Hornby Recovery On Track As Losses Are Halved

The hobby products group Hornby says it has made "material progress" in its turnaround, announcing that its losses have halved.

The company - best known for its model railway goods - made a statutory loss of £0.52m in the first half of its financial year, down from more than £1m in the same period last year.

The underlying business returned to profit as sales rose by 8%, with trading profit hitting £0.25m from a £0.85m loss in 2013.

Kent-based Hornby said sales of model rail products rose 18% and it had successfully launched a number of key products, including the Scalextric Quickbuild Cops n Robbers set and the Airfix 1:24 Hawker Typhoon Mk1b model ahead of Christmas.

Chief executive Richard Ames said: "We are encouraged with the advances that the Group is making.

"During the first half of the year, the team has made material progress in organising the turnaround of the company.

"The move to the new warehouse facility has been completed smoothly, which gives us the foundations on which we have the room to grow.

"Looking ahead, the results for the full year will depend on the success of the Christmas trading season.

"Current indications are that it will meet our expectations."

Hornby's struggles have included supply chain problems following a decision to outsource manufacturing to China in 1995.

It suggested last year that the company might repatriate some model production to the UK but it is yet to confirm whether that will take place.

Hornby was also weighed down by merchandise it produced for the 2012 London Olympics, having to sell goods at a discount of up to 85% because they did not sell.

The firm said on Friday that its new managed warehouse in Canterbury left it with ample space for growth as it continued to boost its digital sales efforts.