Last checked at 3 Apr 2018 07:00
Hornby PLC
("Hornby" or the "Group")
3rd April 2018
Trading Update
Hornby Plc, the international hobby products Group, provides an update to shareholders on the progress of the new strategy.
4th Quarter Trading
We have continued to implement the strategy to support the long-term value of the brands rather than the use of discounting to drive short term sales.
As reported in the January update, the lack of discounting coupled with late deliveries of product has continued to affect our sales rate. There was an improvement in sales towards the end of the financial year as some of the European product started to arrive, but as expected, the Group sales and profits were lower than last year.
Lending Update
The Board has now refined its strategy to enable the business to return to profitability. The investment needed to support this strategy will require a larger facility than the one currently available to the Group. Hornby is in the final stages of discussions regarding a new financing facility with new lenders and expects to have the facilities in place ahead of the Group's full year results, which are expected to be announced in mid-June 2018.
To support these discussions, the Board has engaged with Barclays and it has been agreed that they will support the Group with a covenant waiver in relation to the Group's EBITDA covenant in respect of the quarter to 31 March 2018, which is required due to the reduced sales volumes.
At the financial year end, the Group had a net cash position of c. £4m.
Interim Chairman and CEO, Lyndon Davies, said:
"As the dust settles on the changes to the strategy and we start to put together the line plans for 2019 and beyond, morale is starting to build in our hardworking staff and some trust is coming back with our retailers and customers; both in the UK and abroad.
Whilst we have managed to make a lot of progress in the first few months, there is still much more to do in terms of reducing costs, streamlining processes and adding routes to market."
More information on the progress of the strategy will be included in the full year results announcement in June.
Enquiries:
Hornby plc 01843 233500
Lyndon Davies, CEO
Liberum 020 3100 2222
Neil Elliot
Neil Patel
Capital Access Group 020 3763 3400
Scott Fulton
Note:
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Lyndon Davies, CEO of the Company (responsible for arranging release of this announcement) on 01843 233 500.