Final Results

MOSS BROS GROUP PLC

Preliminary results for the 52 weeks ended 28 January 2012

Moss Bros Group PLC ("the Group"), the UK's No 1 Branded Suit Specialist, is today announcing its Preliminary Results, covering the period from 30 January 2011 to 28 January 2012.

The Group's trading performance continues positively, in line with the Board's expectations. Although mindful of the fragile economy, the business is on course to deliver further growth.

HEADLINES

Financial

·; Return to profitability - earlier than anticipated

·; Group like for like** sales, including VAT, up 12.5% (2010/11: 10.7%)

- Like for like** retail sales up 13.1%

- Like for like** hire sales up 10.1%

·; Continuing operations pre-tax profit ahead of expectations at £0.9m (2010/11: loss of £8.9m and loss before exceptionals of £5.8m)

·; Continuing operations EBITDA* of £5.8m (2010/11: loss of £0.6m), driven by improved sales and reduced costs

·; Gross margin from continuing operations up 100 basis points to 59.7%, compared with last year

·; Total net inventory at £14.1m (2010/11: £12.1m on a comparable basis, excluding Hugo Boss and Cecil Gee), increased in line with sales

·; Strong cash balance of £23.3m (2010/11: £6.9m), reflecting the receipt of proceeds relating to the successful disposal of non-core activities being 15 Hugo Boss franchised stores and 8 Cecil Gee stores

·; Return to payment of dividend for the first time since 2007 with proposed dividend of 0.4 pence per share

Operational

·; Record sales for Moss Bros Hire in the period, benefited from the new Hire distribution system that was fully implemented last year, and continued investment in inventory

·; Successful disposal of the non-core Hugo Boss and Cecil Gee businesses, creating a simpler operating model, with management focus on the core Moss brand

·; 10 new Moss stores and 1 new Outlet store were opened, including 4 new pilot store layouts in Canary Wharf, Bluewater, Liffey Valley and Meadowhall, incorporating 4 Bespoke 'store in store' concepts

·; E-commerce strategy continued to develop, with 'click & collect' and 'click and return' becoming available in stores in the second half of 2012/13

Current trading

·; Trading in the 8 weeks to 25 March 2012 has continued to be encouraging. Like for like** sales continue to improve in line with management expections, although the gross margin has been affected by rising raw material prices. Like for like** cash gross profit in the 8 weeks to 25 March 2012 is 3.6% ahead of last year.

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

"In spite of tough trading conditions, we continue to make great progress in turning the business around. We have continued with our work on the new store fits, to improve the customer perception of the brand and to improve financial returns. During 2012/13 we will continue to carry out test refits on selected stores, to assess the impact on sales.

We are also progressing our plans for an integrated e-commerce offering and exploring ways of leveraging our customer data, whilst at the same time applying careful management of our costs, to ensure we have resilience if there is another downturn in consumer spending. 

Like for like** sales continue to improve year on year, so although we face increasingly tough comparatives, we remain confident in our strategy and ability to drive profitable growth. Further opportunities for growth are well supported by our strong balance sheet, and this gives me confidence that we will maximise the potential of the Moss brand and create substantial shareholder value in the process.

As a reflection of the Board's growing confidence in the business and an earlier than expected return to profitability, I am delighted to report that the Board will be recommending to its shareholders a return to paying a dividend, our first dividend payment since 2007."

*EBITDA is earnings before interest, taxation, depreciation, amortisation, exceptional items and discontinued operations.

**Like for like represents financial information for stores open throughout the current and prior financial periods and compares 52 weeks against 52 weeks.

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/Nicola Cronk/Gabriella Clinkard

CHAIRMAN STATEMENT

I am pleased to report that the business has returned to profit a year ahead of expectations, which is all the more significant given the tough trading environment for UK retailers.

Total like for like** sales including VAT reflected a 12.5% increase on the prior year and profit before taxation and discontinued operations was £0.9m (including a net £0.4m credit in respect of provisions for onerous property lease contracts), compared with a loss before exceptional items of £5.8m in the previous year. Profit before taxation and discontinued operations was £0.9m against £8.9m loss after exceptional items in the prior year. EBITDA (underlying earnings before interest, taxation, depreciation, amortisation, exceptional items and discontinued operations) continued on a positive trend to £5.8m, compared with £0.6m loss in the previous year.

