(Alliance News) - Hornby PLC on Thursday said its losses widened in the first half of its financial year, following high costs and increased overheads.
Margate, England-based Hornby makes and sell model railways.
Hornby's pretax loss widened to GBP2.9 million in the six months ended September 30, down from a loss of GBP745,000 the year before.
Hornby said this is due to the high costs of containers, overheads rising 21% to GBP10.3 million due to the inclusion of overheads in its LCD Enterprises Ltd subsidiary, and a non-cash share-based payment of GBP500,000.
Revenue increased 3% to GBP22.4 million in the half year, from GBP21.8 million. Third party revenue for Hornby's UK business increased by 7% due to the increased speed of shipping goods out of China and into the UK.
However, revenue in the International division declined by 8% following capacity constraints by Hornby's manufacturing partners.
Hornby said it raised stocks in the period to support sales and to avoid shortages, following supply chain disruption experienced in the second half of financial 2022.
"We are still suffering with late departure dates, however, as the shipping industry trims capacity by cancelling sailings. Despite this, although costs are not back to pre-Covid levels, container rates continue to fall," Chief Executive Lyndon Davies said.
"We have also mitigated potential supply disruptions this Christmas by bringing forward the shipping dates on key product lines, which are already available in our warehouse."
Looking ahead, Hornby said it is difficult to predict the outcome for its full year results, but that its order book is higher than it was a year ago.
No interim dividend was declared for the interim period, unchanged from a year ago.
Hornby shares were down 2.3% to 27.85 pence on Thursday afternoon in London.
By Jaskeet Briah; jaskeetbriah@alliancenews.com
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Hornby (HRN)