Hornby Plc, maker of Corgi toys, model trains and Scalextric sets, said it is back on the path to improvement, but still has a “long way to go” as the company reported a half-sized loss for the first six months of the financial year.
The toymaker said losses decreased to £520 000 for the six months ended September 30, down from last years loss of £1.09 million.
However, underlying profit reached £250 000, up from £850 000 below the zero mark in the same period last year.
In recent years the British company had to deal with a series of problems which may be over as the company announced improvement in performance.
In April the company released its third profit warning within two years, due to unfavourable currency changes and difficulties with one of its suppliers. Two months later, Hornby reported a pre-tax loss of £4.6 million and changed its debt arrangements.
Hornby made some changes within its ranks and appointed Richard Ames as CEO in April. With the efforts of Mr. Ames, former executive of betting group Ladbrokes, Hornby decreased bad results.
Under the leadership of Mr. Ames, the company closed its old depot in Margate and switched to an upgraded warehouse in Hersden near Canterbury. The move was aimed at enhancing distribution,stock management and overall growth.
“We are encouraged with the advances that the group is making” said Mr Ames. “During the first half of the year, the team has made material progress in organising the turnround of the company.”
Sales for the half-year stood at £24.2 million, 8% more compared to the £22.4 million that the company reported last period. Performance was boosted by the 21% sales increase in the groups international business, in comparison U.K. sales grew 5% in the six months.
Sales of model rail toys jumped 18% year-to-year, helped with the release of several new products, including the Flying Scotsman train set. The company acknowledged that it still had a “long way to go” until it reaches the desired level of manufacturing and supply chain performance for its toys.
Hornbys product delivery to order ratio increased to 65% for the first business half of the year, last year that number stood at 59%. The company projected that it will continue to improve the ratio and post even better result for the second half.
Hornby PLC lost 0.69% on Wednesday and closed at GBX 72.00 in London. On Friday the stock gained 2.18% to trade at GBX 73.57, marking a one-year decrease of 13.45%. The company is valued at GBP 28.20 million. According to the Financial Times, the one analyst offering a 12-month price target expects share price to fall to GBX 65.00 in the next year from the last close price of GBX 72.00.
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