TIDMMOSB
RNS Number : 6152C
Moss Bros Group PLC
19 April 2017
Moss Bros Group Plc (the "Company" or the "Group")
Annual Financial Report - DTR 6.3.5 Disclosure
19 April 2017
Following the release on 28 March 2017 of the Company's
preliminary results announcement for the 52 week period ended 28
January 2017 (the "Preliminary Announcement"), the Company
announces that its annual report and accounts for the 52 week
period ended 28 January 2017, notice of Annual General Meeting for
2017 and form of proxy for use at the Annual General Meeting of the
Company are being issued to shareholders today.
The Annual General Meeting of the Company is to be held on 19
May 2017 at 12 noon at the Company's registered office, 8 St John's
Hill, Clapham, London, SW11 1SA. Copies of the Annual Report and
Accounts, the Notice of Annual General Meeting and form of proxy
are available on the Investor Relations page of the Company's
website http://corp.moss.co.uk/
Copies of the Annual Report and Accounts, the Notice of AGM and
the Proxy Form will shortly be available for inspection at the UK
National Storage Mechanism at
http://www.morningstar.co.uk/uk/NSM
Tony Bennett
Company Secretary
COMPLIANCE WITH DISCLOSURE AND TRANSPARENCY RULE 6.3.5
EXTRACTS FROM THE ANNUAL REPORT AND ACCOUNTS
The information below, which is extracted from the 2017 Annual
Report and Accounts, is included solely for the purpose of
complying with DTR 6.3.5 and the requirements it imposes on issuers
as to how to make public annual financial reports. It should be
read in conjunction with the Company's Preliminary Announcement
issued on 28 March 2017. Together these constitute the material
required by DTR 6.3.5 to be communicated to the media in unedited
full text through a Regulatory Information Service. This material
is not a substitute for reading the full 2017 Annual Report and
Accounts. Page numbers and cross-references in the extracted
information below refer to page numbers and cross-references in the
2017 Annual Report and Accounts.
The information contained in this announcement and in the
Preliminary Announcement does not constitute the Group's statutory
accounts as defined in the Companies Act 2006 but is derived from
those accounts. The statutory accounts for the 52 week period ended
28 January 2017 have been approved by the Board and will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting which will be held on 19 May 2017. On 28
March 2017, the Group announced its draft financial statements for
the 52 week period ending 28 January 2017. The auditors have
subsequently reported on those accounts, which were unchanged,
their reports were unqualified, did not draw attention to any
matters by way of emphasis and did not contain statements under
s498(2) or (3) Companies Act 2006 or equivalent preceding
legislation.
DIRECTORS' RESPONSIBILITY STATEMENT
The following statement is extracted from page 30 of the 2017
Annual Report and Accounts and is repeated here for the purposes of
complying with Disclosure and Transparency Rule 6.3.5. This
statement relates solely to the 2017 Annual Report and Accounts and
is not connected to the extracted information set out in this
announcement or the Preliminary Announcement.
The Directors are responsible for preparing the Annual Report,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and have chosen to prepare the parent company financial
statements under IFRSs as adopted by the EU. Under Company law the
Directors must not approve the accounts unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
period.
In preparing these financial statements, International
Accounting Standard 1 requires that Directors:
-- properly select and apply accounting policies;
-- present information including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board monitors principal risks and uncertainties and
implement measures to mitigate their risk on the business. An
assessment of these is shown below.
BUSINESS AREA RISK TO COMPANY MITIGATION OF RISK ASSESSMENT OF CHANGE IN
RISK YEAR ON YEAR
---------------------------- ---------------------------- ---------------------------- ----------------------------
Hire The Hire business demands We have a dedicated The risk is ongoing;
the highest level of customer service team which however we have expanded
customer service. actively seek to resolve our customer service team
This is delivered through a any customer service and have carried out
highly developed and issues arising. a full review of all
efficient infrastructure We are continually systems and processes.
which enables consistent refreshing and replenishing
'delivery to promise'. our stock of hire garments
Any disruption to this to ensure we are
infrastructure would affect able to cater for all
our ability to maintain occasions whenever they
customer service fall due.
levels. We have previously
strengthened our market
position through the
introduction of a new
transactional
Hire website and back-end
system improvements are in
development.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Retail and Tailor Me Factors outside our We continually focus on The risk has remained
control, such as an maintaining our product consistent.
economic downturn affecting quality, customer service The macro risks associated
the UK or any wider and supplier relationships, with the EU referendum are
economic whilst retaining our difficult to quantify until
downturn as a result of the competitive position, we have
vote to leave the EU, may including value and further clarity on
have a material adverse pricing. timelines and approach from
effect on results both UK government and EU
. Foreign currency exposure, negotiators.