In spite of the challenging external environment, the Executive team has continued to make good progress on the turnaround of the business, laying the foundations to leverage the value of the Moss brand and our position as 'the No.1 Branded Suit Specialist'. The decision to dispose of our Hugo Boss Franchises and Cecil Gee business has enabled us to focus our people and financial resources on the development of the core Moss business. Furthermore, investment and innovation in new products like Moss Bespoke have brought momentum to the rehabilitation of the Moss brand, creating interest and footfall from a new segment of customers.

In parallel with these actions, the team continues to show diligent cash and working capital control and the business is now debt free, with a strong cash balance.

During the last 12 months, we progressed the restructuring of the Board with the welcome appointment of Bryan Portman as a Non-Executive Director and Chairman of the Audit Committee. Bryan brings a wealth of financial and consumer experience to the Board.

Throughout the year, our people have again continued to show a combination of hard work, passion and commitment and on behalf of the Board I would like to thank them for their contribution.

Our return to profitability and confidence in our future trading position has encouraged the Board to re-introduce the payment of a dividend, for the first time since 2007. We are proposing the payment of a dividend of 0.4 pence per share to be paid on 16 August 2012 to all shareholders on the register on the 13 July 2012 (ex dividend date 11 July 2012). It is our intention to apply a progressive dividend policy as the turnaround progresses and we will seek to balance this against the investment needs of the business and the wider trading environment.

In summary, there is no doubt that the Executive team has completed the first phase of the transformation of the business.

Our continued progress is reflected in the pleasing start to this financial year and whilst economic conditions in the UK are expected to remain challenging, we are well placed to continue the turnaround of the business by leveraging the potential of the Moss brand and our clear position as 'the No.1 Branded Suit Specialist'.

**Like for like represents financial information for stores open throughout the current and prior financial periods and compares 52 weeks against 52 weeks.

DEBBIE HEWITT

CHAIRMAN

29 MARCH 2012

CHIEF EXECUTIVE BUSINESS REVIEW

OVERVIEW

Moss Bros Group PLC ("the Group") retails and hires formal wear for men, predominantly in the UK. The Group operates under the Moss, Moss Bros and Bespoke fascias, through its mainstream stores. The Group also trades through the premium Savoy Taylors Guild fascia, where there is a historical link in areas such as the Strand in London.

The Group has continued to make good progress in its turnaround this year, despite continued turbulent trading conditions. A focus on product, operational delivery and cost control have combined to return the business to profitability.

KEY PERFORMANCE INDICATORS

Management monitors progress by reference to a number of key performance indicators ("KPIs"). These KPIs are applied on a Group-wide basis across all stores and include the following:

·; sales, which are further analysed by:

- average transaction value (ATV)

- units per transaction (UPT)

- average selling price (ASP)

·; gross profit margins

·; inventory turn

·; return on capital

These KPIs are assessed against forecasts and the prior year.

RESULTS and KEY ACTIVITIES

In the 52 weeks ended 28 January 2012, total like for like** sales increased by 12.5% (2010/11: 10.7%) and gross margin improved to 59.7%, an increase of 100 basis points. The profit before taxation and before exceptional items on continuing operations was £0.9m (including a net £0.4m credit in respect of provisions for onerous property lease contracts), compared with a loss of £5.8m in the previous year. EBITDA before exceptional items on continuing operations improved to £5.8m (2010/11: loss £0.6m).

As at 28 January 2012, the Group had cash balances of £23.3m (2010/11: £6.9m).

The most significant progress has been made on the strategic agenda of leveraging the Moss brand. The completion of the sale of the Hugo Boss franchise and the sale of the Cecil Gee stores were both critical developments, which have released resources to enable future investment in the core estate, as well as eliminating any liability for potentially onerous leases.

