Hornby: Mike Ashley-advised toy train giant steams ahead after festive boost
Hornby, the international toy company advised by billionaire Frasers Group founder Mike Ashley, reported a boost in sales thanks to a bumper festive season and first-time customer attraction.
The international models and collectables group told markets today it witnessed a seven per cent surge in group sales for the third quarter ended 31 December.
Group sales for the financial year are up eight per cent, while gross profits have surged by 10 per cent.
The toy firm attributed the positive momentum to a “strong programme” of Black Friday and Christmas activity, which contributed to 23 per cent revenue growth and 38 per cent gross profit compared to the previous year.
This is despite an overall gloomy festive season for a number of high street retailers. According to the British Retail Consortium, non-food sales in the UK decreased by 1.5 per cent during this year’s golden quarter.
Chief executive Olly Raeburn said: “In a tough economic climate, we are pleased to be able to report growth in revenue, margins and gross profits through this critical quarter.
“Concurrently we are continuing to drive down the inventory levels that had built up in recent years and are delivering our change plans in a steady and sustainable way.”
The impact of Mike Ashley
Retail tycoon Mike Ashley took up a consultancy role within Hornby in March after it had significantly increased its stake in model railways manufacturer the month prior.
The owner of Sports Direct and House of Fraser had acquired more than 11m shares in the Kent-based company, taking its total holdings to more than 15m, or 8.9 per cent.
In a trading update to the London Stock Exchange the following autumn, Hornby revealed that its sales and gross profit increased by 10 per cent in the period from 1 April to 31 August, 2024, compared to the same time in 2023.
Its current outlook for the year ending March 2025 is “on track for year-on-year growth,” Hornby reported today, adding that the firm “continues to work on many of the turnaround initiatives” currently in place.
“Our turnaround is very much on track as we further reduce central costs, focus on our core brands and improve operational processes across the business,” Raeburn said.