Hornby PLC Trading Update (1671W)
07 February 2017 - 6:00PM
UK Regulatory
TIDMHRN
RNS Number : 1671W
Hornby PLC
07 February 2017
Hornby plc
("Hornby" or "the Group")
7 February 2017
TURNAROUND PLAN ON TRACK AND ROBUST CURRENT TRADING
Hornby Plc, the international hobby products group, provides an
update to shareholders on progress made in its turnaround plan and
trading for the period from 25 November 2016 to 5 February
2017.
Turnaround plan on track
The Group's turnaround plan is progressing as expected. The
structural changes to the UK business are complete. We are at an
advanced stage in transferring key European operations to the UK
and we expect this to be completed by the end of the financial
year. The rationalisation of the product range and associated
reduction in capital expenditure were delivered in line with our
plans. New catalogues for the 2017 product range have been launched
and were received positively by our customers and consumers. The
closure of the concession channel is proceeding as planned and we
have continued to steadily reduce group stock levels while taking
care not to disrupt core sales through existing channels. At 31
December 2016 stocks were GBP11.2 million (2015: GBP15.5 million)
and net debt was GBP2.7 million (2015: GBP6.4 million).
Current trading robust
As previously announced, revenue is expected 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. Underlying Christmas trading was healthy and we have
enjoyed a solid January sales period. All sales channels have
performed in line with or better than our expectations. In
particular, sales to Independent Retailers were robust with
positive growth of 4% year on year during the period as we
continued to strengthen partnerships with these important
customers.
Margate site sale
On 6 February 2017 the Group exchanged contracts for the sale of
its site at Margate for a consideration of GBP2.25 million, which
will complete on 28 February 2017. The expected profit on sale of
approximately GBP0.9m will be treated as an exceptional item. The
Group will leaseback part of the site for the Hornby Visitors
Centre and retail outlet.
Outlook
As previously announced the current financial year is a period
of transition as we reshape and streamline the business. This will
result in full year revenue reducing significantly year on year and
the Group will be loss-making during this transition year. However,
we remain confident of meeting the Board's expectations.
Steve Cooke, Chief Executive of Hornby commented,
"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."
-ends-
Date: 7 February 2017
For further information, contact:
Hornby Plc 01843 233500
Steve Cooke, Chief
Executive
David Mulligan, Group
Finance Director
www.hornby.com
Capital Access Group 020 3763 3400
Scott Fulton
Jessica Bradford
Numis Securities Limited 020 7260 1000
Oliver Cardigan (Nomad)
Paul Gillam
Tom Ballard
This information is provided by RNS
The company news service from the London Stock Exchange
END
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