Hornby Regulatory News (HRN)



Hornby Plc ("Hornby" or "the Company")

INTERIM MANAGEMENT STATEMENT

Speaking today at the Annual General Meeting of Hornby Plc ("Hornby" or the "Group"), 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 23 April 2012.

Business performance

" The Group's overall business performance for the period under review has been favourable compared to the corresponding period last year. We continue to operate against a challenging economic background. Consumer confidence remains fragile and our retail partners are managing inventories closely. However, our wide brand and product portfolio spans a number of product categories and geographical markets. This gives the group a broad trading base and continues to reduce our reliance on individual product sectors and markets.

" Our businesses in the UK, mainland Europe and the USA have made a satisfactory start to the new financial year. However, the wider retail environment remains weak and we are remaining cautious about the performance for the remainder of the year. Our European businesses are continuing to make positive progress and we have been encouraged by improvements in their market share.

" We have continued to make further progress to broaden the scale of our supply base. This is an ongoing dynamic and we are working closely with our suppliers to align our business requirements with their capabilities. We now have over ten suppliers across our product ranges. One of our still significant China based sources has informed us recently of plans to rationalise its manufacturing facilities. Whilst this may result in some disruption to shipments in the short term, we believe that it will result in more reliable supplies when completed. We will work closely with this supplier to manage this process.

 " The London 2012 Games are about to commence and we have extensive plans in place to maximise our sales of London 2012 products over the coming weeks. The majority of our London 2012 products, such as our Great British Classics die cast vehicles, will continue to have commercial appeal after the Games.

" Regarding the search for my successor, outlined previously in the Annual Report Statement, I am pleased to report that the process is well advanced and is being managed professionally. We have attracted the interest of a number of extremely high-quality potential candidates and hope to advance to a short-list over the summer months. A further update will be included in the interim IMS."

 Financial position

" There have been no significant changes in the financial position of the Group as at 30 June 2012 since the publication of the Report and Accounts in respect of the financial year ended 31 March 2012.

" The Group continues to have access to secured banking facilities of £16.75 million in the UK maturing between 2014 and 2015. Net debt at 30 June 2012 was £8.1 million (30 June 2011 £9.3 million).

Outlook

" As is the case every year, consumer confidence in the pre-Christmas period will be an important factor in determining the overall result for the financial year.

" We have a strong product pipeline, focussing on merchandise at mass market price points. Our broader distribution base, achieved as a result of our London 2012 activity is already enabling us to gain wider distribution than we have achieved previously. We also continue to innovate in new technologies which we expect will further broaden the reach and appeal of our product ranges.

" In conclusion, whilst we continue to operate in a challenging environment, we are confident that the Group continues to have opportunities to grow and we look forward to maximising these in the future.''

-ends-

Date: 26 July 2012

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