Hornby falls short despite stronger fourth quarter

25th Apr 2023 08:24

(Sharecast News) - Models and collectibles company Hornby said in a trading update on Tuesday that despite a weaker third quarter sales performance, its fourth quarter was more encouraging and ahead of the same period last year.

The AIM-traded firm said the strong end to the year did not, however, fully recover the shortfall in performance in the third quarter.

While its sales and gross margins for the financial year ended 31 March were ahead of the prior year, they remained behind internal budgets for the 2023 financial period.

The group said its direct-to-consumer sales increased strongly at 49% year-on-year, with its overall performance on a positive growth trajectory as in recent years.

Hornby said it expected to report a "modest" underlying loss before tax, due to increased overheads in an inflationary environment and lower-than-anticipated sales versus budgets.

Its board noted that Olly Raeburn started as chief executive officer during the period, on 23 January, while Lyndon Davies became non-executive chairman.

The group's net debt as at 31 March totalled £5.8m, swinging from net cash of £3.9m at the end of March 2022.

Hornby put the increase in debt down to increased inventories at the end of the year, alongside the shortfall in sales.

"We remain cautious in our outlook due to a level of uncertainty around the impact of several factors on our sales such as inflation, mortgage increases and the rising cost of living for all consumers," the Hornby board said in its statement.

Hornby said it would announce its preliminary results for the year ended 31 March in June.

Reporting by Josh White for Sharecast.com.