(Alliance News) - Hornby PLC on Monday said its pretax loss widened in the second half of the year despite the company identifying a change in trajectory.
The Margate, England-based scale model railway manufacturer said sales for the year ended March 31 grew 2.0% to GBP56.2 million from GBP55.1 million last year.
Whilst the company's direct-to-consumer sales increased by 18% over the year, during the fourth quarter sales declined 8% year on year as ongoing hostilities in the Red Sea delayed deliveries.
Hornby shares fell 12% to 33.50 pence each in London on Monday afternoon.
The company said its loss before tax has widened since the half-year point, although this represents an improvement in second half profitability compared with the previous year.
This occurred despite the company facing increased costs from tooling amortisation and higher interest rate charges on borrowings.
Hornby's net debt position has increased to GBP14.3 million at the end of the year from GBP5.5 million, largely as a result of trading loss and capital expenditure.
"Whilst we close the year in a loss-making position and both net debt and inventory are still too high, we have seen a marked change in trajectory since the half year and aim to continue this positive improvement throughout the current financial year," said Hornby.
The company has invested in new sales and marketing teams alongside added research, data, and loyalty capabilities.
It is hoped that these measures will improve revenue and margins throughout the current year by identifying new customers, and opening up new territories and product ranges.
Preliminary results for the year ended March 31 will be announced in June on a date yet to be confirmed.
By Elijah Dale, Alliance News reporter
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Hornby (HRN)