profit 39,533 36,872 72,403
---------------------------------- --------- ---------- --------- ---------
Gross margin %
Retail 59.2% 55.9% 56.4%
Hire 78.0% 83.6% 80.5%
---------------------------------- --------- ---------- --------- ---------
Total 61.9% 60.1% 59.8%
---------------------------------- --------- ---------- --------- ---------
Administrative expenses
(*) (3,535) (3,471) (6,146)
Shops' selling and marketing
costs (*) - - (60,333)
Shops' selling and marketing
costs classified as exceptional - - (748)
Shops' selling and marketing
costs total (32,385) (30,630) (61,081)
---------------------------------- --------- ---------- --------- ---------
Operating profit 3,613 2,771 (5,176)
---------------------------------- --------- ---------- --------- ---------
Other gains and losses - - 3
Other gains and losses
classified as exceptional - - 650
Other gains and losses
total 5 3 653
Investment revenues 33 36 66
Financial costs - - (51)
Profit before tax 3,651 2,810 5,844
---------------------------------- --------- ---------- --------- ---------
EBITDA (**) 6,754 6,187 11,775
---------------------------------- --------- ---------- --------- ---------
* Administrative expenses and shops' selling and marketing costs are not analysed between Retail and Hire.
** EBITDA is earnings before interest, tax, depreciation and amortisation on continuing activities. See Note 6.
DIVID AND DIVID POLICY
The Board has decided to declare an interim dividend of 1.91 pence per share (HY1 2015: 1.80 pence per share) to be paid on 25 November 2016, to shareholders on the register on 28 October 2016 (ex dividend date 27 October 2016).
FINANCIAL POSITION
Net assets increased to GBP37.3m (1 August 2015: GBP35.6m).
The daily management of cash remains a focus. The underlying cash position at 30 July 2016 was GBP21.1m (1 August 2015: GBP19.0m). Net cash inflow for the six months ended 30 July 2016 was GBP3.9m. Dividends of GBP3.8m were paid in the period. The Group continues to meet its day to day working capital requirements through surplus cash balances.
Total net inventory as at 30 July 2016 was GBP14.6m (1 August 2015: GBP14.0m). This increase was in line with the increase in revenue.
RELATED PARTY TRANSACTIONS
The Group had no material related party transactions other than on an arm's length basis, which might reasonably be expected to influence decisions made by other users of the condensed set of financial statements. Details of all related party transactions are disclosed in the notes to this Interim Management Report.
RISKS AND UNCERTAINTIES
Details of all potential risks and uncertainties are disclosed in the note 2 of this Interim Management Report.
CAUTIONARY STATEMENT
This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. This IMR should not be relied on by any other party or for any other purpose.
This IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this IMR but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Moss Bros Group PLC and its subsidiary undertakings when viewed as a whole.
DIRECTORS' RESPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
a: the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';
b: the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c: the interim management report includes a fair review of the information required by the DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
The directors are responsible for maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.
Moss Bros Group PLC
8 St. John's Hill
London
SW11 1SA
By Order of the Board,
Brian Brick Tony Bennett
Chief Executive Officer Finance Director and Company Secretary
MOSS BROS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 26 WEEKS TO 30 JULY 2016
26 weeks to 26 weeks to 52 weeks
30 July 2016 1 August 2015 to
30 January
2016
Total Total Total
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
------------------------ -------------- --------------- ------------
CONTINUING OPERATIONS
Revenue 63,845 61,332 121,072
Cost of sales (24,312) (24,460) (48,669)
-------------------------- -------------- --------------- ------------
Gross profit 39,533 36,872 72,403
Administrative
expenses (3,535) (3,471) (6,146)
Shops' selling
and marketing costs (32,385) (30,630) (61,081)
-------------------------- -------------- --------------- ------------
Operating profit 3,613 2,771 5,176
Other gains and
losses 5 3 653
Investment revenues 33 36 66
Financial costs - - (51)
-------------------------- -------------- --------------- ------------
Profit on ordinary
activities before
taxation 3,651 2,810 5,844
Taxation charge (646) (659) (1,239)
-------------------------- -------------- --------------- ------------
Profit from continuing
operations after
taxation 3,005 2,151 4,605
Profit after taxation
