Model railway company Hornby has returned to a profit for the first time in nearly a decade after an upsurge in interest for its products during lockdown.
The group reported a 33 per cent increase in revenue to £21.1m in the first half of the year, up from £15.9m in 2019. And the Margate-based Hornby reported an operating profit of £200,000 after nearly a decade of losses.
The company made pre-tax profit of £17,000 in the first half of the year, against a £2.5m in the previous year. It is promising given that this is typically a quieter time of the year for Hornby since it it does not include the Christmas period. Traditionally 55 to 60 per cent of its sales fall in the second half of the year.
Hornby benefited from a surge in online sales which at the half-year point had exceeded the sales through this channel than it had achieved in the entire 2019-20 financial year.
Chief executive Lyndon Davies said a move back into profitability had been a “significant milestone, especially considering the Covid-19 pandemic overshadowing every move we make.”
Davies joined the company three years ago and was tasked with restructuring the business which had been “a battle which was fought on many fronts”.
The recovery has in large part been helped by new marketing tie-ups, including Scalextric versions of Batman and Joker cars. Davies said Hornby was also working on adopting the latest technology to its products, including Bluetooth circuit and accessory controllers.
This approach forms what Davies calls his strategy for the “new normal”, which will also focus on Hornby’s online offering with the launch of a new website.
“Hornby has moved into profitability, the growing sales and margins built on the back of the introduction of some fantastic new products, new technology and the changing environment,” Davies said.
“We are heading into our key Christmas trading period and right now it is hard to tell what the outcome will be for the full year results. Our sales continue to be higher than where they were last year, and there is a real energy within the Company for the Christmas season.”