Hornby (HRN)

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Hornby HRN Logo

Toy manufacturer.

17-Oct-2017 – 33p – £27.9m

Trading Statement & Directorate Change – Up about 20% this month, this update could put a dampener on that! The interim Chairman has decided to leave – Probably because he didn’t like this decision “the Group will no longer offer for sale large quantities of stock at a discount”, which will mean “it is now clear that the shortfall is unlikely to be recouped in the current year. It is expected that revenue will be lower and, consequently, there will be a material impact on profitability in the current financial year”.

Just not enough here to get me interested.

3-Apr-2018 – 23.03p – £28.8m – PER 18.0

Trading Update – Sticking with the “no use of discounting” approach has affected sales (as has late delivery) – Sales and profits lower than last year. Expects to have finance in place by June to support a return to profitability – Barclays have waived a recent quarter breach of covenants (due to the sales and profits issue mentioned above).

I just feel there’s more risk here to the downside than to the upside, at least in the short to medium term. I’ll sit on the side-lines for now.

26-Sep-2018 – 35.9p – £45.1m – PER n/a

AGM Statement – In-line for FY but with plenty of things to worry about.

I still feel more risk to the downside here so I remain Neutral for now.

22-Nov-2018 – 32.5p – £40.7m – PER n/a

Results For The 6 Months To End September 2018 – Revenue down from £17m to £13.8m, Statutory Loss Before Tax of -£3.2m (-£5.7m last time), Net Debt is £1.8m (£4.7m last time). Frugality and bonuses are the name of the game here now “a one-off 5% bonus (to all employees) given for getting to break even and c.15% of operating profit shared between (all) employees thereafter.”

I still don’t feel any more comfort here – I remain Neutral.

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