attributable to
equity holders
of the parent 3,005 2,151 4,605
========================== ============== =============== ============
Other comprehensive
income
Cash flow hedges
Change in fair
value of effective
portion 289 (613) (61)
------------
Total comprehensive
income 3,294 1,538 4,544
========================== ============== =============== ============
Earnings per share
Basic - continuing 3.01p 2.19p 4.65p
Diluted - continuing 2.93p 2.07p 4.50p
-------------------------- -------------- --------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 26 WEEKS TO 30 JULY 2016
26 Weeks ended Share
30 July 2016 premium Retained Total
(Unaudited) Share Employee
Share based benefit Hedging
capital account payments trust reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Balance at 30
January 2016 5,040 8,673 775 (682) 630 22,901 37,337
Profit for the
period 3,005 3,005
Other comprehensive
income:
Cash flow hedging
movement - - - - 289 - 289
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Total comprehensive
income 289 3,005 3,294
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Dividends paid - - - - - (3,766) (3,766)
Issue of share - - - - - - -
capital
Credit to equity
for equity settled
share based
payments - - 289 - - - 289
Exercise of
shares held
under option - - (459) - - 459 -
Movement on
deferred tax
on share based
payments - - (20) - - - (20)
Movement on
current tax
on exercise
of equity settled
share-based
payments - - - - - 110 110
Sale of shares
by employee
benefit trust - - - 507 - (507) -
SAYE exercise
- employee contributors 70 70
Balance at 30
July 2016 5,040 8,673 585 (175) 919 22,272 37,314
========================== ========= ========== =========== ========== ========= =========== =========
26 Weeks ended Share
1 August 2015 premium Retained Total
(Unaudited) Share Employee
Share based benefit Hedging
capital account payments trust reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Balance at 31
January 2015 5,040 8,673 1,224 (1,521) 691 23,347 37,454
Profit for the
period - - - - - 2,151 2,151
Other comprehensive
income:
Cash flow hedging
movement - - - - (613) - (613)
--------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Total comprehensive
income - - - - (613) 2,151 1,538
--------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Dividends paid - - - - - (3,511) (3,511)
Issue of share - - - - - - -
capital
Credit to equity
for equity settled
share based
payments - - 107 - - - 107
Exercise of
shares held
under option - - (605) - - 605 -
Movement on
deferred tax
on share based
payments - - 56 - - - 56
Sale of shares
by employee
benefit trust - - - 605 - (605) -
Balance at 1
August 2015 5,040 8,673 782 (916) 78 21,987 35,644
===================== ========= ========== =========== ========== ========= =========== =========
52 Weeks ended Share
30 January 2016 premium Total
(Audited) Share Employee Retained
Share based benefit Hedging earnings
capital account payments trust reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Balance at 31
January 2015 5,040 8,673 1,224 (1,521) 691 23,347 37,454
Profit for the
period - - - - - 4,605 4,605
Other comprehensive
income:
Cash flow hedging
movement - - - - (61) - (61)
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Total comprehensive
income - - - - (61) 4,605 4,544
-------------------------- --------- ---------- ----------- ---------- --------- ----------- ---------
Dividends paid - - - - - (5,300) (5,300)
Issue of share - - - - - - -
capital
Credit to equity
for equity settled
share-based
payments - - 347 - - - 347
Exercise of
shares held
under option - - (619) - - 619 - Movement on deferred tax on equity settled share-based payments - - (177) - - - (177) Movement on current tax on exercise of equity settled share-based payments - - - - - 249 249 Sales of shares by employee benefit trust - - - 839 - (839) - SAYE exercise - employee contributors - - - - - 220 220 Balance at 30 January 2016 5,040 8,673 775 (682) 630 22,901 37.337 ========================== ========= ========== =========== ========== ========= =========== =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JULY 2016
30 July 2016 1 August 2015 30 January
GBP'000 GBP'000 2016
GBP'000
(Unaudited) (Unaudited) (Audited)
------------------------------- ------------- -------------- -----------
Assets
Intangible assets 1,546 1,592 1,796
Property, plant and
equipment 18,807 18,397 17,187
Leasehold improvements 1,189 933 1,016
Deferred tax assets 1,359 1,248 1,189
------------------------------- ------------- -------------- -----------
Total non-current assets 22,901 22,170 21,188
Inventories 14,601 14,015 14,428
Trade and other receivables 3,241 3,053 3,013
Cash and cash equivalents 21,128 19,026 17,259
Derivative financial
