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Model trainmaker Hornby says current trading is robust but it still expects to be lossmaking “during this transition year”.
The manufacturer, which also owns Scalextric, Corgi and Airfix toy brands, said trading in the critical Christmas period “performed in line with or better than our expectations”.
In particular, sales to independent retailers are up 4 per cent up year on year.
A trading update for the 10 week period to February 5, it said revenue had reduced 25 per cent year on year, with the UK declining 21 per cent in line with expectations.
The company said it now expected revenues for the full year to the end of March to be around 20-25 per cent lower than the previous year’s outcome of £57m, and it would continue to be lossmaking.
The company has seen a string of senior management changes and has issued a series of profit warnings in the last two years as the manufacturer became loss making following difficulties meeting orders because of problems with its Chinese suppliers.
The current reorganisation involves discontinuing product lines and reducing costly inventories. At the end of December stocks were £11.2 compared with £15.5m last year while net debt was down from £6.4m to £2.7m.
Steve Cooke, who became chief executive last April said the company was in a transformational year but the turnround is proceeding as expected “Hornby is well positioned to continue its transition to profitability and higher cash generation”, he said.