Moss Bros, the men’s wear retailer embroiled in an acrimonious takeover process, sank to a full-year loss amid sluggish sales on the high street.
Philip Mountford, chief executive, defended his stewardship of the retailer, which has been criticised by some shareholders angry at the possibility of an acquisition “on the cheap” by Baugur, the Icelandic investment group.
“I’ve had one bad year and I’ve got a proven track record,” said Mr Mountford. Asked if he was frustrated by comments on the situation, he said: “I’ve laughed a lot.”
Family shareholders, who are believed to hold a combined stake of more than 25 per cent in Moss Bros, have said the company has not been sufficiently active at exploiting overseas sourcing.
Mr Mountford said he had increased sourcing in east Asia from 27 per cent to more than 70 per cent and noted that there were natural limits to low-cost supply as some clothing came from outside brands such as Ted Baker.
Revenues for the year to January 26 fell £3.7m to £130.2m, while like-for-like retail sales were flat.
The company made a pre-tax loss of £1.38m, compared with a pre-tax profit of £5.1m in the previous year.
The company said that in view of the possible £40m offer, it was not proposing a final dividend this year but would pay a special dividend if the talks failed.
Total dividends for the year, following the declaration and payment of the interim dividend, were 0.5p, compared with 1.8p last time.
Shares in Moss Bros edged up ¼p to 47p.
Baugur has submitted an indicative offer of 42p a share and is conducting due diligence.
The struggling menswear retailer, which has opened its books to the Icelandic investment group after an indicative cash offer of 42p a share, said its results were in line with expectations and “reflect the effects of deteriorating retail markets, particularly in menswear.”
“Continuing increases” in property and utility costs had also squeezed profitability and the group said it expected a “challenging” year.
Moss Bros, which made a profit last year of £5.1m, said that in view of the possible £40m offer for the company the board was not proposing a final dividend this year. Total dividends for the year, following the declaration and payment of the interim dividend, were 0.5p which compared with 1.8p last time.
However, it said it intended to pay a 1.3p special dividend if Newco, the vehicle formed by Baugur and its investment partners, did not announce a firm intention to make an offer or if the proposed offer was withdrawn or lapsed.
Baugur has maintained that it is not affected by the economic turmoil in Iceland, where the central bank raised interest rates to 15 per cent in an effort to combat inflation, increasing borrowing costs for the country’s highly leveraged banks and investors.
Revenues at Moss Bros for the year to January 26 were down 2.7 per cent at £130.17m while like-for-like retail sales were flat.
Losses per share were 1.44p compared with earnings last time of 3.44p.
The shares were flat in early trade at 46¾p.
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