We enter the new financial year with our strongest cash balance for many years and well positioned to invest in areas of the business that will best sustain and enhance the momentum of our recovery to profit. The strong balance sheet gives us the flexibility to develop key areas of the business such as store refits and e-commerce, which to date have not yet benefited from any significant investment.

REVIEW OF OPERATIONS

MAINSTREAM RETAIL

There are 102 Moss and Savoy Taylors Guild branded stores (2010/11: 97) and 34 outlet stores (2010/11: 33) as at 28 January 2012, which trade the Moss own brands of Ventuno, De Havilland, Blazer and Savoy Taylors Guild. These stores also stock selected third party guest brands including Hugo Boss, Canali, Ted Baker and French Connection. The vast majority of the stores also have a Moss Bros Hire 'store within a store' operation within them.

We have continued to implement detailed operational reviews of all stores, continuing our programme of streamlining the product range, defining store profiles and reflecting these in stock control initiatives. These actions impacted positively on the like for like** sales for Mainstream Retail, which were up by 12.3% on 2010/11. The margin performance was affected by increased raw material pricing, which was to some extent offset by consolidation into fewer suppliers.

The number of loss making stores significantly reduced during the year and we have taken a further provision against three stores which are likely to remain loss making for the remainder of their lease terms. 45% of our property leases expire within the next 36 months and there will be opportunities to improve terms of renewal in many cases. We will continue to review the viability of sites, and subject to concluding negotiations successfully with landlords, we do not anticipate any significant level of closures in the coming year. Unlike many high street retailers who are looking to reduce their store footprint, the underpin 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 stores footprint on a cost effective basis.

We opened 10 new Moss stores and 1 new Outlet store in the year, and closed 5 stores, and although we only plan to open one additional store in the next 12 months, we will take advantage of any opportunities that become available. It can be viable for us to make healthy returns on sites where other Men's formalwear competitors might struggle, due to the scale and operational efficiencies achieved from the hire fascia.

In parallel with operational improvements, we have continued to research the perception of the Moss brand, its positioning with current and potential customers and the overall perceived value of the offering. It is clear that the brand continues to have tremendous heritage value and that we are building our following with younger and more affluent customers, who are looking for stylish product and value for money. The Moss Bespoke offer has attracted a new cohort of customers who may not have considered Moss previously and the concept of Moss for Hire, Buy or Bespoke underpins our market position as 'the UK's No.1 branded suit specialist'. Our sales promotion activities reflect this stance, with the use of visual merchandising simplifying the process of buying a suit and encouraging the purchase of directly related accessories such as shirts, ties and shoes.

The Moss Bespoke concept is a good example of leveraging our core capability in suits into a new and growing segment of high quality, affordable, bespoke suits for a more mass market. The pilot has successfully demonstrated that this and similar offerings are important to the rehabilitation and development of the Moss brand. Not only does it add 'theatre' to the Moss offering, it also enhances our reputation for quality and value for money and provides an opportunity to improve the footfall and sales densities in our larger stores. The flagship Moss Bespoke store in Blomfield Street, London, is in an ideal position in the City to showcase and pilot the development of this and other suit offerings. We have successfully opened another four 'store within store' Moss Bespoke outlets in other core Moss Retail Stores during 2011/12, standing alongside our retail and hire offering, and plan further openings in 2012/13.

As well as improving the brand positioning and product offering, the team is well underway with the implementation of the project to modernise the look and feel of the core Moss stores and four 'new look' stores were opened in Canary Wharf, Liffey Valley, Meadowhall and Bluewater during 2011. These pilots have helped inform how the look and fit of the store layout should be adapted to meet the various store profiles which exist across the Group. The wider implementation programme is being prioritised and phased to test the level of payback. Because of the extent of the under investment of some of the core estate, some of which has not had basic maintenance and improvements for a number of years, we will carefully balance the new refit with a care and maintenance programme to bring all of the estate up to at least a basic minimum level of presentation.

HIRE

Moss Bros Hire is the market leader in the UK hire market and the number one recognised name for hire. We have 131 Moss Bros Hire outlets (2010/11: 125) as at 28 January 2012; all contained within core Moss Retail and Savoy Taylors Guild Stores.

