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Hornby's shares tumble as sales fall | Hornby's shares tumble as sales fall |
(about 7 hours later) | |
Shares in model rail company Hornby tumbled by 62% after the firm warned of mounting losses following a "disappointing" start to the new year. | |
The group - whose brands also include Scalextric, Airfix and Corgi - said recent UK trading was far worse than expected. | The group - whose brands also include Scalextric, Airfix and Corgi - said recent UK trading was far worse than expected. |
It now expects to post "substantially" wider underlying pre-tax losses for the full year, between £5.5m and £6m. | It now expects to post "substantially" wider underlying pre-tax losses for the full year, between £5.5m and £6m. |
It revealed a £1m write-off after reviewing its stock and balance sheet. | It revealed a £1m write-off after reviewing its stock and balance sheet. |
The share price closed down by 50p to 31p. | |
Hornby said it was now in talks with its lender, as the scale of losses could see the firm breach its banking agreements. | Hornby said it was now in talks with its lender, as the scale of losses could see the firm breach its banking agreements. |
The company has suffered major disruption from new computer and stock management systems, while European trading was also hit by troubles with suppliers in China. | The company has suffered major disruption from new computer and stock management systems, while European trading was also hit by troubles with suppliers in China. |
The group had seen buoyant trading in the run-up to Christmas, when it said like-for-like sales rose 17% throughout November and December. | The group had seen buoyant trading in the run-up to Christmas, when it said like-for-like sales rose 17% throughout November and December. |
It said trading since the start of the new year had been in "stark contrast". | It said trading since the start of the new year had been in "stark contrast". |
The Kent-based company said while UK trading was expected to improve in February and March, sales would still be "significantly" behind previous expectations. | The Kent-based company said while UK trading was expected to improve in February and March, sales would still be "significantly" behind previous expectations. |
International sales have also fallen short of forecasts, despite returning to growth, rising by 5% across December and January. | International sales have also fallen short of forecasts, despite returning to growth, rising by 5% across December and January. |
Richard Ames, chief executive of Hornby, said: "This has been a real year of change at Hornby. Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish." | Richard Ames, chief executive of Hornby, said: "This has been a real year of change at Hornby. Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish." |
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