MOSB.L Regulatory News (MOSB)

For immediate release 5 April 2016

MOSS BROS GROUP PLC

Unaudited preliminary results for the 52 weeks ended 30 January 2016

Continued Good Progress

Moss Bros Group PLC ("the Group"), the 'first choice in men's formalwear', today announces its Preliminary Results, covering the period from 1 February 2015 to 30 January 2016.

Financial Highlights

· Group like-for-like* sales of £119m, including VAT, up 8.2% (2014/15: up 5.5%):

- Like-for-like* retail sales up 7.6% (2014/15: up 7.1%)

- Like-for-like* hire sales, representing 14% of sales, up 11.7% (2014/15: down 3.6 %)

· E-commerce sales up 36.3%, now 10% of total sales.

· Underlying** profit before tax up 23.1% at £5.9 m (2014/15: £4.8m).

· EBITDA*** up 27.8% to £12.4m (2014/15: EBITDA*** £9.7m), driven by improved sales and tight control over costs.

· Gross margin improved in total for the year by 1.5% to 59.8% due to lower levels of discounting.

· Strong cash balance of £17.3m (31 January 2015: £19.6m) following ongoing investment in store refit programme. Cash generated from operating activities of £11.6m (2014/15: £5.2m).

· Basic earnings per share, on continuing operations before exceptional items, of 4.71 pence (2014/15 restated: 3.60 pence per share). Basic earnings per share, on continuing operations, after exceptional items, of 4.65 pence (2014/15 restated: 3.60 pence). EPS restated due to prior year tax charge adjustment - see note 7.

· Final dividend proposed of 3.75 pence, total dividend for the year 5.55 pence, up 5.7% on the previous year (2014/15: total dividend 5.25 pence).

Operational Highlights

· A strengthening brand identity, from an increasing proportion of refitted stores and better defined master and sub brands, has underpinned our full price offer. This, along with a stronger product offering, has improved the level of full price sales and gross margins.

· The store refit plan has been accelerated, with 81 stores now trading in the new store format. They are performing to expectations.

· Added to the strength of the senior team with the recruitment of a People Director, COO and Customer Director, which is sharpening focus on our service delivery.

Current trading

· Group like-for-like* sales, including VAT, in the first 9 weeks of the new financial year are up 5.2% with growth seen across in-store retail, e-commerce and hire. 

· Tailor Me, a more accessible bespoke offer, has now been launched and will be rolled out across all stores by September 2016

Commenting on the results and outlook, Brian Brick, Chief Executive Officer, said:

"We continue to make strong progress in the delivery of our strategic priorities. The modernisation of the store portfolio, which is nearing completion, is achieving the anticipated returns and we have well developed plans for the implementation of our multi-channel shopping environment. We have added to the strength of the management team and we are well placed to take advantage of these opportunities to accelerate our growth.

The early response to the 2016 Spring/Summer retail range has been positive and retail like-for-like* sales and gross margins are continuing to improve year on year. The broadening of our Hire offer to include lounge suits is underpinning a positive start to the 2016 hire season.

The Group's trading performance continues positively, in line with the Board's expectations."

*Like-for-like represents financial information for stores open during both the current and prior financial periods and compares 52 weeks against 52 weeks, except for stores refitted in the period, where the period closed for refit is excluded from both the current and prior financial periods. Like-for-like Hire sales are calculated on cash receipts in the period, before adjustment for the movement in the level of hire deposits held.

**Underlying represents results before exceptional items as defined in note 1 of the Annual report

***EBITDA is earnings before interest, tax, depreciation and amortisation.

For further information please contact:

Moss Bros Group Plc: 0207 447 7200

Brian Brick, Chief Executive Officer

Robin Piggott, Finance Director and Company Secretary

Buchanan: 0207 466 5000

Charles Ryland/Victoria Watkins/Catriona Flint

CHAIRMAN'S STATEMENT

I am pleased to report another year of strong progress for the Group.

Total like-for-like* sales including VAT reflected an 8.2% increase on the prior year. Underlying profit before taxation was up 23.1% to £5.9m, compared with £4.8m in the previous year. EBITDA** continued on a positive trend to £12.4m, compared with £9.7m in the previous year. Similarly, our cash position continues to be very strong, supporting the investment in additional hire stock, the ongoing refit programme and a progressive dividend policy.

