8th Dec 2015 08:31
LONDON (Alliance News) - Hobby products retailer Hornby PLC on Tuesday said its pretax loss widened in the first half as it continues to restructure the business, though while revenue dipped the company said its sales performance has improved since the end of September.
Hornby made a GBP4.5 million loss in the half to the end of September, compared to a GBP500,000 loss made a year earlier, as revenue dipped to GBP22.3 million from GBP24.2 million.
The wider loss and lower sales were blamed by the company on the implementation of its new IT system in the UK, which disrupted trading in July and August. This roll-out is now underway in Europe and, last month, Hornby issued a profit warning on the expectation the roll-out in Europe would cause a similar disruption to trading in that region.
The company, known for its miniature train sets and which owns the Scalextric, Airfix models, Humbrol paints and Corgi die cast models brands, also said its restructuring in Europe had been brought forward to the first half, resulting in organisation disruption for the group but which will mean the benefits from the changes made will feed through earlier.
Despite this disruption, however, the group said sales in the UK have improved since the end of September as the benefits from the restructuring flowed through. Sales in the UK rose 10% in the weeks since the end of the half, the company said.
"We are at an important stage in Hornby's transformation. Our new ERP system is now embedded in the UK operation and following significant disruption in the first two months, the business is performing well in the important Christmas and New Year period," said Chief Executive Richard Ames.
"We have pulled forward our reorganisation plan for our European operations, which has contributed to further trading disruption but which accelerates our overall plan. We are confident that these changes will give us the platform from which we can drive our business forward," he added.
Shares in Hornby were down 4.2% to 91.00 pence early Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Hornby