[WWI] Hornby - not doing that well

[Michael Kendix]

Hi:

Looks like Hornby, who acquired the Airfix and Humbrol lines, is not doing 
that well.

Note the mention of Airfix and Humbrol production moving to China. I guess 
the Hull production facility is closed or will be closing?

Michael



This from the Electronic Telegraph's business section:
>>>>>
Hornby shares slump as results disappoint
By Caroline Muspratt
Last Updated: 8:58am BST 01/06/2007



Model train maker Hornby saw a recovery in sales in the second half of the 
year but the company's full-year results did not meet market expectations.

The hobby company said that sales rose 6pc to £46.9m last year while pre-tax 
profits rose to £8.1m from £8m. The shares fell 10¼ to 275¾p in early 
trading.

Frank Martin, chief executive of Hornby, said: "This has been an important 
developmental year for the group. All our overseas subsidiaries have made 
excellent progress in terms of sales and profits growth and the 
establishment of a platform for future profitable growth."

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He added: "First half sales were below the previous year but in the second 
half we were able to recover more than this shortfall, thus demonstrating 
once again the robust nature of the hobbyist market. Our international 
operations are now beginning to show their true potential, and we are 
confident that they will continue to deliver encouraging progress in the 
future."

Mr Martin said that customers are prepared to pay more for digital control 
systems in both Scalextric and Hornby.

UK sales were flat on the previous year after a weak first half was offset 
by a recovery in the second part of the year helped by demand in the run-up 
to Christmas. International sales also improved in the second half of the 
year

The group made a loss of £134,000 on setting up its German business but said 
the unit would make a positive contribution to profits in the new financial 
year while all other European subsidiaries reported increased profits in the 
year.

In the US, sales rose 8pc to $5.6m but when translated into sterling sales 
fell to £2.83m compared to £2.95m the year before.

Results were also hit by the closure of the Scalextric Race World retail 
store in Tacoma. Last year Hornby bought the Humbrol and Airfix brands and 
is transferring production to China.

Altium Securities provisionally reduced its target price on the stock to 
250p from 315p and cut its recommendation to reduce from add. Bridgewell 
Securities also downgraded its recommendation to neutral from overweight, 
reflecting a slower recovery in the UK than expected.

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