Market share increased in 2011/12, in spite of the fact that the hire market in general continued to contract due to the drop in the corporate hire market for both black tie and morning suit events. The considerable strength of our nationwide offering and the quality of our service has delivered a like for like** sales increase of 10.1% (2010/11: 10.9%). This has been driven in part by our new Hire supply chain infrastructure, which is successfully embedded into the business, resulting in improvements in the accuracy and speed of allocation and the distribution of orders.

Looking forward, there are further opportunities to grow our market share through the consideration of new opportunities such as the School Prom hire market, and new distribution channels including the introduction of a new interactive internet site, with the ultimate aim of order and re-order on-line.

Moss Bros Hire also offers one of the most significant opportunities to develop our retail offering by leveraging the rich source of customer data that comes from our customers, many of whom are currently unaware of, or do not consider the Moss Retail offer.

FASHION

The sale of our Cecil Gee branded stores in June 2011 concluded our strategic goal of focusing on the core Moss brand.

We no longer operate a separate fashion division and guest brands such as Hugo Boss which did make up a large part of this division, now form part of the main stream offering, in stores where the profile reflects a demand for this type of product.

Along with the Hugo Boss transaction, the sale of the Cecil Gee stores released people and financial resources to focus on the development of the core Moss business.

E-COMMERCE

Moss.co.uk progressed well in the year, with sales sharply up on the previous year, albeit still from a low base. There is significant opportunity to grow this channel and we will focus our effort in the future on improving the functionality of the site and in developing a truly multi-channel business.

We are in the process of recruiting an e-commerce Director to lead this activity.

In the longer term, the more significant opportunity is the introduction of a comprehensive and fully integrated CRM programme, encompassing our "Hire, Buy and Bespoke" offering.

COSTS

Costs remain tightly controlled and with the recovery in sales established, the focus has shifted to process efficiencies, allowing us to further simplify the business.

SUPPLY CHAIN

The buying team continually assesses supplier performance, to ensure the most commercially beneficial results for the Group. Over the last few years, we have shifted the emphasis of our product supply from mainland Europe into China and achieved a better buying margin as a result, whilst also improving the quality of our products. The timely ordering of inventory has allowed much greater scope for tactical promotions.

We are exploring opportunities, where appropriate, for direct sourcing and are trialling direct from factory imports during 2012/13.

DISTRIBUTION CENTRE

The efficiency of the Group's distribution centre has been improved through the subletting of excess space to a third party operator, reducing costs accordingly.

PEOPLE

The need for talented and committed people across all areas of the Group requires a continuing focus on effective recruitment, induction, performance management and training.

The recruitment of a new e-commerce Director in 2012 will add to the Executive talent pool of the Company. In addition, the Board has been further strengthened by the appointment of Bryan Portman as an Independent Non-Executive Director and Chairman of the Audit Committee, which means we are now fully compliant with the Corporate Governance requirement for independent Non-Executive Directors.

PRINCIPAL RISKS AND UNCERTAINTIES

CASH AND FUNDING

Cash balances are managed and monitored on a daily basis and the peaks and troughs in the cash cycle are well known. We continue to operate the business from a debt free position and current trading levels generate a healthy cash flow which has been offset by investments in the stores. Nevertheless, the significant underinvestment in the store estate over the last few years does mean that we will need to incur capital expenditure, both to modernise the look and feel of the stores and to meet more routine maintenance that has been deferred for many years. The returns from this activity will be very closely monitored.

INVENTORY AND CONTINUITY OF SUPPLY

Demand forecasting and stock ordering and intake are aligned to maximise sales and to minimise capital investment. The placing of all orders is subject to product demand forecasting models and reflects ongoing rates of sale of all product lines.

The consolidation of product buying into fewer suppliers creates sufficient scale to mitigate the risk of the suppliers going out of business in the short to medium term. Negotiations take place regularly with key suppliers regarding rate and payment terms. We are also exploring opportunities for direct supply, where appropriate.

