Hornby H1 losses widen as increased costs offset revenue growth

23rd Nov 2023 07:21

(Sharecast News) - Model railways manufacturer Hornby said on Thursday that interim pre-tax losses had widened as increased costs offset improved revenues.

Hornby reported an underlying pre-tax loss of £4.2m for the six months ended 30 September, compared to last year's loss of £1.5m, and a statutory pre-tax loss that expanded from £2.9m in 2022 to £5.1m in 2023.

The London-listed firm noted that the widened loss comes despite it posting a 6% year-on-year increase in group revenues to £23.8m, with costs associated with its "structural, strategic and operational" changes weighing on the bottom line.

Net debt also increased dramatically, ballooning from £4.9m a year ago to £14.6m at the end of the first half.

Chief executive Olly Raeburn said: "In a year of structural, strategic and operational change, we are starting to see critical improvements in many areas of the business. Whilst topline revenue is growing, and remains in line with management guidance for the full year, there is a cost increase associated with what's being implemented.

"We head into the key Christmas trading period with a strong order book, a full calendar of promotional activity, and a strong team in place. Whilst we do not expect the full benefits of this year's initiatives to take effect until the next financial year, I remain excited about the progress being made and look forward to seeing the impact of these changes over the next 12 months."

As of 1020 GMT, Hornby shares were up 5.62% at 16.90p.

Reporting by Iain Gilbert at Sharecast.com