MOSB – Moss Bros – the broader picture

MOSB (Moss Bros) issued a trading statement today, sending its shares down 15% to 76.4p. In one breath it said that it “continued to make progress”, but in another it refers to “lower footfall than anticipated”. The full year profit before tax is therefore expected to be slightly below current market expectations.

We are confident of our ability to continue to deliver enhanced returns to our shareholders

Sure. Whatever.

I am aware that some investors out there have made a lot of money in MOSB, so who am I to judge? Whenever I have taken a look at the numbers, I have always figured that MOSB is basically a “lifestyle business”. In other words, it brings in sufficient money to keep the directors and employees in gainful employment, but there’s really not much in it for investors. Perhaps if the directors were more skilled, the company fortunes would make a better showing.

To illustrate what I mean, MOSB reported revenues of £124m in 2003. For 2016, that figure was £128m. It has been bumping along at around those levels in between. It has even eliminated dividends.

Meanwhile, socks and pants retailer NXT (Next) has seen revenues rise from £2516m to £4097m. It has reduced its share count significantly, and its dividends per share has risen from 35p to 158p. That’s not to be sniffed at.

MOSB is on a PE of 15 (before today’s fall), which I would have thought was “high enough”. It pays a chunky dividend (which is uncovered, though), and has net cash. So there’s that. It has a Stockopedia StockRank of 91, but I’m finding it difficult to become excited about this share.

Just my 2 cents.

Stay safe out there.





About mcturra2000

Computer programmer living in Scotland.
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