The retail environment remained highly competitive during the year, with heavy discounting. We remained focused on our core offer and the strengthening of our product range and traded our way through what was for us and most retailers a significant shift in consumer buying patterns, including a stronger emphasis online.

The Moss Bros master brand is now well established and our attention has turned to the development of the supporting sub-brands of Moss London, Moss 1851, and Moss Esq. The brands are beginning to have resonance with individual customer segments, with stronger in-store and online brand positioning. We will track progress on this in the coming year.

Actions to develop our product offer have included the launch of 'Tailor Me', a more accessible form of bespoking, which will allow a significant proportion of our suit range to be personalised. Following a successful pilot, this is now available in 25 stores and will be rolled out across the entire estate by September 2016.

We accelerated the store refit programme this year and 81 stores now trade in the new store format, which means almost two thirds of our store estate has been modernised. As planned, this increased investment has impacted cash in the short term but the proven three year payback means we will quickly recoup the funds invested and accelerate the more premium positioning of our brands amongst our target customers.

We continued the development of the organisation and our talent by recruiting a People Director, Sara Gomez, early in the financial year and subsequently a Chief Operating Officer, Paula Minowa, to accelerate the development of our multi-channel and international aspirations.

In September 2015, Robin Piggott, the Group's Finance Director announced his intention to retire from the Board at the Company's AGM in May 2016. On behalf of the Board, I would like to express our appreciation for the substantial contribution that Robin has made during his tenure and for his ongoing support in handing over to his successor, Tony Bennett, who will join as Group Finance Director no later than August 2016. Tony joins from Charles Tyrwhitt, the multi-channel Menswear retailer. He has a deep commercial background in online, multi-site and international consumer businesses, with highly relevant experience in Menswear and we look forward to welcoming him to the Company and the Board.

The team continues to apply strong cash and working capital controls and the business continues to be debt free, with a healthy cash balance, supporting the Board's progressive dividend and investment policies.

The Board is proposing the payment of a final dividend of 3.75 pence per share to be paid on 24 June 2016 to all shareholders on the register on 3 June 2016 (ex dividend date 2 June 2016).The total dividend for the year is 5.55 pence per share, an increase of 5.7% on the previous year. It is our intention to continue this progressive dividend policy balanced against the wider investment needs of the business.

Although we see a continuation of competitive market conditions, we are well placed to build on our specialist credentials, to grow our market share and to enhance our position as 'the first choice in men's formalwear'.

Finally, I would like to thank all of our people for their continued dedication, hard work and contribution to another successful year for the Group.

DEBBIE HEWITT

CHAIRMAN

05 April 2016

*Like-for-like represents financial information for stores open during both the current and prior financial periods and compares 52 weeks against 52 weeks, except for stores refitted in the period, where the period closed for refit is excluded from both the current and prior financial periods. Like-for-like Hire sales are calculated on cash receipts in the period, before adjustment for the movement in the level of hire deposits held.

**EBITDA is earnings before interest, tax, depreciation and amortisation.

CHIEF EXECUTIVE'S REVIEW

REVIEW OF OPERATIONS 

The Group has continued to make good progress through the year. The planned acceleration of the store refit programme in 2015/16 means that 81 of our 124 stores are now trading in the new format at the year end. This, combined with continual product and brand development, has meant that our customer offer now has the resilience to sustain a more focused promotional calendar, resulting in less discounting and improved gross margins. Building brand equity in this way gives us a strong grounding to exploit and develop our proposition as a multi-channel retailer.

RETAIL

We have continued to implement operational improvements across the business and the acceleration of our programme of refitting stores in 2015/16, has combined with these improvements to boost like-for-like* sales, which were up by 7.6% on the previous year (2014/15: up by 7.1%). Retail gross margins improved on the previous year by 2.2 percentage points as a result of more focused promotional activity. The promotional activity around Black Friday, held over the last weekend of November, again generated significant customer interest across stores and online, although this year we were able to manage our exposure to discounting more effectively through a carefully targeted campaign. Stock levels have been kept closely under control throughout the year.

As planned, we opened four new stores and closed ten in the UK during the year. A further four stores were relocated into larger sites in better locations. We are considering further new store opening opportunities in the UK in the next 12 months and currently have 3 confirmed openings for 2016.The Group now trades from 124 stores (31 January 2015: 130 stores).