instruments 891 45 597
------------------------------- ------------- -------------- -----------
Total current assets 39,861 36,139 35,297
------------------------------- ------------- -------------- -----------
Total assets 62,762 58,309 56,485
=============================== ============= ============== ===========
Liabilities
Trade and other payables 17,348 15,024 11,603
Provisions 1,086 566 1,076
Current tax liability 858 576 229
------------------------------- ------------- -------------- -----------
Total current liabilities 19,292 16,166 12,908
------------------------------- ------------- -------------- -----------
Other payables 3,190 3,117 2,990
Provisions 1,418 1,403 1,402
Deferred tax liabilities 1,548 1,979 1,848
Total non-current liabilities 6,156 6,499 6,240
------------------------------- ------------- -------------- -----------
Total liabilities 25,448 22,665 19,148
=============================== ============= ============== ===========
Net assets 37,314 35,644 37,337
Equity
Issued capital 5,040 5,040 5,040
Share premium account 8,673 8,673 8,673
Share based payments 585 782 775
Employee benefit trust (175) (916) (682)
Hedging reserve 919 78 630
Retained earnings 22,272 21,987 22,901
------------------------------- ------------- -------------- -----------
Equity attributable
to equity holders of
parent 37,314 35,644 37,337
------------------------------- ------------- -------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 26 WEEKS TO 30 JULY 2016
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
-------------------------------- ------------ ------------ ------------
Operating activities
Profit after taxation 3,005 2,151 4,605
Adjustments for:
Taxation charge 646 659 1,239
Other gains and losses (5) (3) (653)
Investment revenues (33) (36) (66)
Net finance costs - - 51
Amortisation of intangible
assets 413 787 1,149
Depreciation of property,
plant and equipment 2,830 2,731 5,654
Amortisation of compulsory
purchase compensation (102) (102) (204)
Loss on disposal of property,
plant and equipment 303 58 642
(Increase)/Decrease in
inventories (173) 1,721 1,308
Decrease / (increase) in
receivables (228) 507 547
Increase / (decrease) in
payables 5,918 666 (2,215)
Increase/(Decrease) in
provisions 26 (266) 243
Share-based payments expense 317 186 451
Exercise of share options (459) - (619)
Exceptional income - lease
compensation cash receipt - - 650
Taxation received / (paid) (397) (115) (1,143)
-------------------------------- ------------ ------------ ------------
Net cash from operating
activities 12,061 8,944 11,639
================================ ============ ============ ============
Investing activities
Interest received 33 36 66
Interest paid - - (4)
Purchase of intangible
assets (365) (401) (966)
Purchase of property, plant
and equipment (4,768) (6,277) (8,645)
Proceeds from the disposal 145 - -
of property, plant and
equipment
Net cash used in investing
activities (4,955) (6,642) (9,549)
================================ ============ ============ ============
Financing activities
Dividends paid (3,766) (3,511) (5,300)
Proceeds from the issue - - -
of shares
Sale of shares by employee
benefit trust 507 605 839
Excess SAYE receipt between 22 - -
cost and exercise price
-------------------------------- ------------ ------------ ------------
Net cash used in financing
activities (3,237) (2,906) (4,461)
================================ ============ ============ ============
Net (decrease)/increase
in cash and cash equivalents 3,869 (604) (2,371)
Cash and cash equivalents
at beginning of period 17,259 19,630 19,630
Cash and cash equivalents
at end of period 21,128 19,026 17,259
================================ ============ ============ ============
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 26 WEEKS TO 30 JULY 2016
1. GENERAL INFORMATION
The results for the 26 weeks ended 30 July 2016 and 1 August 2015 are neither audited nor reviewed by the Group's auditor.
The information for the 52 weeks ended 30 January 2016 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The annual financial statements of Moss Bros Group PLC are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The condensed set of consolidated financial statements included in this half-yearly report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union.
GOING CONCERN
The Directors are satisfied that the Group and Company have sufficient resources to continue in operation for the foreseeable future, being a period of at least 12 months from the date of approval of this half-yearly report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly report and financial statements.
The Directors believe the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current and anticipated cash resources.