As a retail business based principally the US Dollar,
and operating predominantly is hedged for between 6 to
in the UK, we are 9 months
particularly exposed in advance.
to any economic downturn in
the UK which could affect
consumer confidence and
therefore spending.
---------------------------- ---------------------------- ---------------------------- ----------------------------
E-Commerce Customer satisfaction is as We are continually With the continuous
important online as developing our website increase in trade through
offline. offering in order to become e-commerce and the market
Ease of navigation/ability fully multi-channel. trend on moving to
to transact quickly on the Our Retail website has a fully multi-channel
website is key to continued to see increases operation, the risk has
generating sales online. in conversion rates and increased during the year.
Maintaining a competitive average order values.
edge through customers We have developed a fully
being able to interact with responsive website during
the product online, the year which provides a
offering product choice and more appropriate
availability, and allowing browsing experience for the
multiple payment and increasing proportion of
delivery options visitors to the site using
are important in growing mobile or
our online presence. tablet technology.
Ensuring a secure online We have security policies,
marketplace is also vital rules and technical
for customers to be able to measures in place to
transact safely. protect customer data.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Brand image Maintaining our store We are undergoing a store The risk has been reduced
presentation is important redevelopment programme to during the year with the
for attracting customers both modernise the look and progression of the store
and growing our brand. feel of the redevelopment
The historical stores and to meet more programme.
underinvestment in the routine maintenance that
store estate in previous has been deferred for many
years has meant that some years.
of The development and launch
our stores lack the level of a new sub brand line up,
of presentation that we under the master brand
require to grow the 'Moss Bros',
business and the brand. in Autumn 2014 has
strengthened the brand
identity.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Costs Supply chain cost price Management mitigates cost The risk is ongoing,
increases and currency price risk by continual however, and is continually
fluctuation could have a review of supplier monitored and addressed.
materially adverse arrangements.
affect on results. In addition, the Group The risk has increased but
A fluctuation in currency operates a treasury policy we continually monitor and
rates could materially which hedges a significant evaluate planned and
affect the Group's cost proportion of proposed expenditure
base and margins. the foreign exchange risk to ensure that it remains
A re-emergence of general from such direct sourcing commercially sensible.
price inflation could arrangements. Management
affect profitability. closely monitor
There are significant the effectiveness of these
external cost pressures arrangements.
from the increases in the If general price inflation
National Living Wage, returns this may allow an
the National Minimum Wage, increase retail selling
the Apprenticeship Levy, prices albeit
the revaluation of business subject to market
rates, higher conditions
energy taxes and increased Ongoing review of store
purchasing costs due to the profitability, combined
combined effects of a with shorter lease
devalued pound. durations.
Remuneration policies are
under review to ensure we
remain competitive in the
marketplace.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Supply chain A disruption to supplier We are continually The risk is ongoing,
continuity may adversely reviewing and refreshing however, and is continually
affect our operation. our supplier list. The monitored and addressed.
Suppliers going out of diversification of product
business could have a buying across a range of
significant impact on our suppliers limits the
ability to meet demand Group's over reliance upon
in store and online. any individual supplier.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Supplier dependency - In an uncertain economic Monitor supplier financial Risk likely to increase
Failure of major suppler environment, supplier performance through with greater uncertainty in
failure and subsequent constant dialogue to reveal macroeconomic environment.
failure to supply product evidence of supplier
or services will impact in difficulty.
business performance. Review ability to source
product/services from
alternative supplier at
pace.
