Model train maker Hornby posted mounting losses and gave no full-year outlook, but said it is well stocked for the crucial Christmas season as the supply chain crisis eases.
The group posted a pre-tax loss of £2.9m in the six months to 30 September in what has been a “difficult” financial year to date, compared to a loss of £700,000 a year earlier.
Last Christmas, Hornby suffered a stock shortage due to shipping delays amid widespread supply chain issues.
But it said it is now in a “strong position”, with shipments from its overseas factories up 40% on last year, while also stockpiling early to ensure it doesn’t run short.
However, the group was hesitant to give a full-year forecast, deeming the outcome “difficult to say” amid the cost-of-living crisis in the face of pressure on consumer spending during the all-important Christmas period.
Hornby’s outgoing executive chairman Lyndon Davies said: “We are entering our most important Christmas trading period and it is difficult to say at this point what the impact will be on the year’s results.
“It has been over 40 years since the UK last experienced an inflationary shock on the scale we are seeing today, and the UK economy of the 1970s – heavily subsidized and geographically centered on dependency heavy industry – was incomparably different than the current economy.
A year ago, sales in the second half were hampered by supply chain issues.
Mr Linden said the group continues to suffer from late shipment departure dates as the shipping industry reduces capacity by canceling sailings while costs fail to return to pre-Covid levels, although container rates continue to fall.
According to the company, “We’ve mitigated potential supply disruptions this Christmas by pushing forward shipping dates on key product lines already available in our warehouse.”
It said the order book is “much stronger and higher than a year ago”.
Sales rose 3% to £22.4m in the first half, with website direct sales up more than 50% and set to continue to grow in the remaining six months.
Mr. Lyndon will soon hand over the reins to Paperchase boss Ollie Raeburn, who will take over as CEO on January 23.
Mr. Lyndon will then hand over his executive responsibilities and become non-executive chairman.