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 the period from 1 October 2024 to 31 December 2024.

Business Performance 

Group sales for the third quarter to 31 December 2024 were 7% ahead of the same period last year on a continuing operations basis (excluding LCD Enterprises Limited which was sold on 30 November 2024). For context and comparison, the British Retail Consortium reported UK non-food sales decreased by 1.5% versus previous year for the three months to 31 December.

Group sales for the financial year to date are 8% ahead of last year, and gross profits are ahead by 10%.

A strong programme of activity around Black Friday and Christmas contributed to 23% revenue growth and 38% gross profit growth versus last year for the month of December. Almost 50% of all Black Friday transactions came from first time customers, up from 42% in 2023, demonstrating improved 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 CRM strategy that drives further purchases over time. 

Our direct-to-consumer sales continue to increase steadily and are 10% ahead versus the same period last year.

Our margins for the quarter were 48%, up from 44% in the same period in 2023, reflecting both the increase in direct-to-consumer activities and the additional full-price sales.

Financial Position

Net debt marginally reduced in the quarter and was at £18.2 million by the end of December, compared to net debt £18.8 million at the end of September 2024.

Inventory at £16.6 million, is almost 23% down from £21.5 million at the end of March 2024 as a consequence of our ongoing focus on reducing aged stock, in tandem with driving sales of newer product and the sale of LCD Enterprises Limited in November 2024.

Outlook

Our current forecast to year end March 2025 remains on track for year-on-year growth, and we continue to work on many of the turnaround initiatives outlined in the Annual Report and our Interim Results.

Olly Raeburn, CEO, commented:

"In a tough economic climate, we are pleased to be able to report growth in revenue, margins and gross profits through this critical quarter. Concurrently we are continuing to drive down the inventory levels that had built up in recent years and are delivering our change plans in a steady and sustainable way. Our turnaround is very much on track as we further reduce central costs, focus on our core brands and improve operational processes across the business."

Hornby will announce its preliminary results for the year ended 31 March 2025 in June.