Model railway maker Hornby boosted by online summer sales
- Internet sales from April to August increased by more than a third from a year earlier.
- Margate-based group predicts double-digit annual sales growth
- Hornby sells Scalextric car racing sets, Corgi cars and Airfix model planes
Excellent online demand helped toymaker Hornby recover over the summer after a disappointing result last year.
Online sales from April to the end of August rose by more than a third on the same period last year, the Margate-based company told investors on Wednesday.
As a result, revenue and margins were stronger and in line with the company’s predictions of a “low double-digit” expansion in revenue by fiscal 2024.
Staying the course: Toymaker Hornby revealed that online sales from April to the end of August rose by more than a third on the equivalent period last year.
However, the model railroad maker cautioned that the outcome would depend on its performance during the critical Christmas trading season.
Group sales rose 2.5 per cent to £55.1m for the 12 months ending March 2023, hit by weaker-than-expected demand between October and December amid an uncertain economic context.
Although trading improved in the latest quarter, rising fixed costs meant Hornby suffered a loss of £5.9m, having posted a profit of £1.5m the previous year.
Additionally, the company’s debts increased following excessive stockpiling as manufacturing production reached its highest levels.
Although progress had been made in reducing old stock, Hornby acknowledged that inventory volumes remained high at the end of August due to the planned build-up of new supplies ahead of the peak autumn sales period.
Founded in 1901 by Liverpool businessman Frank Hornby, the company’s model train brands include Jouef, Lima and Electrotran, but it also sells Scalextric car racing sets, Corgi cars and Airfix model airplanes.
Over the previous decade, the company had struggled financially, as it endured several years of losses caused by declining interest in model collecting, problems with foreign suppliers, and tougher competition from rivals.
This led to a turnaround plan launched in 2016, which included a share placement, a reduction in overseas operations and cuts to product ranges and investments.
Phoenix Asset Management acquired a majority stake in Hornby six years ago and appointed a new chairman and chief executive to lead the turnaround.
Sales only began to recover significantly when the tough lockdown restrictions introduced in the wake of the Covid-19 pandemic led many families to take up new hobbies.
Horny actions They were steady at 16.5p early on Wednesday afternoon, but have fallen around 42 per cent so far this year.