Hornby shares fell sharply after the models and collectibles retailer said it was on track for a ‘modest’ full-year loss, due to rising costs and weaker-than-hoped sales.
The model train company, which also makes Scalextric cars and Airfix model planes, told shareholders that sales had improved in the final quarter to the end of March but are set to fall short of internal budgets.
Direct-to-consumer sales rose 49 per cent in the quarter compared to the same period last year.
Retailer Hornby said it remained ‘cautious’ about the coming year amid the cost of living crisis
However, that was not enough to offset poor performance over the Christmas quarter when sales fell short of expectations.
‘Whilst group sales and gross margins for the financial year ended 31 March 2023 were ahead of the prior year, we remained behind internal budgets for the full-year,’ it said.
Hornby shares were down by almost 7 per cent to 21.9p at around midday on Tuesday. They have lost around 37 per cent of their value over the last year.
Net debt at the end of March was £5.8million, compared to net cash of £3.9million at the end of March 2022.
This was mainly due to the increased inventories at year end and shortfall in sales, the company said.
‘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,’ it added.
Hornby will unveil its full-year results in June.
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