The inherent flexibility in our property estate gives us options in what we anticipate will be a fast changing retail landscape. The average lease length across the store portfolio is 59 months and we are targeting improved lease terms on renewal, of a 10 year term, with a tenant only break clause at year 5. The underpinning of hire and the demand for e-commerce 'click & collect' and 'click & return' points, together with advantageous lease deals, means there is an opportunity to expand our store footprint on a selective and cost effective basis, with good returns.

HIRE

Overall like-for-like* hire sales increased by 11.7% in the year, reflecting the recovery in wedding hire in the year. The broadening of the range to include lounge suits has proved very successful and has received very positive customer feedback. The full review of our hire operation in 2014 led to a number of operational changes to improve quality, product availability and customer experience and these are now driving profitable growth. Weddings, evening wear, Royal Ascot and school proms all showed good levels of growth. We have invested further in new hire stock, supplementing our lounge suit offer with two new styles and adding to our branded ranges, which have proved popular.

We are confident our position as the leading hire brand will be maintained through the product and technology initiatives currently underway.

E-COMMERCE

Sales performed very strongly, with sales up 36.3% on the previous year. Online sales now represent 10% of total sales (2014/15: 7.8%). Site traffic, conversion and retention rates are all on improving trends. The mobile and tablet sales were particularly strong and now comprises 37% of total e-commerce sales.

Expansion into international markets has been refocused to concentrate on dedicated, local currency sites for the Republic of Ireland, Australia and the USA. E-commerce has also proved to be a very efficient means of clearing end of line stock with faster sell through rates and an improvement in prices achieved.

The hire website continues to gain traction and we believe it is capable of further growth. Results are encouraging and the incidence of wedding hire customers beginning their journey online before engaging with our stores to complete the transaction supports our view that hire can become a truly multi-channel experience. Based on customer feedback a number of enhancements are planned for 2016 to improve the customer experience and subsequent conversion rates.

SUPPLY CHAIN AND COSTS

The earlier clearance of residual stocks has enabled new seasons' stock to be introduced into stores earlier, improving the customer offer and enabling much greater scope for tactical promotions.

The increase in direct sourcing of stock from the Far East has increased our exposure to foreign exchange risk, which is mitigated by our hedging policy.

PEOPLE

The recruitment of a People Director in 2015 has enabled us to start the next stage of the development of our service offer. Plans are in place to establish a service culture within the business to support our aim to become the 'first choice in men's formalwear' through the delivery of excellent customer service. Investment in people in the form of recruitment, induction, performance appraisal and performance management continues with a range of programmes available and increased numbers of colleagues being trained.

FINANCIAL REVIEW

Performance improvement across the business continued in 2015/16 with strong like-for-like* sales growth and continued control over costs.  Underlying profit before taxation on continuing operations was £5.9m, compared with a profit of £4.8m in the previous year, an increase of 23.1%.

REVENUE

Overall revenue was up 5.5% (up 8.2% like-for-like*) on the previous year to £121.1m. Retail was up 5.5% (up 7.6% like-for-like*) on the previous year. Hire was up 5.6% (up 11.7% like-for-like) on the previous year.

GROSS MARGIN

Underlying overall gross margin increased by 1.5% in the year (59.8% vs 58.3%), due to more targeted promotional campaigns leading to lower levels of discounting.

COSTS

Administrative and shops' selling and marketing costs before exceptional items increased by 7% on the prior year, as planned. Costs remain tightly controlled with expenditure focused on areas that will add value and support the development of the Group.

EXCEPTIONAL ITEMS

Exceptional items are significant items of an unusual or non-recurring nature which are disclosed separately in the Income Statement to provide a clearer understanding of the underlying financial performance in the period. See note 5 for further details.

An exceptional credit and an exceptional debit were incurred during the year, and in accordance with our accounting policies have been separately reported as exceptional, due to their size and one-off nature.

An exceptional credit was received following the negotiated exit from a retail location where the landlord paid compensation, for the release of certain lease obligations, of £650,000.

An exceptional charge of £748,000 was incurred in respect of property dilapidations. As a result of the portfolio of stores increasingly moving away from the high street and towards shopping centres and retail parks, we have refined our estimation technique for calculating the dilapidation provision.

