StockMarketWire.com - Mens' suit retailer Moss Bros Group sunk into the red and scrapped its final dividend, blaming weak demand, rising costs, asset writedowns and competition.

Pre-tax losses for the year through 26 January amounted to £4.2m, compared to a profit of £6.7m on-year.

Revenue fell 2.1% to £129.0m, while like-for-like sales fell 4.3% to £140.2m.

'Given the volatile trading environment, the board is not recommending a final dividend payment, to give the business maximum flexibility for investment, whilst retaining a strong debt free balance sheet,' Moss Bros said.

'We will review our dividend policy throughout the year, considering the overall yield, balanced against the wider investment needs of the business.'

The annual loss comprised £3.8m of adjusted items including impairment charges and dilapidation provisions of £2.6m and reorganisation and employee-related charges of £1.2m.

Earnings were also hurt by lower retail store sales, weaker sterling and significant cost headwinds, while gross margin contracted 2.3 percentage points to 57.5%m partly due to a response to competitor discounting during the second half.

On a more positive note, Moss Bros said its trading performance had strengthened overall in the first eight weeks of the new financial year, but remained volatile.

Total sales are up 3.6%, while like-for-like sales were up 3.9%.

'It has been an extremely challenging year for the business on many fronts, but I am confident that we have made significant progress in a number of areas of the business,' chief executive Brian Brick said.

'However, it is disappointing to be reporting an adjusted loss before tax for the group for the first time since 2010/11.''

'In spite of the challenging backdrop, we have overall, made a good start to the new financial year.'

'The early response to the 2019 Spring/Summer retail range has been positive and the continued progress of our e-commerce channel provides us with the confidence to increase investment in this area.'




Story provided by StockMarketWire.com