Lockdown boredom helps Hornby return to profit
Lockdown boredom has accelerated Hornby’s turnaround with the company famed for its model trains, Airfix aeroplanes and Scalectrix racing cars returning to profit.
In an interim results update pulled forward from November, the company posted sales a third higher at £21.1m and a return to the black with an operating profit of £200,000 after almost a decade of losses.
At a statutory level, the Margate-based company made pre-tax profit of £17,000 in the six months to the end of September, against a £2.5m loss last time. The period is traditionally the quieter half of the year for Hornby as it does not cover the crucial Christmas period.
Chief executive Lyndon Davies took control of Hornby three years ago after previous management endured a series of boardroom bust-ups and rows with investors.
The veteran of the toy industry set about ending aggressive discounting policies and improving relationships with suppliers in South East Asian as part of a radical plan to "fix the engine" get the business back on track.
As lockdown started Mr Davies said the company had experienced demand levels of the kind “we normally see at Christmas” as people with time on their hands looked for ways to fill it.
He added: “I saw the same thing in the 2008 crash because people turned inward as they sought things that made them comfortable.”
Hornby was braced for the upset caused by coronavirus as it saw its suppliers in countries such as China hit first, giving time to prepare for the likely impact of the pandemic.
The company's recovery has been helped by its pursuit of new marketing tie-ups, such Scalextric versions of Batman and Joker cars, and Reliant van as driven by Del Boy in Only Fools and Horses.
Hornby is also attracting younger fans with simpler models which can easily be slotted together, as well as more discerning hobbyists with its most complex Airfix models ever, such as a 1:24 scale, 600-component model of a Grumman Hellcat F6F-5 fighter.
Improvements to the quality of the products such as more reliable train and Scalectrix tracks, as well as apps which allow cars and trains to be controlled via apps, have also increased interest.
