Last checked at 30 Jul 2009 07:00
AGM
INTERIM MANAGEMENT STATEMENT
Speaking today at the Annual General Meeting of Hornby Plc, the international models and collectibles Group, the Chairman Neil Johnson, will provide the following trading update and first interim management statement, relating to the period since 1 April 2009.
Financial position
" I am pleased to report to shareholders that there have been no significant changes in the financial position of the company as at 30 June 2009 since the publication of the Report and Accounts in respect of the financial year ended 31 March 2009.
" We have committed bank facilities of £22 million maturing between 2012 and 2014. Net debt at 30th June 2009 was £12.4 million (31 March 2009 £11.8 million).
Business performance and outlook
" Our businesses in the UK, mainland Europe and the USA have continued to experience good demand for our products. Sales to consumers via our network of concessions and via our retail customers continue to be strong, demonstrating significant year on year growth. In particular, we have continued to build sales of Airfix and Corgi as our new product development efforts in these categories begin to bear fruit. As is the case every year much will depend upon consumer confidence and the robustness of consumer demand in the pre-Christmas period in determining the overall result for the year. However current indications are positive and historically hobby products such as ours have performed relatively well in times of consumer uncertainty.
" In Europe, against a background of many of our competitors experiencing financial difficulties, we are now recognised as a serious participant in all the key markets. In particular, we are seeing encouraging sales growth in Germany, the largest model railway market in Europe. As previously reported, our sales in Europe have been constrained in the past by supply chain issues. I am pleased to report that, following detailed discussions with the new owners of our principal supplier in China, we are now experiencing a significant improvement in deliveries, and we expect this to continue in the important pre-Christmas period. At the same time we have developed additional sources of supply in order to ensure that our future product requirements are met in full.
" Our strategy to build a broadly based hobby business, spanning a number of product categories and geographical markets has provided a better balance to our business in challenging economic times.
" Our strong portfolio of brands has provided us with an outstanding opportunity in the form of the recently announced licence to produce a comprehensive range of products related to the London 2012 Olympic and Paralympic Games. Our Corgi brand will spearhead the product launch programme, with the first collectable die cast vehicles available before Christmas 2009. These will be followed by collectable die cast figurines of the London 2012 mascot and sculptures of the main sports disciplines. Hornby, Scalextric and Airfix products will follow as the momentum builds towards 2012. We see this licence as giving a once in a lifetime opportunity for consumers to build a unique collection of London 2012 memorabilia over the course of the next three years.
" In conclusion, the Group has experienced challenging circumstances over the past year, with supply chain issues and adverse currency effects putting a short-term brake on our financial performance. We believe that the worst effects of these factors are now behind us, although we will continue to experience the negative impact of exchange rates for the rest of the current financial year. Importantly, though, the Group has demonstrated its resilience against a difficult economic background and we now look forward to restoring the momentum in sales and profits that we have achieved in the past."
-ends-
Date: 30 July 2009
For further information contact:
| Hornby Plc | City Profile |
| Frank Martin, Chief Executive | Simon Courtenay |
| Andrew Morris, Finance Director | William Attwell |
| 01843-233500 | 020-7448-3244 |
| Web: www.hornby.com |