Financial results reported this week show Hornby enjoying a pretax profit on higher revenue and current trading meeting expectations.
As predicted in a trading update issued in April, Hornby has achieved sales of £48.5m for the year to 31st March 2021, up 28% on the year before. The company said that the company has swung to a pretax profit of £345,000 compared with a loss of £3.4m for fiscal 2020.
Hornby has attributed the uplift to its turnaround strategy and an increase in sales across almost all of its channels as customers increasingly turned to hobbies over the coronavirus pandemic and associated lockdowns.
Chief executive Lyndon Davies told the BBC that recent sales figures indicated the momentum is expexted to continue: “When there’s problems in the world, people do turn inwards, they look for things of comfort – and in a hobby, they find comfort,” he explained. “Model railways, Scalextric sets running around the attic; there’s been a lot of engagement from people.”
However, Lyndon added that Hornby was concerned about shipping issues causing supply chain disruption. The company imports many of its products from East Asia, and has been affected by closures at Chinese ports due to coronavirus.
“There are still shipping delays from our supply chain with container shortages,” said Lyndon. “Shipping costs from our factories are three times what they were previously.”
The company update also said that shipping to the EU has faced “countless importation difficulties”, which caused shipments to the region to be put on hold for a time. “In recent weeks, shipments have resumed,” the company confimed, “but there are still delays in certain countries whose procedures are unnecessarily rigid.”
Revenue was £48.5m, compared with £37.8m the year before, but the board has not declared a final dividend as the comapny’s turnaround strategy is still ongoing. Hornby is optimistic about trading going forwards, adding: “Since the end of March, our sales have been in line with expectations. The engine at the heart of the company is firing and we anticipate a stronger demand for our products, with more online direct sales.”