Hornby Regulatory News (HRN)

Hornby Plc

Interim management statement

At Hornby's Annual General Meeting to be held in Margate today, Roger Canham, Chairman, will make the following interim management statement relating to the period since 31 March 2013:

"I am pleased to update our shareholders at our AGM with progress on trading in the first quarter of our financial year.

Business Performance

Excluding prior year sales of London 2012 products, the sales performance of the Group in the first quarter of the financial year has been in line with the corresponding period last year. Sales of Airfix and Corgi have been particularly encouraging, the former being driven by anniversaries such as the Dambusters and other notable World War dates. We have also made further progress on the management of our manufacturing base for Hornby product and visibility of delivery schedules across our broader supplier base continues to improve.

The recent 'Great Gathering' exhibition at the National Railway Museum of the Mallard and five other sister locomotives provided an ideal opportunity for us to showcase our product and sets of each locomotive involved have sold very quickly. Progress on the launch of our new product ranges for 2013 has been good and the new 'Quick Build' range across both Airfix and Scalextric brands and the re-launch of the Pocher model car range are expected to be on schedule for later this year.

The appointment of administrators by Modelzone, one of our major customers and business partners during June was disappointing but we have been able to manage our exposure to a write off of debtors of around £0.2million. The Modelzone stores are now starting to be closed down but we expect to be able to replace the majority of sales within the rest of our network of independent model shops, national retail chains and our own online platform. Hence, at this stage, we still do not expect the closure of Modelzone to have a material impact on our business.

Financial Position

There has been no significant change to the financial position of the Group as at 30 June 2013 since the publication of the Report and Accounts in respect of the financial year ended 31 March 2013.

The Group has access to secured banking facilities of £14 million in the UK maturing between 2014 and 2015 and a further £3.5million across the Group. Net debt at 30 June 2013 was £5.8 million (30 June 2012 £8.1 million).

Outlook

As we look towards the end of the year, consumer confidence in the pre-Christmas period will be an important factor in determining the overall result for the current financial year. We have a strong new product pipeline and initial indicators of listings and orders are encouraging. On time delivery of our product will also be an influential factor, as our new manufacturers start to deliver a greater percentage of our production and the important Christmas product lines have been given the appropriate priority. Subject to these factors, we are satisfied that our trading outlook is in line with market expectations. Whilst we continue to operate in a challenging sales and manufacturing environment, our strong portfolio of brands continue to provide us with opportunities for growth in profitability."

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Date: 25th July 2013

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