10 February 2016
|
Hornby
Iconic company in negotiations with lenders after poor January sales
There may be trouble ahead for Hornby Hobbies after the iconic company issued its fourth profit warning in three years and bosses revealed that poor sales could mean the company will be unable to pay its bank loans.
Chief executive Richard Ames said that a turnaround and major investment wasn’t working and sales in January slumped, with profits decreasing by between £2.5m and £3m. On top of this bleak news came the announcement that the company’s banking covenants may be missed next month and directors are in negotiations with lenders.
The company previously issued a profits warning in November, stating that losses would be around £2m. However, Hornby has now said that after conducting a full stock take, it predicts it will take a charge to profits of £1m for the white down of the value of the stock.
The main problem came from the UK where there disappointing response to January promotions, despite sales in the run up to Christmas being 17% up on the previous year.
Richard Ames added: “Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish.”