Last checked at 29 Jul 2010 11:00
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 1 April 2010.
Business performance
" Our strategy is to build a broadly based hobby business, spanning a number of product categories and geographical markets. We believe this will continue to provide us with a strong platform to leverage our brand strength and build our business.
" Our businesses in the UK, mainland Europe and the USA have continued to experience good demand for our products. Order intake in all our subsidiaries is showing healthy growth. In the UK, we are experiencing strong demand for our Scalextric and Airfix ranges in particular. The new Scalextric Start range that we have launched is proving to be very popular. This basic entry level range of 32nd scale racing sets have lower price points than our standard boxed sets. They have been received warmly by retailers across all the markets where they have been introduced. Also, the Airfix starter sets that we introduced recently are proving to be extremely popular and are helping to introduce a whole new generation of children to modelling. Both these products have helped the Group to extend the reach of its distribution coverage into new accounts.
" In Europe, we are continuing to establish Hornby as a key supplier to all the major markets. Whilst many of our competitors continue to experience financial difficulties we believe these markets still offer significant scope for growth. We are confident that given the continued weakness of our competitors this provides us with an opportunity to continue to take market share across Europe.
" We have formed a strong relationship with the owners of our principal supplier in China and continue to make good progress together in improving the speed and scale of product deliveries.
" Retail sell through of the early releases of our London 2012 Corgi merchandise has been very encouraging, particularly in the London area. There is an exciting pipeline of new products which will be released in phases between now and the start of the Games. We expect this positive sales trend to extend progressively throughout the UK as we move closer to the opening of the Games two years from now.
" Part of our range of collectable merchandise has recently gained distribution in up to 1,200 BP garage forecourts throughout the UK. This is an encouraging example of our ability to extend our distribution reach into new outlets. We expect to be able to continue to broaden the distribution base of our London 2012 merchandise over the next two years. This, in turn, will lay the foundations for increased distribution of our general ranges following the 2012 Games.
Financial position
" I am pleased to report to shareholders that there have been no significant changes in the financial position of the Group as at 30 June 2010 since the publication of the Report and Accounts in respect of the financial year ended 31 March 2010.
" The Group continues to have access to secured banking facilities of £21 million in the UK maturing between 2012 and 2014. Net debt at 30 June 2010 was £4.4 million (30 June 2009 £12.4 million).
Annual General Meeting
" Today we are hosting the company's Annual General Meeting at our headquarters in Margate, Kent. We are delighted to be showing our shareholders the new Hornby Visitors' Centre. This unique tourist attraction showcases all of our major UK brands Hornby, Scalextric, Airfix and Corgi. We have established an impressive collection of current and historical models and layouts all under one roof. We have high hopes for the centre, which we are confident will become a popular tourist attraction in the area. Since we opened the centre, the response has been excellent.
Outlook
" 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 financial year. We have increased the distribution of our products amongst the larger retailers this year. This is likely to have the effect of placing even greater emphasis on sales in the second half of the financial year as these outlets tend to match the timing of receipt of goods into their warehouses more closely with the peak in consumer demand prior to Christmas.
" In conclusion, the Group is trading well. It continues to experience strong demand for its products and looks forward to the future with confidence."
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Date: 29 July 2010
For further information contact:
| Hornby Plc | City Profile |
| Frank Martin, Chief Executive | Simon Courtenay |
| Andrew Morris, Finance Director | 020-7448-3244 |
| 01843-233500 | or 07958-754273 |
| Web: www.hornby.com |
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