Hornby says turnaround is progressing as planned
Toy and model specialist Hornby has reported that its turnaround plan is on track following the completion of structural changes to its UK business.
In a statement, the company said it is at an advanced stage in transferring key European operations to the UK and expects this to be completed by the end of the financial year.
The company has also rationalised its product range and said new catalogues launched for 2017 have been well received by customers. The closure of a concession channel is proceeding as planned.
Hornby said current trading has been “robust” with underlying Christmas trading “healthy”.
As previously announced, the company expects revenue to decline by around 20-25% this financial year due to the rationalisation of the business. Group revenue reduced by 25% year-on-year during the Christmas period and UK revenue was down by 21%, in line with expectations.
On 6 February 2017, Hornby exchanged contracts for the sale of its site at Margate for a consideration of £2.25 million, which will complete on 28 February 2017.
Looking ahead, the company said the transformational nature of the current financial year will result in full year revenue reducing significantly year-on-year and Hornby will be loss-making during the year. However, the company remains confident of meeting its board's expectations.
Steve Cooke, chief executive of Hornby, said: "We are in the midst of a transformational year and our turnaround plan is proceeding as expected. The restructuring of our UK operations is complete and we are well advanced with our initiatives in Europe. Our improved financial position is evidence of the success of the first stage of the turnaround. Hornby is well positioned to continue its transition to profitability and higher cash generation."
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