Interim Results

Hornby PLC 15 November 2002 HORNBY REAPS BENEFITS OF NEW PRODUCT LAUNCHES AS SALES INCREASE 32% Hornby Plc ('Hornby'), the models and collectables Group, has today announced its interim results for the six months to 30 September 2002. Hornby's two main products are Hornby model railways and Scalextric slot car racing systems. Highlights â€¢ Pre-tax profits up by 108% to Â£1.7 million (2001: Â£794,000) â€¢ Turnover up 32% to Â£14.0 million (2001: Â£10.6 million) â€¢ Earnings per share up to 14.4p (2001: 7.2p) â€¢ Concessions target exceeded - 52 in operation â€¢ Successful launch of Scalextric 'Sport' range â€¢ Hornby Railways delivering impressive performance â€¢ Cash position improved to Â£1.6 million â€¢ Interim dividend increased to 6.0p (2001: 2.0p) Frank Martin, Chief Executive of Hornby, said, ' Hornby's strategy for growth is now firmly established. The improved detailing, combined with the stream of new products, has resulted in the Hornby and Scalextric ranges performing extremely well. We are experiencing excellent sales growth, both in the independent model and hobby sector, as well as from our concessions. Combined with our 'My First Hornby' and 'My First Scalextric' products that appeal to younger children, Hornby customers now range in age from 4-80. ' In Scalextric, we have launched our Scalextric 'Sport' range, with a completely new click-fit track design and super detail cars. Together with our Race Management System, Scalextric has now become a hobby that appeals to all ages. We now have a wide range of cars spanning Formula 1, World Rally, Touring Cars, American Classics, GT Racing and NASCAR. This has recently been complemented by our new Le Mans Classics including the famous Ford GT40 and our Australian cars. ' Hornby railways has also achieved an excellent performance. We have introduced a number of new products including the 'Black 5 locomotive', which have been enthusiastically received by Hornby collectors. ' Looking to the future, the longer term prospects for the Group are excellent. We are continuing to develop exciting and innovative products, many of which will be launched during 2003.' -ends- Date: 15 November 2002 For further information contact: Hornby Plc City Profile Group Frank Martin, Chief Executive Simon Courtenay John Stansfield, Finance Director Ed Senior 01843-233500 020-7448-3244 or 07958-754273 On 15 November: 020-7448-3244 e-mail:simon.courtenay@city-profile.com Web: www.hornby.com or: www.scalextric.com CHAIRMAN'S REVIEW During the past six months, the Company has increased sales both of Hornby and Scalextric products across all major market categories. I am pleased to report that the half-year sales at Â£14.0m were 32% higher than for the same period last year. Profit before tax at Â£1.7m was 108% higher than for the same period last year and diluted earnings per share rose from 7.2p to 14.4p. Dividend As indicated in the latest Annual Report and Accounts, your Board wishes to increase the proportion of the dividend paid at the interim stage. I am therefore pleased to announce an interim dividend of 6.0p (2001 - 2.0p) per ordinary share payable on 24 January 2003 for those shareholders on the register as at 31 December 2002. Operating Review The outstanding performance of the past six months reflects the ongoing success of the product development and marketing strategies applied to both our major brands. In the UK, the independent model and hobby sector continues to record impressive sales growth. This has been driven by the introduction of excellent new products in Hornby Railways, notably the Black 5 locomotive, and the introduction of the new Scalextric 'Sport' system with completely new click fit track design and super detail cars. Direct sales via our retail concessions were also higher. With 52 concessions in operation we have already exceeded our goal of increasing the number of concessions to at least 50 during the current financial year. In addition the fact that these concessions are already operating means that we will derive full benefit from the important pre-Christmas sales period. In export markets, the Scalextric 'Sport' system has been well received. Although our sales to export markets represent a small proportion of our overall revenues, we are pleased to report an increase of 25%. We have also targeted specific overseas markets by introducing Scalextric cars directly relevant to individual markets. For example, in the USA we have launched the Ford Mustang and Chevrolet Camaro 'Muscle cars' and the Ford GT40. In Australia, we have recently introduced the Holden V8 and the Ford Falcon V8. These two models will be sold as individual cars and also as part of the aptly-named 'Thunder Down Under' race set. Scalextric USA continues to make good progress. Sales