Given this change in estimate and the unusually high number of dilapidation claims received in the period there has been a large dilapidations charge to the income statement. While dilapidation claims are generally part of the underlying operations of the business, the size of the charge to the income statement in the current year means that this meets our definition of an exceptional item. In the period ended 31 January 2015, a charge of £100,000 was included in underlying performance and in future years the charge to the income statement is anticipated to be of a similar level to this.

EARNINGS PER SHARE

Basic earnings per share on total earnings were 4.65 pence (after exceptional items) compared with 3.60 pence (restated) per share last year. Diluted earnings per share, on total earnings, were 4.50 pence (after exceptional items) per share compared with 3.41 pence (restated) per share last year.

TAXATION

The Group's effective tax rate for 2015/16 is 21.2% compared with 27.8% (restated) for 2014/15. The comparative tax charge has been restated to reflect that the benefit of corporation tax deductions arising from the exercise of employee share options should be recognised in the income statement only up to the level of the total IFRS2 charge for these options, with benefits in excess of this recognised directly in retained earnings. In the prior period the corporation tax deduction exceeded the IFRS 2 charge and therefore £403,000 should have been reflected in retained earnings rather than as a reduction in the tax charge. This has been corrected in the prior period comparables included in these accounts as set out in note 7.

DIVIDEND

Given the strong progress made in 2015/16 and ongoing cash generation the Board feels it is appropriate to propose the payment of a final dividend of 3.75 pence per share (2014/15: 3.55 pence) bringing the total for the year to 5.55 pence per share, compared with 5.25 pence per share for the year ended 31 January 2015, an increase of 5.7%. The final dividend is to be paid on 24 June 2016 to all shareholders on the register as at 3 June 2016 (ex dividend date 2 June 2016).

INVESTMENT

Total capital expenditure in the year was £9.5m (2014/15: £8.0m) and depreciation and amortisation was £6.6m (2014/15: £5.0m). This included the opening of four new stores, four store relocations and the refurbishment of 16 stores. The total capital expenditure included further investment in new Moss Bros hire inventory of £2.4m (2014/15: £1.4m), whilst depreciation on hire inventory was £1.5m (2014/15: £0.9m).

CASH AND LIQUIDITY

The year end cash balance was £17.3m compared with £19.6m last year as a result of investment in store refits and hire stock, and payment of dividends in line with our progressive dividend policy.

INVENTORY

The mix of inventory in the business was re-geared during the year to ensure sufficient inventory was available to support sales across the business including earlier intake of new season's lines to maximise full price sales and gross margin. Stock at the year end was £14.4m. (2014/15: £15.7m).

TRADE AND OTHER PAYABLES

The terms and conditions with our suppliers are reviewed and adjusted so as to maximise the average cash balance, whilst improving the product gross margin.

FUTURE DEVELOPMENTS

The Board believes Moss Bros has an exciting future, with the growth of e-commerce underpinning the move to full multi-channel retailing. The adoption of Moss Bros as the master brand, supported by complementary sub brands and introduction of carefully targeted marketing activity has proved very successful. In order to maximise this opportunity, and with the increasing role that digital has to play in marketing, we are adding resource and capability in 2016 to support our multi-channel proposition. Continuity of brand presentation and pricing across all our channels is paramount in ensuring excellent customer service and therefore customer experience. The introduction of customer relationship management ("CRM") and a customer services database will enhance the customer experience and perceptions of the brand. Our investment in our People Strategy and establishment of a service culture across the business are critically important to the future of the business. Our bespoke suit proposition has been redefined and re-launched as "Tailor Me" in 25 stores, with rollout across the estate by September 2016. The new proposition is a clear and simple proposition for customers and offers an easier ordering process and faster delivery times.

RETAIL

The store refit programme is now entering its fifth year and the acceleration of the refit programme in 2015/16 means that 81 stores are now trading with the new look store format. Given the strength of our combined retail and hire offer we are continuing to seek expansion opportunities both through new outlets and relocations where we move to larger better positioned sites.

HIRE

We will continue to leverage the opportunities to grow our market share through all distribution channels including online. Investment in new product areas in 2015, such as lounge suits, has proved very successful and further investment is planned for 2016. Investment in new hire stock reached £2.4m in 2015 and is planned at a further £2m in 2016

Early season bookings for 2016 are showing an encouraging trend, with lounge suits again proving popular and the business is in excellent shape to gain market share.