Review and document
contingency plans should
supplier fail.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Distribution centre (DC) Operating our distribution We continually review and With new and increased
centre from one location monitor our disaster operating pressures on the
leaves the Group exposed to recovery plan to ensure DC through multi-channel,
business catastrophes that all business risks the reliance and
occurring at that location. are adequately covered. consequent exposure to risk
Any business catastrophe Our financial risk of of the DC failing has
affecting our distribution operating from one location increased during the year.
centre could severely is mitigated through our
affect the Group's comprehensive insurance
ability to supply to stores cover.
and customers.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Cyber crime A cyber crime attack could Customer bank or payment Frequency and severity of
disable the Group's key IT card details are not cyber crime attacks against
systems and compromise data processed or stored in the companies have increased
security. Group's IT systems. significantly
Comprehensive security
measures are in place with
regular tests carried out.
Development in cyber crime
and preventative strategies
are constantly reviewed.
---------------------------- ---------------------------- ---------------------------- ----------------------------
People The Group's reliance on key Effective recruitment The risk is ongoing however
management and other policies and people is continually monitored
personnel could put development means the Group and addressed.
pressure on the business can take full advantage
if they were to leave. of the recovery in its
Attracting and retaining performance. Long-term
high calibre people is a incentive share awards were
key priority and a central granted to senior
focus in striving employees during the year
for excellent customer to more closely align their
service across the Group's interests to those of the
business channels. Group and
a SAYE scheme is in
operation.
---------------------------- ---------------------------- ---------------------------- ----------------------------
RELATED PARTY TRANSACTIONS
The Group had no material related party transactions which might
reasonably be expected to influence decisions made by users of
these Financial Statements. Directors' remuneration is disclosed in
the Annual Report on Remuneration on pages 41 to 52. Other related
parties are key management (employees below Director level who have
authority and responsibility for planning, directing and
controlling the Company) and major Shareholders. The key management
personnel compensation is as follows:
2016/17 2015/16
GBP'000 GBP'000
--------------------------------------------- -------- --------
Short-term employee benefits 1,389 1,139
Termination payments 66 46
Contributions to defined contribution plans 79 65
Proceeds from share-based payments 240 535
--------------------------------------------- -------- --------
1,774 1,785
--------------------------------------------- -------- --------
Total remuneration is included in administrative expenses and
relates to 11 employees in the period ended 28 January 2017
(2015/16: 10).
TRADING TRANSACTIONS
The Group entered into the following transactions with related
parties who are not members of the Group:
Berkeley Burke Trustee Company Limited is considered a related
party of the Group because Brian Brick, Chief Executive Officer of
Moss Bros Group plc is a beneficiary of the pension fund. On 8
December 2011, Moss Bros Group plc agreed a long-term lease with
Berkeley Burke Trustee Company Limited, a pension fund and the
superior landlord, for a store in Hounslow, on an arm's length
basis.
AAK Limited is considered a related party of the Group because
Maurice Helfgott, Senior Independent Non- Executive Director of
Moss Bros Group plc, has a close relative holding a key management
position with significant influence and who is a significant
shareholder at AAK Limited. All transactions with AAK Limited have
been on an arm's length basis. At 28 January 2017, total purchase
from AAK Limited was GBP4.3m, including VAT, (30 January 2016:
GBP4.1m, including VAT), of which GBP177,000 was outstanding at
year end.
Moss Bros agreed a sublet of a store lease to White Stuff Ltd.
Debbie Hewitt, Chairman of Moss Bros Group plc, is also Chairman
and director of White Stuff. The transaction was on arm's length
commercial terms and Debbie Hewitt took no part in determining the
commercial terms offered by Moss Bros or in the decision to accept
them taken by White Stuff. The sublet is from June 2014 until
December 2021 at a rent of GBP50,000 per year. A capital
contribution of GBP50,000 was paid to White Stuff on completion of
the agreement. At 28 January 2017 the balance due from White Stuff
was GBP212 in respect of service charges payable in arrears.
For further information please contact:
Moss Bros Group Plc
Tony Bennett, Finance Director and Company Secretary 0207 447 7200
This information is provided by RNS
The company news service from the London Stock Exchange
END
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