The chief executive of Hornby has said turnaround efforts are ‘on track’ after the model train maker’s sales outperformed High Street peers over the crucial Christmas trading period.
Olly Raeburn told shareholders on Wednesday that Hornby had defied ‘a tough economic climate’ with solid growth in revenue, margins and gross profits during the ‘critical’ third quarter of its financial year.
Margate-based Hornby has been slashing costs and selling loss-making operations as part of efforts to return to profitability.
It has built up a significant debt pile as sales have struggled, costs have grown and trade has been disrupted by shipping attacks in the Red Sea.
But Hornby, which is backed by Frasers Group and counts Mike Ashley as a consultant, said group sales for the three months to 31 December were 7 per cent ahead of the same period last year on a continuing operations basis.
This compares to a 1.5 per cent year-on-year fall in total UK non-food sales over the period, according to the British Retail Consortium.
Almost half of Hornby’s Black Friday sales came from first time customers
Hornby said Black Friday and Christmas contributed to 23 per cent revenue growth and 38 per cent gross profit growth versus last year for the month of December.
Almost 50 per cent cent of all Black Friday transactions came from first time customers, up from 42 per cent in 2023.
Group sales for the financial year to date are 8 per cent ahead of last year, and gross profits are ahead by 10 per cent, Hornby added.
Margins for the quarter were 48 per cent, up from 44 per cent in 2024, ‘reflecting both the increase in direct-to-consumer activities and the additional full-price sales’.
Hornby’s net debt fell from £18.8million in September to £18.2million at the end of the year, while the group said it had made a 23 per cent reduction in inventories since the end of March to £16.6million.
Hornby shares were up 7 per cent at the open to 27.29p, already bringing gains to more than 20 per cent since the start of the year.
The shares have been volatile. They have added 80 per cent over the last 12 months but are still 25 per cent below a March 2024 peak of 38.5p.
Hornby shares remain roughly 60 per cent below a Covid-era peak of 69.5p in January 2021.
Raeburn said: ‘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.’
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