CHANGES IN ACCOUNTING POLICY
The same accounting policies, presentation and methods of computation are followed in this half-yearly report as applied in the Group's latest annual audited financial statements for the 52 weeks ended 30 January 2016.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Directors have revisited and updated the principal risks and uncertainties as published in the annual report for the 52 weeks ended 30 January 2016, which are summarised below:
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS
BUSINESS RISK TO COMPANY MITIGATION OF RISK ASSESSMENT
AREA OF CHANGE IN
RISK YEAR ON
YEAR
=============================== ============================ ============================ =========================
Hire The Hire business We have a dedicated The risk is
demands the highest customer service ongoing; however
level of customer team which actively we have expanded
service seek to resolve our customer
This is delivered any customer service service team
through a highly issues arising. during the
developed and We are continually year and have
efficient infrastructure refreshing and replenishing carried a full
which enables our stock of hire review of all
consistent 'delivery garments to ensure systems and
to promise'. we are able to cater processes.
Any disruption for all occasions
to this infrastructure whenever they fall
would affect due.
our ability to We have previously
maintain customer strengthened our
service levels. market position
through the introduction
of a new transactional
Hire website and
back-end system
improvements are
in development.
=============================== ============================ ============================ =========================
Retail Factors outside We continually focus This risk is
and Tailor our control, on maintaining our little changed
Me such as an economic product quality, as although
downturn affecting customer service the economic
the UK or any and supplier relationships, outlook has
wider economic whilst retaining gradually improved
downturn as a our competitive recently.
result of the position, including The macro risks
vote to leave value and pricing. associated
the EU, may have with the EU
a material adverse Foreign currency referendum
effect on results exposure, principally are difficult
As a retail business the US Dollar, is to quantify
based and operating hedged for 6 to until we have
predominantly 9 months in advance further clarity
in the UK, we and so any short on timelines
are particularly terms currency fluctuations and approach
exposed to any during the EU referendum from both UK
economic downturn campaign period government
in the UK which have been mitigated. and EU negotiators.
could affect
consumer confidence
and therefore
spending.
=============================== ============================ ============================ =========================
E-Commerce Customer satisfaction We are continually With the continuous
is as important developing our website increase in
online as offline offering in order trade through
Ease of navigation/ability to become fully e-commerce
to transact quickly multi-channel. and the market
on the website Our Retail website trend on moving
is key to generating has continued to to a fully
sales online. see increases in multi-channel
Maintaining a conversion rates operation,
competitive edge and average order the risk has
through customers values. increased during
being able to We have developed the year.
interact with a fully responsive
the product online, website during the
offering product first half which
choice and availability, provides a more
and allowing appropriate browsing
multiple payment experience for the
and delivery increasing proportion
options are important of visitors to the
in growing our site using mobile
online presence. or tablet technology.
Ensuring a secure We have security
online marketplace policies, rules
is also vital and technical measures
for customers in place to protect
to be able to customer data.
transact safely.
=============================== ============================ ============================ =========================
Brand Maintaining our We are undergoing The risk has
image store presentation a store redevelopment been reduced
is important programme to both during the
for attracting modernise the look year with the
customers and and feel of the progression
growing our brand stores and to meet of the store
The historical more routine maintenance redevelopment
underinvestment that has been deferred programme.
in the store for many years.
estate in previous The development
years has meant and launch of a
that some of new sub brand line
our stores lack up, under the master
the level of brand 'Moss Bros',
presentation in Autumn 2014 has
that we require strengthened the
to grow the business brand identity
and the brand.
=============================== ============================ ============================ =========================
BUSINESS RISK TO COMPANY MITIGATION OF RISK ASSESSMENT
AREA OF CHANGE IN
RISK YEAR ON
YEAR
=============================== ============================ ============================ =========================
Costs Supply chain Management has mitigated The risk is
cost price increases the cost price risk ongoing, however,
and currency as a significant and is continually
fluctuation could proportion of inventory monitored and
have a materially is direct sourced addressed.
adverse affect and prices have
on results been agreed as a
A fluctuation result of competitive
in currency rates tendering.
could materially In addition, the
affect the Group's Group operates a
cost base and treasury policy
margins. which hedges a significant
A re-emergence proportion of the
of general price foreign exchange
inflation could risk from such direct
affect profitability sourcing arrangements.
Although the Management closely
outlook for price monitor the effectiveness
inflation appears of these arrangements.
relatively benign, If general price
there are areas inflation returns
of concern such this may allow an
as the impact increase retail
of the 2017 business selling prices albeit
rates revaluation subject to market
and the second conditions
stage increase Ongoing review of
following the store profitability,
introduction combined with shorter
of the National lease durations.
