Hornby On The Up As Turnaround Plan Leads To Narrowed Annual Loss

(Alliance News) - Model train maker Hornby PLC's turnaround is making good progress, it said ...

Alliance News 13 June, 2019 | 10:14AM
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(Alliance News) - Model train maker Hornby PLC's turnaround is making good progress, it said Thursday, helped the company's annual loss to narrow.

Hornby in April had guided for a narrowed loss as well as a fall in revenue, the latter due to a shortage of stock arriving on time. To boost sales, Hornby had been implementing discounting, which has now ended, and margins are improving.

For the 12 months to March 31, Hornby's revenue fell 8.1% to GBP32.8 million, but the pretax loss narrowed 48% to GBP5.3 million. On an underlying basis, the pretax loss shrunk 42% to GBP4.4 million.

"The turnaround at Hornby has begun, and we have built the foundations for our future success. The new products are in the pipeline, and we are now thinking much further ahead. There is a great team at Hornby with a fusion of experience and creativity," said Chief Executive Lyndon Davies.

"It is a team that understands our products, understands our brands and most importantly are proud to be part of this business. The last few years have been difficult for everyone, but the new energy that exists makes it an exciting time to be at Hornby."

The company is fully funded until 2023, and it is "progressively" pushing ahead with new product development, helped by the September licensing deal with Warner Bros.

At the time of interim results in November, Hornby set up a profit share scheme for all employees, and it is now looking to start a long-term incentive plan for executives. Both rely on Hornby returning to a profit.

"Over the last eighteen months we have created the foundations for the future across all parts of our business, we have really got to grips with the business now," said Davies.

"We are firmly focused on the future and there is a passion reverberating around the corridors at our ancestral home in Margate which we returned to earlier this year."

Shares were 2.6% lower on Thursday morning at a price of 32.33 pence each.

By George Collard; georgecollard@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Hornby PLC 33.20 GBX 0.00 -
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