The Investment column: Moss Bros keeps going like Blazers
Tuesday 08 April 1997
The reason was another cracking set of results, with pre-tax profits up 41 per cent to pounds 15.9m in the year to January. The figures were boosted by a maiden pounds 428,000 contribution to operating profits from the Blazer chain, acquired from Storehouse last June. But underlying that there was still a very healthy 38 per cent improvement from existing operations.
There is still clearly bags of potential in Moss Bros. Despite extra costs involved in integrating the business, Blazer alone produced more profits in seven and a half months with the group than it achieved in the whole of the previous year, yet margins are less than a third of the average.
The new brand fits into a clutch of high street names which have given Moss near-complete coverage of the market, ranging from Suit Company and Savoy Taylors Guild in the bottom and middle ranges to the likes of Hugo Boss at the fashion end, where from this June it will be joined by the first Yves Saint Laurent branch. Together they have given Moss a tenth of the suit market, a sector whose death was being heralded 10 years ago, but which has been growing at 3 per cent a year since 1992.
Now 164 shops-strong, Moss has identified up to 60 more sites around the country. With net cash of pounds 22.7m, it is well placed to pick and choose. Profits may hit pounds 19m this year, but even with current sales 7.5 per cent ahead and a four-for-one-stock split, the shares look high enough on a forward multiple of 20.
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