in US dollars by Scalextric USA increased by 18% compared to the same period last year. However this increase is diluted when converted into Sterling at the appropriate current exchange rate. We see significant potential in North America, and continue to expand the distribution base. The Company has benefited during the past 6 months from the effects of the relative strength of Sterling against the Hong Kong dollar, the currency in which the majority of our products are purchased. It is the Company's policy to maintain a prudent level of forward currency purchases in order to insure against short-term fluctuations in exchange rates. Forward purchases of Hong Kong dollars are now sufficient to meet the Company's purchasing requirements to the end of the current financial year. The Company's cash position has improved by Â£1.4m compared to 30 September 2001, notwithstanding an increase in working capital employed of Â£0.5m. This favourable result underlines the cash generative nature of the Company's business model. This allows us to continue to invest in the development of exciting and innovative products and the use of technology to enhance our product range. Property As indicated in the latest Annual Report and Accounts our planning applications for a new Warehouse, Headquarters Offices and Hornby Heritage Centre have been referred to the Secretary of State for adjudication. The public hearing is to be held in January 2003. It is hoped that the result of the hearing should be known around the end of the current financial year. If planning approval is granted the series of transactions associated with the sale of the existing Margate site and the construction of the new facilities detailed above, may require shareholder approval. Details of these transactions will be circulated to shareholders if appropriate before entering binding commitments. Summary Hornby has made an excellent start to the current financial year. Although the prospects for the full year are positive, much will still depend on continued strong demand for the Company's products between now and Christmas. In this connection we should not expect to be immune from the effects of any major shift in economic factors or consumer demand in the market generally. Looking a little further ahead the Company continues to develop exciting and innovative product ranges designed to maximise future performance. Neil Johnson Chairman 15 November 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002 Six months Six months Year ended to 30 September to 30 September 31-Mar 2002 2001 2002 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 TURNOVER 14,018 10,629 28,489 Operating costs (12,395) (9,865) (24,815) _______ _______ _______ OPERATING PROFIT 1,623 764 3,674 Net interest receivable 32 30 48 _______ _______ _______ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,655 794 3,722 Tax on profit on ordinary activities (589) (272) (1,329) _______ _______ _______ PROFIT FOR THE PERIOD 1,066 522 2,393 Dividends (434) (145) (1,234) _______ _______ _______ RETAINED PROFIT FOR THE PERIOD 632 377 1,159 _______ _______ _______ EARNINGS PER ORDINARY SHARE Basic 14.66p 7.19p 32.97p Diluted 14.43p 7.19p 32.56p Dividend per ordinary share 6.0p 2.0p 17.0p All the activities of the Group are continuing. STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES Â£'000 Â£'000 Â£'000 Profit for the financial period 1,066 522 2,393 Exchange adjustments offset in reserves (18) (10) - _______ _______ _______ TOTAL RECOGNISED GAINS FOR THE PERIOD 1,048 512 2,393 _______ _______ _______ CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2002 30-Sep 30-Sep 31-March 2002 2001 2002 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 FIXED ASSETS Intangible assets 33 36 36 Tangible assets 3,543 3,679 3,625 Investments - Short Term Incentive Plan 192 - - _______ _______ _______ 3,768 3,715 3,661 CURRENT ASSETS Stocks 7,989 6,873 5,535 Debtors 9,007 7,681 4,888 Cash at bank and in hand 1,576 136 6,477 _______ _______ _______ 18,572 14,690 16,900 CREDITORS: Amounts falling due within one year (7,804) (5,253) (6,755) _______ _______ _______ NET CURRENT ASSETS 10,768 9,437 10,145 _______ _______ _______ TOTAL ASSETS LESS CURRENT LIABILITIES 14,536 13,152 13,806 CREDITORS: Amounts falling due after more than one year (37) (65) 16) PROVISIONS FOR LIABILITIES AND CHARGES (673) (717) (628) _______ _______ _______ NET ASSETS 13,826 12,370 13,162 _______ _______ _______ CAPITAL AND RESERVES Share capital and reserves 7,464 7,431 7,422 Profit and loss account 6,362 4,939 5,740 _______ _______ _______ EQUITY SHAREHOLDERS' FUNDS 13,826 12,370 13,162 _______ _______ _______ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 30-Sep 30-Sep 31-Mar 2002 2001 2002 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Profit