Hornby Regulatory News (HRN)

Hornby Plc ("Hornby" or "the Group")

Trading Update

Hornby Plc, the international models and collectibles Group, is today updating shareholders on trading for its 4th quarter and the year ended 31 March 2024.

Business Performance 

Group sales for the 4th quarter were 8% less than the same period last year due to Easter falling earlier, Red Sea delivery delays and the resultant movement of some high value containers into April instead of March.

Therefore, Group sales for the financial year ended 31 March 2024 were £56.2 million, only marginally ahead of the prior year at 2%. Margins are slightly behind due to higher tooling amortisation than in prior years, although we have seen a modest improvement in margins in the second half of the year.

The Group's direct-to-consumer sales continue to increase strongly, at 18% ahead of last year, and our overall performance continues on the positive growth trajectory of recent years.

Our underlying loss before tax has weakened since the half-year point. Nonetheless, this still represents a slight improvement in H2 profitability compared to the previous year, despite facing higher interest rate charges on borrowings and increased tooling amortisation from prior year's tooling purchases now in production. The result for the year is in line with our expectations.

Financial Position

Net debt as at 31 March 2024 was £14.3 million compared to net debt of £5.5 million at the end of March 2023 mainly due to the trading loss and capital expenditure. This does, however, show a slight improvement from £14.6M at the half year. Stock has reduced by 12%, or £3 million, since the half year, and is slightly lower than March 2023.

Outlook

Whilst we close the year in a loss-making position and both net debt and inventory are still too high, we have seen a marked change in trajectory since the half year and aim to continue this positive improvement throughout the current financial year.

We have invested in new Sales and Marketing teams, along with adding Research, Data and Loyalty capabilities, which we expect to start improving our revenue and margins positively this financial year through the identification of new customers, opening up of new territories and launch of new product ranges.

We do, however, remain cautious in our outlook due to the natural challenges facing a business in turnaround, and the uncertainty of the wider economic and socio-political factors affecting all businesses at this time.

Hornby will announce its preliminary results for the year ended 31 March 2024 in June.

Enquiries:

Hornby PLC

Olly Raeburn, CEO 01843 233 500

Kirstie Gould, CFO

Holly Barnett, PR

Liberum Capital Limited, Nominated Advisor and Broker

Andrew Godber 020 3100 2222

Edward Thomas

Anake Singh

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