The ongoing increases in raw material prices could be considered a risk factor for the Group. Management have mitigated this risk as a significant proportion of inventory prices have been agreed with the suppliers for the 2012/13 financial year, though this remains closely under review.

The Hire business demands the highest level of customer service and this is delivered through a highly developed and efficient infrastructure which enables consistent 'delivery to promise'. Any disruption to this infrastructure would affect our ability to maintain customer service levels. Plans are in place to mitigate any issues in this area.

PROPERTY

The business operates from a portfolio of high street, shopping centre and factory outlet stores all held under operating leases. Each store is evaluated annually to assess its ongoing commercial viability. Given the importance of optimising the Group's property portfolio, the Group has increased its in-house management resource in this area in order that opportunities for the development of its store portfolio are maximised. All opportunities are rigorously evaluated both operationally and financially before renewals are signed and/or new lease acquisitions are made.

RECRUITMENT AND RETENTION

Attracting and retaining high calibre people is a key priority and a central focus in striving for excellent customer service across the Group's business channels. People development is to be further improved so that the Group can take full advantage of the recovery in its performance.

It is also our intention to introduce a Save As You Earn Scheme (SAYE) this year, so that all of our people have the opportunity to benefit from continued growth of the business and more reasons to stay and develop their career with the Group.

FINANCIAL REVIEW

*EBITDA is earnings before interest, taxation, depreciation, amortisation, exceptional items and discontinued operations.

***Underlying represents results before exceptional items.

The improvement across the business that started in the second half of 2010/11 gained momentum in 2011/12 with strong like for like** sales growth and continued margin improvement. Gross margins continued to improve despite the increase in VAT rates in January 2011 and 2012 and higher raw material prices.

REVENUE

The operational improvements increased the overall results for the period. The core Moss Retail and Hire businesses including Outlets, performed well with like for like** sales up 13.1% and 10.1% respectively.

GROSS MARGIN

Gross margin has increased 100 basis points, building on increases achieved in 2010/11, despite the increase in VAT from 17.5% to 20%. This was despite considerable promotional pressure from our competitors who sacrificed gross margin to attract sales and was a consequence of closer alignment of the product offer to customer needs.

EXCEPTIONAL ITEMS ON CONTINUING OPERATIONS

There were no exceptional items on continuing operations in the year ended 28 January 2012.

In the prior year, a provision for onerous property lease contracts was made under IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' of £2.0m on continuing operations in respect of certain loss making stores. The provision represents the net present value of projected losses for each store, until the end of lease, as the directors believed there was no realistic prospect of achieving lease surrender for an amount less than that provided. The average unexpired term of these loss making stores was 3.4 years. Following a reassessment of onerous property lease contracts £0.4m additional provision was recognised during the year ended 28 January 2012 and has not been treated as an exceptional item as the increase is not significant.

No impairments have been made to assets during 2011/12 (2010/11: £0.7m on continuing operations charged to exceptional shop selling and marketing costs).

Other exceptional adjustments in the prior year of £0.4m on continuing operations related to reorganisation costs in connection with the review of the cost base of the business. There were no exceptional costs of a similar nature in the current year.

EARNINGS PER SHARE

Basic earnings per share, on continuing and discontinued operations, was 7.27 pence compared to 5.94 pence loss per share last year. Diluted earnings per share, on continuing and discontinued operations, was 6.81 pence compared to 5.94 pence loss per share last year.

Basic earnings per share, on continuing operations, was 1.63 pence compared to 7.45 pence loss per share last year. Diluted earnings per share, on continuing operations, was 1.53 pence compared to 7.45 pence loss per share last year.

DIVIDEND

The business has returned to profit a year earlier than planned, giving the Board confidence that the turnaround is well under way. In spite of a very tough trading environment, the Group's current trading performance remains in line with the Board's expectations and is on course to deliver the anticipated levels of continued growth. The Group's cash reserves have been transformed following the disposal of Hugo Boss and Cecil Gee. The Board therefore feels it is timely to reinstate the payment of a dividend.

A dividend of 0.4 pence per share is proposed to be be paid on 16 August 2012 to all shareholders on the register as at 13 July 2012 (ex dividend date 11 July 2012) and in line with the Board's policy, will be monitored to ensure we achieve robust dividend cover over time.