Moss Hire also offers one of the most significant opportunities to develop our customer offer by leveraging the rich source of customer data, many of whom are currently unaware of, or do not consider the Moss Retail offer. We believe the opportunities for CRM, in the context of a multi-channel offer, are significant.

E-COMMERCE

We plan to exploit further growth opportunities both in the UK and overseas by strengthening our e-commerce team and building on our success and leveraging the advantages that full multi-channel capability will bring, including CRM.

SUPPLY CHAIN & COSTS

Our supply chain continues to be of significant importance in delivering service and efficiencies.

We anticipate central costs will increase in line with turnover in 2016/17 as we increase our investment in our multi-channel capability.

Capital expenditure for 2016/17 is estimated at £9m, including £3.3m for 20 store refits and £2m for hire stock.

INFRASTRUCTURE

We successfully upgraded our point of sale and e-commerce pick pack and despatch systems in 2015, marking the completion of the project, started in 2014, to upgrade all our main IT systems. We will continue to invest in IT as appropriate to ensure that we support the development of the business in all areas.

As well as introducing latest technology, the upgrade will improve business efficiency and our customer experience.

With the introduction of multi-channel, growth of e-commerce and shortening of product lead times, the efficiency of the Distribution Centre ("DC") is central to our ability to serve our customers. Following the investment made in IT in 2014/15 and 2015/16 we are currently reconfiguring space within the DC to increase capacity and capability to support business growth.

PEOPLE

To mark the start of the implementation of our People Strategy we have launched the first of what will be an annual company-wide employee survey. The launch of the 'Moss Bros Way' has been well received by staff across the business and provides a clear direction across four themes:

· Proud to Sell

· Customer for Life

· Passionate Experts

· Winning Teams

This, combined with improved recruitment and training, should lead to increased staff retention and a focus on career paths with a sharper focus on internal promotion wherever possible and appropriate.

The results of these initiatives will provide the basis from which to develop a culture across the business to underpin excellent customer service and customer satisfaction, within a multi-channel environment.

OUTLOOK

We continue to make good progress in the delivery of our strategic priorities. The modernisation of the store portfolio is achieving the anticipated returns and we are continuing to make good progress on the implementation of a multi-channel proposition. Our people strategy will be an important part of the future development of the Moss Bros brand through improvements in our customer experience and customer satisfaction and retention.

Hire is performing well and we are well placed to optimise revenues in the 2016 Wedding season. The early response to the 2016 Spring/Summer retail range is positive, with retail like-for-like* sales and gross margin continuing to improve year on year as we move out of the winter clearance activity.

The Group's trading performance continues positively, in line with the Board's expectations.

BRIAN BRICK

CHIEF EXECUTIVE OFFICER

05 April 2016

*Like-for-like represents financial information for stores open during both the current and prior financial periods and compares 52 weeks against 52 weeks, except for stores refitted in the period, where the period closed for refit is excluded from both the current and prior financial periods. Like-for-like Hire sales are calculated on cash receipts in the period, before adjustment for the movement in the level of hire deposits held.

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

FOR THE 52 WEEKS ENDED 30 JANUARY 2016

* Restated, see Note 7 for details

** Underlying represents results before exceptional items as defined in note 1 of the Financial Statements

CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY

FOR THE 52 WEEKS ENDED 30 JANUARY 2016

 *Restated, see Note 7 for details

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

AS AT 30 JANUARY 2016

CONSOLIDATED CASH FLOW STATEMENT

FOR THE 52 WEEKS ENDED 30 JANUARY 2016

*Restated, see Note 7 for details

1. Basis of preparation

The financial information set out in the announcement does not constitute the Group's statutory accounts for the periods ended 30 January 2016 or 31 January 2015. The financial information for the period ended 31 January 2015 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006. The audit of the statutory accounts for the 52 week period ended 30 January 2016 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in April 2016.

From the Group's perspective, there are no applicable differences between IFRS adopted for use in the European Union and IFRS as issued by the International Accounting Standards Board.

The accounting policies adopted by the Group for the 52 weeks ended 30 January 2016 in these consolidated preliminary results are consistent with those adopted by the Group in its consolidated financial statements for the 53 weeks ended 31 January 2015.

2. Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and the Chief Executive's Business Review. The latter describes the financial position of the Group, its cash flows, liquidity position and funding, together with the Group's objectives.

The Board of Directors has undertaken a recent thorough review of the Group's budgets and forecasts and has produced detailed cash flow projections which take account of reasonably possible changes in trading performance. These cash flow projections show that the Group is expected to operate within the level of its current surplus cash balances.

After making enquiries, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future.

3. Earnings per share

Underlying** basic earnings per ordinary share is based on the weighted average of 99,084,852 (2014/15: 96,760,838) ordinary shares in issue during the period after deducting for shares held by the Employee Benefit Trust and are calculated by reference to the profit attributable to shareholders of £4,669,000, excluding exceptional items (2014/15 restated: profit of £3,485,000 ).

Underlying** diluted earnings per ordinary share is based upon the weighted average of 102,324,496 (2014/15: 102,254,592) ordinary shares after deducting shares held by the Employee Benefit Trust, that were non-dilutive for the period.

*Restated, see Note 7 for details

**Underlying represents results before exceptional items

4. Revenue and operating segments

Revenue

Revenue comprises sales to third parties (excluding VAT) and is derived from the retail sale and hire of clothing and ancillary goods. Revenue is recognised on exchange of goods. The exchange of goods occurs when the hire clothing and other goods are collected for use by the customer. At this point it is deemed that all risks and rewards have been transferred. Hire and Bespoke deposits are held within deferred revenue until this date. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Operating Segments

The majority of the Company's turnover arose in the United Kingdom, with the exception of two stores in Ireland.

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive Officer to allocate resources to the segments and to assess their performance.

Information reported to the Group's Chief Executive Officer for the purposes of resource allocation and assessment of segment performance is focused on the split between Mainstream Retail, Bespoke and Hire. Given the similarities between Mainstream Retail and Bespoke, they meet the aggregation criteria under IFRS 8, therefore are both reported under Retail.

Information regarding the Group's operating segments is reported below.

The following is an analysis of the Group's revenue and gross profit in the current and prior period.

The accounting policies for the reportable segments are the same as the Group's accounting policies described in note 1 of the Annual Report.

Only revenue and gross profit have been reported for the Group's business segments; Retail and Hire, as the main operating costs, being property, related overheads and staff, cannot be separately identified as they both use the same stores and hence operating profit is not reported to the Chief Executive Officer split by Retail and Hire. Revenue and gross profit are the measures reported to the Chief Executive Officer for the purpose of resource allocation and assessment of segmental performance.

On the same basis, assets cannot be allocated between Retail and Hire, and are not reported to the Chief Executive Officer separately.

5. Exceptional items

An exceptional credit has been received following the negotiated exit from a retail location where the landlord paid compensation, for the release of certain lease obligations, of £650,000.

An exceptional charge of £748,000 was incurred in respect of property dilapidations. As a result of the portfolio of stores increasingly moving away from the high street and towards shopping centres and retail parks, we have refined our estimation technique for calculating the dilapidation provision.

Given this change in estimate and the unusually high number of dilapidation claims received in the period there has been a large dilapidations charge to the income statement. While dilapidation claims are generally part of the underlying operations of the business, the size of the charge to the income statement in the current year means that this meets our definition of an exceptional item. In the period ended 31 January 2015, a charge of £100,000 was included in underlying performance and in future years the charge to the income statement is anticipated to be of a similar level to this.

6. Taxation

Corporation tax is calculated at blended rate 20.16% (2014/15: 21.32%) of the profit chargeable to taxation for the year.

*Restated, see Note 7 for details

7. Prior year restatement

The benefit of corporation tax deductions arising from the exercise of employee share options should be recognised in the Income Statement only up to the level of the total IFRS2 charge for those options. Corporation tax benefits in excess of this IFRS2 charge should be recognised directly in the Consolidated Statement of Changes in Equity rather than as a credit against the tax charge in the Income Statement. This has been amended as a prior year adjustment in the period ended 31 January 2015 resulting in the tax charge for the period increasing by £403,000 and reducing profit after tax by the same amount and with the corresponding credit recognised in Consolidated Statement of Changes in Equity. There has been no overall impact on net assets at 31 January 2015 and no impact on brought forward net assets at 26 January 2014.

The impact of the restatement on earnings per share for the year ended 31 January 2015 is detailed below: