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Model train and Scalextric slot car maker Hornby are unlikely to meet market expectations, the company warned this morning (27 January 2012).
Growth in sales in the UK was muted in the pre-Christmas period compared to a year earlier, largely due to a drop in sales of train sets and Scalextric slot car sets.
In a trading update to the Stock Exchange, Hornby said that although sales remain the ahead of comparable 2010/11 revenue, the rate of growth is below management expectations.
"We recognise that trading conditions in the UK and the rest of Europe will continue to be challenging for the foreseeable future and are likely to continue to constrain sales of our high ticket Hornby and Scalextric items," said Chairman Neil Johnson.
"The challenging economic environment impacted UK sales negatively pre- Christmas. In anticipation of continuing difficult trading conditions, we have adapted our business to offer a wider range of products at lower price points in categories complementary to our core business," he added.
"The company therefore expects that pretax profits in respect of the year to March 31 2012 are likely to be below current market expectations," the statement said.
The group said it has taken action to reduce costs and had launched its London 2012 range for the Olympic Games.
Shares fell 30p to 93.5p, down about 17%.
Growth in sales in the UK was muted in the pre-Christmas period compared to a year earlier, largely due to a drop in sales of train sets and Scalextric slot car sets.
In a trading update to the Stock Exchange, Hornby said that although sales remain the ahead of comparable 2010/11 revenue, the rate of growth is below management expectations.
"We recognise that trading conditions in the UK and the rest of Europe will continue to be challenging for the foreseeable future and are likely to continue to constrain sales of our high ticket Hornby and Scalextric items," said Chairman Neil Johnson.
"The challenging economic environment impacted UK sales negatively pre- Christmas. In anticipation of continuing difficult trading conditions, we have adapted our business to offer a wider range of products at lower price points in categories complementary to our core business," he added.
"The company therefore expects that pretax profits in respect of the year to March 31 2012 are likely to be below current market expectations," the statement said.
The group said it has taken action to reduce costs and had launched its London 2012 range for the Olympic Games.
Shares fell 30p to 93.5p, down about 17%.