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Model train set manufacturer Hornby (LSE:HRN) saw its shares decline on Wednesday following the release of its latest financial update, which indicated strong sales and profit growth but also highlighted performance that fell short of internal projections due to shipping delays.
In a report covering the period from April 1 to the end of August, Hornby revealed that both sales and gross profits had increased by 10% compared to the previous year. However, the company noted that these figures were slightly below its internal forecasts due to delays in shipping. As with many businesses in the industry, Hornby's full-year results will be influenced by sales during the critical Christmas trading season.
Despite these challenges, Hornby reported a robust order book with several new products yet to be launched. Direct-to-consumer invoiced sales rose by 11% compared to the previous year and by 56% when compared to the same period in 2022. The company has made significant progress on strategic initiatives outlined in its most recent Annual Report. Although inventory levels remain high due to planned stock build-up ahead of the peak trading period, total stock holding is 7% lower than at the same time last year.
Hornby anticipates that inventory levels will decrease further during the key Christmas period. The company's outlook for the full year remains unchanged despite the delays and high inventory levels.
As of 09:40 BST, Hornby’s shares were down by 4.3% at 20.10p.
