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Hornby, the renowned model railway manufacturer, has reported a remarkable 23 per cent increase in December sales year-on-year, demonstrating the enduring appeal of traditional toys in today’s digital age. The Margate-based company’s fourth-quarter revenue climbed 7 per cent, marking a significant achievement in challenging economic conditions.
The company’s direct-to-consumer strategy has proven particularly successful, with nearly half of Black Friday sales originating from first-time customers, up from 42 per cent in the previous year. Chief Executive Olly Raeburn expressed satisfaction with the company’s performance, highlighting growth in revenue, margins and gross profits during this crucial trading period.
Overall group sales have risen by 8 per cent in the current financial year, accompanied by a 10 per cent increase in gross profits. The company, which also owns popular brands Scalextric, Airfix, and Corgi, has been implementing strategic measures to return to profitability following several challenging years marked by substantial losses.
Sports Direct founder Mike Ashley’s involvement since March 2024, when his Fraser Group acquired an 8.9 per cent stake, has contributed to the company’s turnaround efforts. The implementation of £1 million in cost reductions and the divestment of loss-making operations have been key components of the recovery strategy.
Industry experts attribute the resurgence in traditional toys and games to families seeking more meaningful interaction. The trend aligns with the broader success of the hobby games sector, as exemplified by Games Workshop’s recent promotion to the FTSE 100.
Despite the positive trading update, Hornby continues to address its financial position, with net debt slightly improving from £18.8 million in September to £18.2 million by year-end. The company has also successfully reduced ageing stock inventory by 23 per cent since March, bringing it down to £16.6 million.
The company’s share price responded positively to the news, rising 12 per cent to 28½p, marking a significant recovery from its record lows at the end of 2023.
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