INVESTMENT

Total capital expenditure in the year was £3.0m (2010/11: £4.9m) and depreciation was £5.1m (2010/11: £6.5m). This included the opening of 11 new stores. The total capital expenditure included further investment in new Moss Bros Hire inventory of £0.8m (2010/11: £0.7m), whilst depreciation on hire inventory was £0.9m (2010/11: £1.3m).

CASH

The year end cash balance was £23.3m compared to £6.9m last year.

INVENTORY

In the past two years, inventory growth had failed to keep pace with the growth in sales. The mix of inventory in the business has been re-geared to ensure sufficient inventory is now available to support sales across the business. This has led to an increase in current season inventory, compared to the prior year (excluding Hugo Boss and Cecil Gee inventory).

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.

OUTLOOK

In spite of tough trading conditions, we continue to make great progress in turning the business around. We have continued with our work on the new store fits, to improve the customer perception of the brand and to improve financial returns. During 2012/13 we will continue to carry out test refits on selected stores, to assess the impact on sales.

We are also progressing our plans for an integrated e-commerce offering and exploring ways of leveraging our customer data, whilst at the same time applying careful management of our costs, to ensure we have resilience if there is another downturn in consumer spending.

Like for like** sales continue to improve year on year, so although we face increasingly tough comparatives, we remain confident in our strategy and ability to drive profitable growth. Further opportunities for growth are well supported by our strong balance sheet, and this gives me confidence that we will maximise the potential of the Moss brand and create substantial shareholder value in the process.

As a reflection of the Board's growing confidence in the business and an earlier than expected return to profitability, I am delighted to report that the Board will be recommending to its shareholders a return to paying a dividend, our first dividend payment since 2007.

**Like for like represents financial information for stores open during the current and prior financial periods and compares 52 weeks against 52 weeks

BRIAN BRICK

CHIEF EXECUTIVE OFFICER

29 MARCH 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 52 WEEKS ENDED 28 JANUARY 2012

* See note 1 for details of re-presentation

** Included in 2011/12 profit after taxation from discontinued operations are exceptional items of £7,529,000 profit before taxation arising from the sale of Hugo Boss and Cecil Gee discontinued operations

***Underlying represents results before exceptional items

There are no other items of comprehensive income in the period other than the profit in the period.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 52 WEEKS ENDED 28 JANUARY 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 28 JANUARY 2012

The financial statements (registered number 134995) were approved by the Board of Directors on29 March 2012 and were signed on its behalf by:

CONSOLIDATED CASH FLOW STATEMENT

F FOR THE 52 WEEKS ENDED 28 JANUARY 2012

1. Basis of preparation

The financial information set out above is based on the Company's financial statements which are prepared in accordance with International Financial Reporting Standards as adopted for use in the EU.

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 28 January 2012 in these consolidated preliminary results are consistent with those adopted by the Group in its consolidated financial statements for the 52 weeks ended29 January 2011.

These consolidated preliminary results have been prepared in accordance with the recognition and measurement criteria of IFRS. They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 28 January 2012.

The financial information set out above does not constitute the Company's statutory accounts for the years ended28 January 2012 or 29 January 2011, but is derived from those accounts. Statutory accounts for 2010/11 have been delivered to the Registrar of Companies and those for 2011/12 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; 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.

The comparative information has been re-presented to reflect the discontinued Hugo Boss and Cecil Gee operations as described in note 7. No opening statement of financial position has been presented for the prior year as it is unchanged from that previously reported.

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, key risks and uncertainties.

The Group meets its day to day working capital requirements through surplus cash balances. The cash generated from the disposal of the Hugo Boss Franchised Business to Hugo Boss UK Limited and Cecil Gee business to JD Sports Limited, details of which are set in the Chief Executive Business Review, will provide sufficient working capital such that the Company will operate debt free.

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. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts for the 52 weeks ended 28 January 2012.

