Embattled model train company Hornby has warned full-year revenues will drop nearly 25 per cent as it charges on with turnaround plans to scale back its business.
The group – brands include Scalextric, Airfix and Corgi – said it had already halved the number of concession sites to date, with the rest set to shut in the new year as part of an efficiency drive to return the company to profit.
Hornby said: “By focusing on the most profitable and cash-generative areas of our business, the intention is to reduce activity levels in order to return to profitability.”
It said staff cuts were expected to contribute to annual cost savings, but Hornby did not provide the number of jobs cut to date in its interim report.
The company said: “We expect full-year revenue to fall by around a quarter year-on-year as a result of this planned reduction in the scale of the business.”
Turnover
Hornby said it saw turnover drop 2 per cent from £22.3 million to £21.9 million in the six months to September, and saw pre-tax losses widen to £4.7 million from £4.5 million last year.
Chief executive Steve Cook said: “The group has traded steadily during the first half of the year, but revenue is expected to decline significantly year-on-year in the second half as the planned rationalisation of product lines, channels and certain international brands takes effect. We remain confident of meeting the board’s financial targets for this financial year.”
The Kent-based company said it does not plan to revive dividend payments.
The group has seen its shares plummet over the past year after a string of profit warnings, with its stock price plunging over 65 per cent since December 2015. – PA
