Structural changes to the UK business have been completed.
Hornby Hobbies has reported that its turnaround plan is progressing as expected. It is at an advanced stage in transferring key European operations to the UK, and the company expects this to be completed by the end of the financial year.
An update said: “The rationalisation of the product range and associated reduction in capital expenditure were delivered in line with our plans. New catalogues for the 2017 product range have been launched and were received positively by our customers and consumers. The closure of the concession channel is proceeding as planned and we have continued to steadily reduce group stock levels while taking care not to disrupt core sales through existing channels”.
At 31st December 2016, stocks were £11.2m (2015: £15.5m) and net debt was £2.7m (2015: £6.4m)
It continued: “As previously announced, revenue is expected to decline by around 20-25% this financial year due to the rationalisation of the business. Group revenue reduced by 25% year on year during the Christmas period and UK revenue was down by 21%, in line with expectations. Underlying Christmas trading was healthy and we have enjoyed a solid January sales period. All sales channels have performed in line with or better than our expectations. In particular, sales to independent retailers were robust with positive growth of 4% year on year during the period as we continued to strengthen partnerships with these important customers.”