3. Exceptional items

4. Earnings per share

Basic earnings per ordinary share is based on the weighted average of 94,530,752 (2010/11: 94,530,752) ordinary shares in issue during the period and are calculated by reference to the profit attributable to shareholders of £6,873,000 (2010/11: loss of £5,618,000).

Underlying*** earnings per ordinary share is based on the weighted average of 94,530,752 (2010/11: 94,530,752) ordinary shares in issue during the period and are calculated by reference to the profit attributable to shareholders of £1,543,000 (2010/11: loss of £4,904,000).

Diluted earnings per ordinary share is based upon the weighted average of 100,975,161 ordinary shares, which include the effects of share options and shares under the LTIP of 6,444,409, that were anti-dilutive for the period presented and could dilute earnings per share in the future and are calculated by reference to the profit attributable to shareholders as stated above.

In 2010/11 the weighted average of 94,530,752 ordinary shares which excludes the effects of share options and shares held under the LTIP of 7,282,728, that were anti-dilutive for the period presented but could dilute earnings per share in the future and are calculated by reference to the loss attributable to shareholders as stated above. In the prior period the weighted average number of ordinary shares were not diluted, as per IAS 33 'Earnings per Share', as this would decrease the basis loss per share.

*See note 1 for details of re-presentation.***Underlying represents results before exceptional items

5. 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 continuing 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.

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.

6. Taxation

Corporation tax is calculated at blended rate 26.3% (2010/11: 28%) of the profit chargeable to taxation for the year.

***Underlying represents results before exceptional items

7. Discontinued operations

Hugo Boss

Moss Bros Group PLC announced on 7 February 2011 that it had entered into a conditional sale and purchase agreement with Hugo Boss UK Limited, relating to the disposal of the Hugo Boss Franchised Business, for a cash consideration of £18,209,000, fully paid by 28 January 2012. The disposal constituted a Class 1 transaction pursuant to Chapter 10 of the Listing Rules and was subsequently approved on 3 March 2011 by the shareholders of the Company at an Extraordinary General Meeting. The transfer of the business to Hugo Boss UK Limited took place on 31 March 2011.

The proceeds from the disposal will provide the Company with funding to eliminate debt and invest in the core business.

The agreed sale and purchase agreement disposed of the 15 Hugo Boss branded retail stores in the UK, previously operated by the Company under the Franchise Agreement with Hugo Boss AG. Hugo Boss UK Limited acquired the business and assets of the Hugo Boss Franchised Business as a going concern, including all the leases, inventory and property, plant & equipment associated with the 15 Hugo Boss franchised stores. In addition all the employees who previously worked in the Hugo Boss franchised stores and those in the Head Office working directly on Hugo Boss Franchised Business, transferred across. The cash consideration of £16,500,000 was subject to subsequent adjustment upwards to £18,209,000 to reflect the amount of transferred inventory. 

A profit before taxation of £8,246,000 arose on the disposal of the Hugo Boss Franchise Business, being the proceeds of £18,209,000 less the carrying amount of the net assets attributable £9,366,000 and £597,000 associated legal and professional fees and other expenses.

Cecil Gee

Moss Bros Group PLC announced on 20 June 2011, that, in line with its stated strategy of focusing on the core Moss business, it has disposed of 8 Cecil Gee stores to JD Sports Fashion plc, for a cash consideration of £1,614,000 which has now been fully paid. JD Sports Fashion plc acquired the business and assets of the 8 stores as a going concern and completion of the disposal took place on 18 June 2011. The Cecil Gee business comprised 9 menswear retail stores and the remaining store, Glasgow, converted to a new format Moss store.

A loss before taxation of £717,000 arose on the disposal of the Cecil Gee business, being the proceeds of £1,614,000 less the carrying amount of the net assets attributable £2,212,000 and £119,000 associated legal and professional fees and other expenses.

The results of the discontinued operations of the Hugo Boss Franchise Business and Cecil Gee Business, which have been included in the consolidated income statement, were as follows:

*** Underlying represents results before exceptional items

(1) The tax charge £2,175,000 in respect to discontinued operations relates to the gain on Hugo Boss and Cecil Gee disposal