British model train and hobby specialist Hornby has reported deepening losses in its half-year results, despite implementing significant restructuring efforts and experiencing revenue growth. The company’s shares tumbled 15.4 per cent to 22p after revealing a pre-tax loss of £5.1 million for the six months ending 30 September, compared to a £4.9 million loss in the same period last year.
The Margate-based toymaker, known for iconic brands Scalextric and Airfix, saw revenues climb 10 per cent to £25 million during the period. The company has undertaken substantial cost-cutting measures, including job reductions, which are expected to yield £1 million in savings, with an additional £500,000 projected for the following year.
Chief Executive Olly Raeburn expressed confidence in the company’s strategic direction, stating that the restructuring efforts would deliver “clear operational efficiencies and significant cost savings”. However, the company’s net debt position has deteriorated, rising to £18.9 million from £14.8 million in the previous year.
The 103-year-old manufacturer recently divested Oxford Diecast, a model car manufacturing business, for £1.38 million to generate capital and reduce inventory levels. Sports Direct founder Mike Ashley’s Frasers Group, which holds a 9.1 per cent stake in Hornby, has extended its credit and loyalty programme to the model train maker, allowing customers to access the ‘buy now, pay later’ Frasers Plus product.
The strategic partnership with Frasers Group, combined with ongoing restructuring efforts, signals a determined push towards financial recovery for the beloved British brand, despite the challenging trading conditions reflected in the latest results.
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