Hornby Regulatory News (HRN)

31 Mar 2008 07:00

Hornby PLC31 March 2008 TRADING UPDATE Hornby Plc ("Hornby" or "the Group"), the international models and collectiblesgroup, has today announced a trading update for the year ended 31 March 2008.The Group is expecting to announce its preliminary results on 6 June 2008. Trading Update The year has seen strong demand for the Group's products. We have continued tomake good progress with our strategy to broaden the scale of our operations andto accelerate the growth of our European subsidiaries. Demand in the second half of the year in the UK and Europe has continued to begood and this has built on the solid foundations set by a strong first half.However, as mentioned in our January Trading Statement we have experienceddelays in new product shipments to our European subsidiaries from our Far Eastmanufacturing partners. The impact of these delays led to a shortfall in salesin Europe compared to our expectations, although sales will still besignificantly ahead of the prior year. The effect of this will be to defer salesof these new products into the financial year ending 31 March 2009. We havetaken steps to ensure that the rate of new product deliveries is improved tomeet demand in the new financial year. In the UK, whilst demand has been abovethe levels of the previous year, we have seen some weakening of consumer offtakein the final weeks of the financial year. As a result of these factors, Groupsales for the year are expected to be around £56 million, 19% ahead of the prioryear. This is a healthy level of growth, but falls short of our previousexpectations. Pre-tax profit has been impacted and is now expected to be between£8.75 million and £9 million, compared to £7.7 million in the previous year.Taking out the effects of currency translation on intercompany loans the figuresare expected to be £8.1 million - £8.35 million compared to £8 million in theprior year. Prospects We enter the new financial year in good shape. The markets offer goodopportunities despite the weakening economic background. As a hobby basedbusiness, we expect demand for our products to remain resilient. During previousperiods of weakness in the economy sales of hobby related products have remainedrobust. We have a strong pipeline of new products and we are expecting that thelaunch in the Autumn of the new James Bond film, Quantum of Solace, will be wellreceived and that sales of our related slot-car products will be strong. We alsoenvisage continued strong growth in demand for our Airfix product ranges and inour main European markets as we continue to rebuild sales of the brands we haveacquired over the past four years. Chairman, Neil Johnson commented: "We are pleased with the overall health of our business in this increasinglydifficult economic environment. We are confident that our strategy of building abroadly based hobby business will continue to enhance shareholder value. Whilstwe expect the economic environment to remain challenging, we are confident thatwe enter the new financial year with the right platform to continue growing thescale and profitability of the Group." -ends - Date: 31 March 2008For further information contact: Hornby Plc City ProfileNeil Johnson, Chairman Simon CourtenayFrank Martin, Chief Executive William AttwellAndrew Morris, Group Finance Director 020-7448-324401843-233500Web: www.hornby.com This information is provided by RNS The company news service from the London Stock Exchange