Model railway builder Hornby is taking advantage of an online summer sale
Model railway builder Hornby is taking advantage of an online summer sale
- Internet sales increased by more than a third from April to August compared to the previous year
- The Margate-based group predicts ‘low double-digit’ annual sales growth
- Hornby sells Scalextric car racing sets, Corgi cars and Airfix model aircraft
Huge online demand saw toy manufacturer Hornby bounce back over the summer after a disappointing result last year.
Internet sales rose by more than a third from April to the end of August compared to the same period last year, the Margate-based company told investors on Thursday.
As a result, revenues and margins were stronger and in line with the company’s forecasts for low double-digit revenue growth for fiscal 2024.
Staying on track: Toymaker Hornby revealed online sales increased by more than a third from April to the end of August compared to the same period last year
However, the model railway manufacturer warned that the outcome would depend on performance during the critical Christmas season.
The group’s revenue rose 2.5 percent to £55.1 million for the 12 months ending March 2023, which was dampened by weaker-than-expected demand between October and December against an uncertain economic backdrop.
Although trading improved in the last quarter, rising fixed costs saw Hornby post a £5.9m loss after posting a £1.5m profit last year.
In addition, the company’s debt rose due to excessive inventory build-up, while industrial production grew to its highest level ever.
Although progress had been made in reducing old inventories, Hornby acknowledged that inventory volumes remained high at the end of August due to the planned accumulation of new inventories ahead of the autumn peak period.
Founded in 1901 by Liverpool businessman Frank Hornby, the company includes model train brands Jouef, Lima and Electrotran, but also sells Scalextric car racing sets, Corgi cars and Airfix model aircraft.
Over the past decade, the company has struggled financially as it suffered several years of losses due to declining interest in model collecting, problems with foreign suppliers and tougher competition from rivals.
This led to a turnaround plan launched in 2016 that included a share placement, scaling back its overseas operations and cuts to product ranges and investments.
Phoenix Asset Management acquired a majority stake in Hornby six years ago and appointed a new chairman and CEO to steer its recovery.
Sales only started to see a significant upturn when the strict lockdown restrictions introduced in the wake of the Covid-19 pandemic prompted many families to take up new hobbies.
Hornby shares were flat at 16.5p on Wednesday afternoon, but are down around 42 per cent so far this year.