- Prachi Singh |
Moss Bros Group PLC in a statement announcing half yearly results, said that total group revenue, excluding VAT, of 64.5 million pounds (84.8 million dollars), was 3.3 percent lower than the previous year, while like-for-like retail sales, including e-commerce reduced 6.9 percent. The company’s ecommerce like-for-like sales for the first half grew 9.5 percent and now represent 12.7 percent of total sales, while like for like hire sales, which represents 12.3 percent of total sales in the half on a cash taken basis were down 7.8 percent.
Commenting on the results and outlook, Brian Brick, the company’s Chief Executive Officer, said in a statement: “The first half trading performance was one of the most volatile for many years. We have reviewed our expectations for the second half of the year despite having a number of key trading weeks still ahead of us and whilst short-term cost cutting would make us more certain of mitigating the footfall related gross profit shortfall and therefore hitting the market’s expectations. As such, we have taken the decision to continue to invest and to deliver profit lower than expectations.”
Retail gross margin at 56.5 percent was 2.8 percent lower for the half, of which, the impact of weaker sterling accounted for a 1.8 percent reduction. EBITDA was 3.7million pounds (4.8 million dollars) compared to 7 million pounds (9 million dollars) restated in the first half of 2017. Adjusted profit before tax of 0.2 million pounds (0.26 million dollars), was down 3.7 million pounds versus the same period in the prior year and loss before tax of 1.7 million pounds after adjusting items of just under 2 million pounds compared to profit of 3.9 million pounds restated last year.
The company added that given the full resolution of the stock issues encountered earlier in the year, a more positive trading position post the disruption of the hot summer and the strong cash flow generation of the business, the board is recommending an interim dividend of 1.50 pence per share, in line with the dividend policy.
Moss Bros expects improved trading in the second half
Moss Bros said that retail like-for-like sales, including VAT, in the first seven weeks to September 15, 2018 are down 3.7 percent, showing an improved trend from the extreme reduction in footfall of the high summer months. Ecommerce sales, including VAT, are up 23.2 percent, while hire like for like, reported on a ‘cash taken’ basis, is 13.3 percent down in the first 7 weeks of the second half.
The company added that the group is still on track to deliver an operating profit before adjusting items, but materially lower than current market expectation of 2.3 million pounds (3 million dollars).