Living Wage Remuneration policies
are under review
to ensure we remain
competitive in the
marketplace.
=============================== ============================ ============================ =========================
Supply A disruption We are continually The risk is
chain to supplier continuity reviewing and refreshing ongoing, however,
may adversely our supplier list. and is continually
affect our operation The diversification monitored and
Suppliers going of product buying addressed.
out of business across a range of
could have a suppliers limits
significant impact the Group's over
on our ability reliance upon any
to meet demand individual supplier.
in store and
online.
=============================== ============================ ============================ =========================
Distribution Operating our We continually review With new and
centre distribution and monitor our increased operating
(DC) centre from one disaster recovery pressures on
location leaves plan to ensure that the DC through
the Group exposed all business risks multi-channel,
to business catastrophes are adequately covered. the reliance
occurring at Our financial risk and consequent
that location of operating from exposure to
Any business one location is risk of the
catastrophe affecting mitigated through DC failing
our distribution our comprehensive has increased
centre could insurance cover. during the
severely affect DC IT systems were year.
the Group's ability upgraded in 2014.
to supply to
stores and customers.
=============================== ============================ ============================ =========================
Cyber A cyber crime Customer bank or Frequency and
crime attack could payment card details severity of
disable the Group's are not processed cyber crime
key IT systems or stored in the attacks against
and compromise Group's IT systems. companies have
data security Comprehensive security increased significantly
measures are in
place with regular
tests carried out.
Development in cyber
crime and preventative
strategies are constantly
reviewed.
=============================== ============================ ============================ =========================
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BUSINESS RISK TO COMPANY MITIGATION ASSESSMENT
AREA OF RISK OF CHANGE IN
RISK YEAR ON
YEAR
========= ===================== ====================== =================
People The Group's reliance Effective recruitment The risk is
on key management policies and ongoing however
and other personnel people development is continually
could put pressure means the Group monitored and
on the business can take full addressed.
if they were to advantage of
leave the recovery
Attracting and in its performance.
retaining high Long term incentive
calibre people share awards
is a key priority were granted
and a central to senior employees
focus in striving during the
for excellent year to more
customer service closely align
across the Group's their interests
business channels. to those of
the Group and
a SAYE scheme
is in operation.
========= ===================== ====================== =================
3. BUSINESS SEGMENTS
The majority of the Company's turnover arose in the United Kingdom, with the exception of two stores in Ireland.
IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.
Information reported to the Group's Chief Executive Officer for the purposes of resource allocation and assessment of segment performance is focused on the split of Retail and Hire.
Information regarding the Group's continuing operating segments is reported within the Financial Summary on page 5.
Only revenue and gross profit have been reported for the Group's business segments; Retail and Hire, as the main operating costs, being property, related overheads and staff, cannot be separately identifiable as they both use the same stores and hence operating profit is not reported to the Chief Executive Officer by Retail and Hire. Revenue and gross profit are the measures reported to the Chief Executive Officer for the purpose of resource allocation and assessment of segmental performance.
On the same basis, assets cannot be allocated between Retail and Hire, and are not reported to the Chief Executive Officer separately.
4. TAX
The effective tax rate on the reported profit before tax for the 26 week period to 30 July 2016 is 17.7% (1 August 2015: 23.5%; 30 January 2016: 21.2%), representing the expected average annual effective tax rate for the full year, applied to the pre-tax income of the 26 week period.
5. EARNINGS PER SHARE
Basic earnings per ordinary share is based on the weighted average of 99,992,821 (1 August 2015: 98,134,471; 30 January 2016: 99,084,852) ordinary shares in issue during the period after deducting for shares held by the Employee Benefit Trust and are calculated by reference to the profit attributable to shareholders of GBP3,005,000 (1 August 2015: GBP2,151,000; 30 January 2016: 4,605,000).
Diluted earnings per ordinary share is based upon the weighted average of 102,519,282 (1 August 2015: 103,733,646; 30 January 2016: 102,324,496) ordinary shares, which will include the effects of share options, SAYE and shares under the LTIP of 2,526,645 (1 August 2015: 5,599,175; 30 January 2016: 3,239,644), that were anti-dilutive for the period presented and could dilute earnings per share in the future and are calculated by reference to the profit attributable to shareholders as stated above.
