Hornby sales falter but troubled toymaker claims to be on track
The company’s full-year performance will be dependent on the critical Christmas trading period.
Sales at Hornby have missed expectations as the troubled toymaker gears up for what could be a difficult annual meeting.
Revenue was hit due to less discounting, an excess of stock and late deliveries in the period from April 1 to August 31, the firm said.
However, Hornby added that its discontinuation of discounting improved profit margins and its “focus on frugality and doing more with less” has resulted in a smaller operating loss compared with last year.
Much has changed at Hornby over the last 12 months. The business is leaner and the improvement to our planning horizons are well advanced Hornby CEO Lyndon Davies
Hornby’s full-year performance will be dependent on the critical Christmas trading period as the firm looks to “rebuild trust” and excess stock starts to clear in retail stockrooms.
Boss Lyndon Davies said: “Much has changed at Hornby over the last 12 months. The business is leaner and the improvement to our planning horizons are well advanced.”
The company has been through a choppy period, having earlier this year reported wider full-year losses that it blamed on poor decisions by former leadership.
The toymaker has drafted in John Stansfield, a Hornby veteran of 31 years, as its new chairman after spending 12 years as its finance chief.
He replaced Mr Davies, who stepped down from the interim chairman position to focus on his role as chief executive.
The results come as Hornby prepares for its AGM later on Wednesday, where investors have been urged to vote against former chief executive Steve Cooke’s bumper pay packet, which included a £156,000 exit fee plus £365,000 salary.
In better news, Hornby shares surged last week after the company announced it had clinched a licensing deal with Warner Bros.
The agreement will see Hornby release a range of model railway, slot car sets and die-cast vehicles featuring Warner Bros and DC franchises including Harry Potter and DC’s Super Heroes.
DC Super Heroes cover a raft of famous characters including Batman, Wonder Woman, Superman and the Green Lantern.
The toys will be developed under the company’s Hornby Railways, Scalextric and Corgi brands.