DIY Investor Magazine
| August 2017
29
The business – around £450m in size – is proving to
be a success: increasing market share, which in turn is
resulting in strong earnings growth and dividend growth.
Currently it’s yielding 6.6%.
SUITED TO ALL OCCASIONS - MOSS BROS
Moss Bros leads the pack in the UK for branded suits.
Its journey since the financial crisis has been one of
improvement and change. Years of under-performance
made way for new management and a shake-up of the
product range, disposals of non-core assets, and store
refurbishments. The changing nature of the competition
also helped – the quality of suits in rivals M&S and Next
has slipped.
All-in-all it is a niche and profitable business with above-
average retail sales growth relative to its marketplace
and a healthy dividend pay-out, which is propped up
by a strong net cash balance sheet in the event of a
downturn.
It’s worth about £100m and currently yields 6.1%.
A MARKET FOR CONVENIENCE – MCCOLLS
Head down to your local shops and you might notice
a McColls convenience store or newsagents. They’re a
growing presence, at around 1400 stores. Convenience
stores are one of the higher growth areas of the food
market with less cost pressures than their supermarket
cousins.
Recently, management have wrapped up a very good
deal for the business – buying 298 stores from Co-op,
enabling them to exert much greater buyer power and
cost savings on the goods purchased for their stores.
The product range has also improved over the past
five years and they’ve been gradually switching the mix
from lower margin tobacco-driven newsagents to higher
margin convenience stores with fresh produce.
The business is valued at around £90m. Its current yield
is 5.1%.
LET’S NOT TAR WITH A BRUSH
The concentration of income in the UK equity
market has led the Lowland Investment Company’s
fund managers to seek out lesser known sources
of dividends to diversify the portfolio’s revenues.
Exemplified in some of its holdings, attractive yields
can be found where many an income manager would
not look – in small and medium sized businesses. This
may give the UK income seeking investor the chance
to depart from the status quo of large-cap driven
dividends.
QUESTIONING THE MANAGER – LAURA FOLL,
LOWLAND INVESTMENT COMPANY
The information should not be construed as investment
advice. Before entering into an investment agreement please
consult a professional investment adviser.
Past performance is not a guide to future performance. The
value of an investment and the income from it can fall as
well as rise and you may not get back the amount originally
invested.
Issued in the UK by Janus Henderson Investors. Janus
Henderson Investors is the name under which Henderson
Global Investors Limited (reg. No. 906355), Henderson
Fund Management Limited (reg. No. 2607112), Henderson
Investment Funds Limited (reg. No. 2678531), Henderson
Investment Management Limited (reg. No. 1795354), Alpha-
gen Capital Limited (reg. No. 962757), Henderson Equity
Partners Limited (reg. no.2606646), Gartmore Investment
Limited (reg. No. 1508030), (each incorporated and
registered in England and Wales with registered office at
201 Bishopsgate, London EC2M 3AE) are authorised and
regulated by the Financial Conduct Authority to provide
investment products and services.
