(Alliance News) - Moss Bros Group PLC said Tuesday its interim loss widened on one-off costs and a narrowed gross margin, despite slight growth in revenue.
The men's formal wear retailer said it has launched its new 'eco suit', made from recycled materials, with canvas and trims chosen for their low impact on the environment, including Corozo nut buttons.
For the six months ended July 27, Moss Bros reported a pretax loss of GBP2.7 million, widened from GBP1.7 million the year before.
The bigger loss was due to a one-off interest expense of GBP1.5 million, and GBP1.6 million in adjusting items, consisting of store impairments and reorganisation costs.
On an adjusted basis, the group swung to a pretax loss of GBP1.1 million from a profit of GBP235,000.
Gross profit declined marginally to GBP37.6 million from GBP37.7 million, as gross margin lowered to 57.5% from 58.5%, and Moss Bros' Hire business suffered a weaker profit performance.
Total revenue for the period grew by 1.4% to GBP65.4 million from GBP64.5 million. Like-for-like retail sales including online sales grew by 2.9%, while the Hire business saw a 15% decrease in like-for-like sales.
The group's total like-for-like sales increased by 0.4%.
Moss Bros did not declare an interim dividend, on the grounds of an ongoing volatile trading environment and the desire to retain maximum flexibility for investment.
For the same period the year before, Moss Bros declared a dividend of 1.50 pence per share.
Looking ahead, Moss Bros said its performance in the first eight weeks of its second half was consistent with its full-price focus and with less old-season stock to clear.
Moss Bros expects to deliver a performance for the year ending January 27, 2020 to be in line with market expectations.
"Reflecting on our first half performance, it feels that we are gaining traction in a number of areas. The return to growth of our stores is extremely important to us and we will continue to focus on maintaining this trend. The growth which we have seen in stores is set against a backdrop of lower footfall in our stores than last year in most locations in which we operate," said Chief Executive Officer Brian Brick.
"We are acutely aware of the challenges which we face in our Hire business. We plan to invest in a focused way in updated product to ensure that we remain relevant in terms of product offer. We are also actively investigating what newer and fresher hire or rental services can be offered to address changing customer requirements as soon as Spring next year," Brick added.
Moss Bros said each of its new eco suits are made from 45 recycled plastic bottles, with the lining and thread made of post-consumer recycled polyester. The suit retails for GBP169 and is made in India.
Shares in Moss Bros were up 5.7% at 20.32 pence on Tuesday.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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