Hornby slumps as consumers shy away from big ticket toys

[John Ashworth]

Hornby slumps as consumers shy away from big ticket toys

9:03 am 27/01/12 by Philip Whiterow
proactive investors

Hornby (LON:HRN) shares slumped by a quarter as the toy group warned sales of model railways and racing car sets stalled over the crucial Christmas period.

UK sales fell below last year as its core Scalextric and Hornby brands suffered as consumers reined back spending on expensive toys.

Sales this year to date were still ahead of a year ago, but the rate of growth was below expectations and profits for the year to March will be below forecasts, Hornby warned.

“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,” it added.

The group said it has taken action to reduce costs and to broaden its portfolio.

As well as Horby and Scalextric, the group also owns the Electrotren, Lima, Jouef, Rivarossi, Airfix, Humbrol and Corgi brands.

The group has high hopes for its London 2012 range for the Olympic Games. It has also signed a global licence deal with the owner of Moshi Monsters to produce to produce and distribute collectable pin badges and die cast vehicles based on the characters. A Star Wars-based range for Scalextric also launches next month.

Chairman Neil Johnson said it was extraordinarily difficult to predict sales in the current environment.

"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.

Shares fell 30p to 93.5p.

[John Ashworth]

HORNBY TO BRANCH OUT AS PROFITS TUMBLE

Express
Saturday January 28,2012

PROFITS at model railway and Scalextric maker Hornby ran out of steam after Christmas shoppers bought fewer higher-priced toys.

It said annual profits were likely to fall short of market hopes after festive sales of goods, particularly its more expensive train and Scalextric sets, fell about 15 per cent against a year ago.

The shares tumbled 22½p to 101p but Hornby said the hobby market was holding up and it was launching cheaper products to boost demand.

Chief executive Frank Martin said: “We’re refocusing on products with prices that are right for the times.” It is launching Scalextric Star Wars products in February and pre-school Corgi products based on the new TV series Olly The Little White Van.

The company plans to move away from its traditional boys market with collectable horses for girls in a deal with Reeves International.

It has struck a deal with fantasy war game specialist Mantic Games to distribute the latter’s Kings of War products under its Humbrol brand.

The group has secured rights on badges and toy vehicles based on Mind Candy’s brand Moshi Monsters. It also has high hopes for its Olympics products, on show at this month’s Toy Fair.