Model railways maker Hornby buoyed by online summer sales
- Internet sales from April to August jumped by over a third on the prior year
- The Margate-based group predicts ‘low double-digit’ annual sales growth
- Hornby sells Scalextric car racing sets, Corgi cars and Airfix model planes
Bumper online demand helped toymaker Hornby rebound over the summer following a disappointing result last year.
Internet sales from April to the end of August jumped by more than a third on the equivalent period last year, the Margate-based company told investors on Wednesday.
Consequently, revenues and margins were stronger and commensurate with the firm’s predictions for a ‘low double-digit’ expansion in turnover for the 2024 financial year.
Staying on track: Toymaker Hornby revealed online sales from April to the end of August jumped by more than a third on the equivalent period last year
However, the model railways manufacturer cautioned the result would depend on its performance during the critical Christmas trading season.
The group’s sales rose by 2.5 per cent to £55.1million for the 12 months ending March 2023, which was dampened by softer-than-forecast demand between October and December amid an uncertain economic backdrop.
Although trade improved in the final quarter, rising fixed costs meant Hornby swung to a £5.9million loss, having recorded a £1.5million profit the prior year.
In addition, the company’s debts climbed following an excessive stock build-up as manufacturing output grew to its highest-ever levels.
Even though progress had been made in curtailing old stock, Hornby acknowledged that inventory volumes remained high in late August due to the planned accumulation of new supplies ahead of the peak Autumn sales period.
Founded in 1901 by Liverpudlian businessman Frank Hornby, the company’s model train brands include Jouef, Lima and Electrotran, but it also sells Scalextric car racing sets, Corgi cars and Airfix model planes.
During the previous decade, the firm financially struggled as it endured several years of losses caused by declining interest in model collecting, issues with foreign suppliers and tougher competition from rivals.
This led to a turnaround plan launched in 2016, which included a share placing, a scaling back of overseas operations, and cuts to product ranges and investments.
Phoenix Asset Management acquired a majority stake in Hornby six years ago and appointed a new chairman and chief executive to steer the recovery.
Sales only began a significant revival when tough lockdown restrictions introduced in the wake of the Covid-19 pandemic led many families to take up new hobbies.
Hornby shares were flat at 16.5p on early Wednesday afternoon but have slumped by around 42 per cent so far this year.
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