Hornby warns on profits after snow disrupts model train maker's sales
Wednesday 26 January 2011
Shares in Hornby slumped 10.6 per cent yesterday after the model-train maker warned its full-year profits had been derailed by December's snow.
Hornby said the sales growth in the UK in the first half of the its financial year to 30 September had not continued in the pre-Christmas period. Like many other retailers, Hornby, which also owns Scalextric, blamed the "impact of the inclement weather" for sales being lower than expectations.
In addition, the company said that while there had been an improvement in execution, full-year sales at its European subsidiaries would not recover the ground lost in the first half, when "supply-chain issues" had led to shortages of products. These weaknesses caused Hornby to warn its pre-tax profits for the year to 31 March are "likely to be below current market expectations". The statement sent Hornby's shares down by 14.5p to 123p.
However, Hornby said it had an "encouraging pipeline of new product releases", such as a computer-based digital control system, "Railmaster", for model railways. It also touted an increasing range of Corgi merchandise associated with the London 2012 Olympics.
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