Hornby posts loss after poor Olympic sales
Toymaker suspends interim dividend in wake of supply disruption
By CFOWorld.co.uk staff | CFO UK | Published 11:13, 09 November 12
Specialist miniature train-set and toy manufacturer Hornby posted a half-yearly loss on Friday on the back of supply disruptions and weak UK and Olympic sales.
In the six months to 30 September, the company posted a £541,000 pre-tax loss versus a £959,000 profit over the corresponding period last year.
Faced with disruption at a key Chinese supplier, Hornby had already warned in September that it did not expect to turn a profit for the year as a whole.
Sales of its London 2012 merchandise during the summer Olympics and Paralympics were disappointing as overall sales fell 5 percent on an annualised basis.
Chief executive Frank Martin said, "The business is undoubtedly facing short-term challenge. However, we have a coherent strategy to continue to drive the business forward."
The company described the Chinese disruption as particularly frustrating. Hornby said the issue had hit its businesses in Europe particularly hard, where sales fell 30 percent, despite "encouraging demand."
The company has suspended its interim dividend. It also revealed that its cashflow turned moderately negative during the period with a £90,000 outflow. Hornby’s £16 million of debts do not come up for repayment until 2014 and 2015 while September-end cashflow was at £692,000.
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