Shares in Moss Bros soared 20% today, pushing them to an eight year high after the suit hire and retailer unexpectedly said it will boost its dividend payout massively.
Chief executive Brian Brick, who joined what was then a troubled business at the end of 2008, said: “We are encouraged by trading over the key Christmas trading period. The improved sales performance and continued strong cost management and rigorous clearance of stock, means that we will finish 2013/14 ahead of market expectations.”
He said that like-for-like sales in the five weeks to last Saturday had grown by 12.9% which is well ahead of the 5.3% growth seen in the preceding 19 weeks.
Perhaps even more importantly, the group ended the key sales period with much lower stocks to go into its sales. Analysts said this was in large measure due to the improved Moss Bros website, which allowed it to clear stock quickly online rather than through its stores.
The group now expects to have cash of £28 million at the year-end this month. It reckons it only needs £15 million of this to run the business, so will push the full year dividend up from 0.9p to 5p a share.
That means Brick, who was paid a relatively modest £652,000 last year, will pick up a dividend cheque for £110,000.
The shares jumped 15.75p to 90p — a level not seen since September 2005. House broker Peel Hunt raised its forecast for this year’s profits by 24% to £3.9 million and for next year’s by 10% to £4.4 million.
