Hornby losses widen but turnaround on track

Hornby saw losses widen in the first six months of the year as the model and hobby specialist cut jobs and carried out restructuring efforts.
Shares in the model train maker fell 4p, or 15.4 per cent, to 22p as the group reported a statutory pre-tax loss of £5.1 million in the six months to September 30, up from a loss of £4.9 million in the same period last year.
The toymaker behind popular brands such as Scalextric and Airfix said it had carried out job cuts and a restructuring programme in September which would result in £1 million of savings. Hornby added that a further £500,000 was expected to be saved next year.
Olly Raeburn, the chief executive of Hornby, said: “We continue to make good progress with our turnaround strategy. H1 2024 [first half of year] has seen us make a number of strategic and structural changes.”
He added that the group’s strategic decisions would deliver “clear operational efficiencies and significant cost savings”.
Revenues at the Margate-based company climbed to £25 million in the first half of the financial year, a 10 per cent increase from the same period in 2023. However, net debt grew to £18.9 million in the six months to September 30, up from £14.8 million last year.
The 103-year-old company was founded by Frank Hornby, who patented Meccano construction toys and went on to create his first clockwork train in 1920.
Earlier this month Hornby sold Oxford Diecast, the model car manufacturing business, which it had acquired only a few years ago for £1.38 million. The toymaker said the sale of the brand would generate capital and reduce the group’s inventory position.
Hornby is continuing to implement a turnaround strategy and is being advised by the Sports Direct founder Mike Ashley. Frasers Group, the parent company of Sports Direct, bought a 9.1 per cent stake earlier this year making it Hornby’s third biggest shareholder.
Frasers Group announced on Wednesday that it had extended its credit and loyalty programme to Hornby. The partnership will allow customers shopping at the toymaker to use Frasers Plus, the group’s “buy now, pay later” product.