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Basic earnings per share 26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
Pence Pence pence
------------------------------- --------- ---------- ------------
Total (continuing operations) 3.01 2.19 4.65
Continuing operations basic
earnings per share 3.01 2.19 4.65
------------------------------- --------- ---------- ------------
Diluted earnings per share 26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
Pence Pence pence
------------------------------- --------- ---------- ------------
Total (continuing operations) 2.93 2.07 4.50
Continuing operations diluted
earnings per share 2.93 2.07 4.50
------------------------------- --------- ---------- ------------
6. EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION ("EBITDA")
EBITDA as reported in the Financial Summary on page 5 is calculated as follows:
Continuing activities 26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
---------------------------- --------- ---------- ------------
Profit before tax 3,651 2,810 5,844
============================ ========= ========== ============
Deduct:
============================ ========= ========== ============
Investment revenues (33) (36) (66)
============================ ========= ========== ============
Financial costs - - 51
============================ ========= ========== ============
Add:
============================ ========= ========== ============
Depreciation of property,
plant and equipment 2,830 2,731 5,654
============================ ========= ========== ============
Amortisation of intangible
assets 413 787 1,149
============================ ========= ========== ============
Amortisation of compulsory
purchase compensation (102) (102) (204)
============================ ========= ========== ============
Other gains and losses (5) (3) (653)
============================ ========= ========== ============
EBITDA 6,754 6,187 11,775
---------------------------- --------- ---------- ------------
7. DIVIDS
The directors have declared an interim dividend of 1.91 pence per share (HY1 2015: 1.80 pence per share) payable on 25 November 2016 to shareholders on the register on 28 October 2016 with an ex dividend date of 27 October 2016.
8. RELATED PARTY TRANSACTIONS
The Group had no material related party transactions other than on an arm's length basis, which might reasonably be expected to influence decisions made by other users of the condensed set of financial statements.
TRADING TRANSACTIONS
Moss Bros agreed a sublet of a store lease to White Stuff Ltd ("White Stuff"). Debbie Hewitt, Chairman of Moss Bros Group plc, is also Chairman and Director of White Stuff. The transaction was on arms length commercial terms and Debbie Hewitt took no part in determining the commercial terms offered by Moss Bros or in the decision to accept them taken by White Stuff. The sublet is from June 2014 until December 2021 at a rent of GBP50,000 per year. A capital contribution of GBP50,000 was paid to White Stuff on completion of the agreement.
At the 30 July 2016 the balance due from White Stuff was GBPnil in respect of service charges payable in arrears.
Berkeley Burke Trustee Company Limited is considered a related party of the Group because Brian Brick, Chief Executive Officer of Moss Bros Group plc is a beneficiary of the pension fund. On 8 December 2011, Moss Bros Group plc agreed a long term lease with Berkeley Burke Trustee Company Limited, a pension fund and the superior landlord, for a store in Hounslow, on an arm's length basis.
9. SHARE BASED PAYMENTS
In 2009/10 a new equity settled Long Term Incentive Plan (LTIP) was approved by shareholders. During the period to 30 July 2016, under the same 2009/10 LTIP scheme, 879,454 shares were awarded to senior employees on 12 April 2016. In accordance with this plan, the shares are exercisable at nil cost, subject to the satisfaction of performance conditions and the requirement for the continued employment during the vesting period. The fair value is measured at grant date using the Black Scholes pricing model and recognised over the vesting period. These grants are accounted for in accordance with IFRS 2 'Share-based Payments'.
A Save As You Earn (SAYE) scheme was approved and adopted in 2012/13 and is open to all employees to benefit from the continued growth of the business. During the period to 30 July 2016, a further grant was made.
The amount recorded in the income statement for share based payments under IFRS2 in the period to 30 July 2016 was GBP317,000 (1 August 2015: GBP186,000; 30 January 2016: GBP451,000).
A deferred tax adjustment was recorded in the share-based payment reserve of GBP20,000 debit in the period to 30 July 2016 (1 August 2015: credit of GBP56,000, 30 January 2016: debit of GBP177,000).
The Group used inputs as previously published to measure the fair value of the share options.
10. HALF-YEARLY REPORT
This half-yearly report is available on application from the Company Secretary, Moss Bros Group PLC,
8 St. John's Hill, London SW11 1SA (and on the Company's website www.mossbros.co.uk).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBSVRNWAKUAR
(END) Dow Jones Newswires
September 28, 2016 02:00 ET (06:00 GMT)
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