Hornby Regulatory News (HRN)

29 Jan 2007 07:01

Hornby PLC29 January 2007 Hornby Plc ("Hornby" or "the Company") Trading Update Hornby is today issuing its regular update on trading for its second half todate, including the important Christmas and January trade fair period. Trading Update Although the Company experienced lower sales in the UK market during the firsthalf of the financial year, improved consumer demand during the early Autumncontinued to strengthen in the pre-Christmas period and the Company enjoyed astrong sell-through across all its UK distribution channels. Order intake andsales for the final quarter (January-March) are expected to be above the stronglevels experienced last year. The good growth of the European subsidiaries inSpain, Italy, France and Germany has also continued in the second half, andtogether with a first-time contribution from the acquired Airfix/Humbrolbusiness, this performance is expected to continue in the January-March period.The Company therefore expects the underlying trading performance of the businessfor the full year to be broadly in line with market expectations. The Company's statutory reported profits for the current year will be impactedby the effect of the strengthening of Sterling against the Euro during theperiod. At current exchange rates the translation effect of the Company'sEuro-denominated intercompany loans would generate a £0.7m charge to Groupprofits (2006: £0.3m gain) in the current financial year. The charge is anon-cash item. Strategy Update The Company is continuing to make very good progress in rebuilding the brands itacquired in Continental Europe. Hornby is in the process of establishing itselfas a strong contender in all key European markets. This continuing strategy oftargeting stable, collector markets across Europe represents a significantgrowth opportunity and will reduce further the Company's dependence on the UKmarket. The re-launch and future development of the acquired Airfix/Humbrol brands iswell under way. All acquired tooling assets are now under the control of Hornbyand third-party suppliers are now commencing manufacture of the acquired ranges.New product categories to be marketed under the Airfix brand are under activedevelopment. Product update - London Toy Fair The Company's new products launched at the London Toy Fair last week wereextremely well received. 2007 is the 50th anniversary of the introduction of Scalextric. The Company isintroducing a number of limited edition products and promotional activities tocommemorate this important milestone. The Scalextric Digital system has receivedfurther enhancements designed to encourage consumers to trade up to digitalsystems. Scalextric is now becoming recognised as the market leader fordigitally controlled slot-racing in most major world markets. The Hornby Digital Control system for model railways, launched in 2006, is alsoexpected to gain significant momentum during 2007. Early indications of demandand consumer reaction have been excellent and, the system has been furtherdeveloped and extended for 2007. The system will be launched onto the Europeanmarket at the forthcoming Nurnberg Toy Fair. Chairman, Neil Johnson commented: " Christmas sales were encouraging after a period of slow sales in the UK duringthe summer of 2006 and we therefore expect to report a satisfactory tradingresult for the current financial year. " Strategically, we have continued to make very good progress in building aprofitable hobby business across Europe. The acquired businesses have allperformed better than last year as increased volumes have come on stream. Thereis excellent potential to continue this process and to leverage the brandstrengths we have in the key European markets. The acquired Airfix/Humbrolbrands are expected to make a small but positive contribution in the currentfinancial year, with significant opportunity to re-establish this business inall world markets over the coming years." -ends - Date: January 29th 2007For further information contact: Hornby Plc cityPROFILENeil Johnson, Chairman Simon CourtenayFrank Martin, Chief Executive William Attwell01843-233500 020-7448-3244Web: www.hornby.com This information is provided by RNS The company news service from the London Stock Exchange EN