NEWS

Demand soars at Hornby but bottom line suffers

Published on: 6th December 2021

Hornby says it has been hit hard by supply chain problems which have caused the company to lose sales, despite strong demand this year.

The company has reported that  supply issues have had a significant effect on overall profits, as it enters the key Christmas trading period.

Lyndon Davies, Hornby chief executive, commented: “Demand for our products is higher than ever, therefore it is disappointing to have experienced the supply chain problems which seem to be easing but remain volatile.”

Hornby said that it was enjoying robust demand across all the company’s brands, which also include Scalextric, Airfix and Corgi. However, shipping times from its overseas factories – the majority of them based in the Far East – have doubled to around 70 days and sales have been lost as a result.

Reporting its financial figures for the six months up to the end of September, the firm said it has seen its statutory pre-tax profit of £17,000 in 2020 fall to a loss of £700,000 in 2021.

The report also revealed that price increases had been inevitable across its portfolio, in order to offset the soaring container shipping costs. However, the board is optimistic that it will have a profitable festive sales season to mitigate the challenging conditions faced over recent months.

In June, Hornby’s full year results for the previous twelve months showed a swing to a pretax profit of £345,000 compared with a loss of £3.4m for fiscal 2020. Hornby attributed the uplift then to its turnaround strategy and an increase in sales across almost all of its channels.

Lyndon Davies added: “We are heading into our key Christmas trading period and right now it is hard to tell what the outcome will be for the next full year results. However, we are as well placed as we can be with our order book 35% higher than it was a year ago.”

 

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