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17 Jan 2024 07:00
Hornby Plc ("Hornby" or "the Group")
Trading Update
Hornby Plc, the international models and collectibles Group, is today updating shareholders on trading for the period from 1 October 2023 to 31 December 2023.
Business Performance
Group sales for the third quarter covering the third quarter to 31 December 2023 were 5% ahead of the same period last year. For context and comparison, the British Retail Consortium reported UK non-food sales decreased by 1.5% on a Total basis over the three months to December.
Cumulative group sales for the financial year to date are ahead of last year by 6%.
A strong programme of activity around Black Friday contributed to 10% revenue growth vs last year for the month of November. More than 50% of all Black Friday transactions came from first time purchasers, demonstrating acquisition of new customers to our brands in this key promotional period. Acquiring new customers in these naturally buoyant trading periods is critical for feeding our new CRM programme that drives further purchases over time and we have already seen positive impact since launch in September.
Our direct to consumer sales continue to increase and are 30% ahead of the same period last year.
Our margins for the quarter were 46%, up from 43.8% at the half year, reflecting the increase in direct to consumer activities and the additional full-price sales driven as a consequence of the uplift in web traffic.
Financial Position
Net debt at the end of December 2023 was £13.5 million compared to net debt £14.6 million at the end of September 2023. The Group retains a strong funding position with significant liquidity headroom available against its existing facilities.
Inventory is £22 million, down from £24 million at the end of September 2023 as a consequence of our ongoing focus on reducing aged stock in tandem with driving sales of newer product.
Outlook
Our current forecast to year end March 2024 remains on track for year on year growth, and we continue to work on responsibly reducing the excessive, historical, inventory position through the remainder of the year.
Olly Raeburn, CEO, commented:
"As outlined in our Interim results to end of September, this is a year of significant strategic, structural and operational change, requiring investment in many areas. We continue to make good progress on our key strategic initiatives and look forward to a return to profitable growth in the next financial year"
Hornby will announce its preliminary results for the year ended 31 March 2024 in June.
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