for the financial period 1,066 522 2,393 Dividends (434) (145) (1,234) Exchange (loss) on investment (18) (10) - Shares issued 50 - - _______ _______ _______ NET ADDITIONS TO SHAREHOLDERS' FUNDS 664 367 1,159 Opening shareholders' funds 13,162 12,003 12,003 _______ _______ _______ CLOSING SHAREHOLDERS' FUNDS 13,826 12,370 13,162 _______ _______ _______ CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002 Six months Six months Year ended to 30 September to 30 September 31-March 2002 2001 2002 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Net cash (outflow)/inflow from operating activities (2,262) (3,486) 4,437 Returns on investments and servicing of finance 32 30 48 Taxation (878) (291) (872) Capital expenditure and financial investment - purchase of fixed assets (506) (600) (1,440) - sale of fixed assets 11 26 34 Purchase of own shares - Short Term Incentive Plan (192) - - Payment of deferred consideration (49) - (38) Equity dividends paid (1,086) (726) (871) _______ _______ _______ Net cash (outflow)/inflow before financing (4,930) (5,047) 1,298 Financing Issue of ordinary shares 50 - - Capital element of finance lease payments (13) (27) (33) _______ _______ _______ (Decrease)/increase in cash in the period (4,893) (5,074) 1,265 _______ _______ _______ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Â£'000 Â£'000 Â£'000 (Decrease)/increase in cash in the period (4,893) (5,074) 1,265 Cash outflow from decrease in lease financing 13 27 33 _______ _______ _______ Change in net funds resulting from cash flows (4,880) (5,047) 1,298 New finance leases (28) - - Exchange movements (8) (2) - _______ _______ _______ Movement in net funds in the period (4,916) (5,049) 1,298 Net funds at 1 April 2002 6,446 5,148 5,148 _______ _______ _______ Net funds at 30 September 2002 1,530 99 6,446 _______ _______ _______ NOTES TO THE CASH FLOW STATEMENT NET CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Year ended to 30 September to 30 September 31-March 2002 2001 2002 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Operating profit 1,623 764 3,674 Exchange adjustments offset in reserves (7) (8) - Depreciation charges 650 573 1,468 Amortisation of goodwill 3 2 2 Profit on sale of tangible fixed assets (1) (4) (10) (Increase) in stocks (2,454) (2,633) (1,295) (Increase)/decrease in debtors (4,132) (2,729) 67 Increase in creditors 2,011 599 512 Increase/(decrease) in sales returns provision 45 (50) 19 _______ _______ _______ Net cash (outflow)/inflow from operating activities (2,262) (3,486) 4,437 _______ _______ _______ GEOGRAPHICAL SEGMENT INFORMATION Six months Six months Year ended to 30 September to 30 September 31-March 2002 2001 2002 (unaudited) (unaudited) (audited) BY ORIGIN Â£'000 Â£'000 Â£'000 TURNOVER United Kingdom 12,997 9,717 25,746 United States of America 1,021 912 2,743 _______ _______ _______ Group 14,018 10,629 28,489 _______ _______ _______ Â£'000 Â£'000 Â£'000 PROFIT BEFORE TAX United Kingdom 1,755 919 3,839 United States of America (100) (125) (117) _______ _______ _______ Group 1,655 794 3,722 _______ _______ _______ Â£'000 Â£'000 Â£'000 NET ASSETS United Kingdom 13,710 12,179 12,950 United States of America 116 191 212 _______ _______ _______ Group 13,826 12,370 13,162 _______ _______ _______ BY DESTINATION Â£'000 Â£'000 Â£'000 TURNOVER United Kingdom 10,608 7,898 22,439 Rest of the world 3,410 2,731 6,050 _______ _______ _______ Group 14,018 10,629 28,489 _______ _______ _______ NOTES: 1. Basis of preparation The interim financial information has been prepared on the basis of accounting policies set out in the Report & Accounts for the year ended 31 March 2002. The taxation charge for the six months ended 30 September 2002 has been calculated on the basis of the estimated tax rate for the twelve months ending 31 March 2003. 2. Non statutory accounts These statements do not constitute statutory financial statements within the meaning of Section 240 of the Companies Act 1985. The comparative figures for the year ended 31 March 2002 are an abridged statement of the full financial statements for that period which have been delivered to the Registrar of Companies and on which the auditors made an unqualified report. No financial statements will be filed for the six months ended 30 September 2002. 3. Earnings per share The calculation of earnings per ordinary share is based on the profits after taxation for the period of Â£1,066,000 (six months ended 30 September 2001 - Â£522,000) and the weighted average number of ordinary shares in issue during the period of 7,272,621 (six months ended 30 September 2001 - 7,257,320).The calculation of diluted earnings per ordinary share is based on the weighted average number of ordinary shares in issue as adjusted to assume conversion of all dilutive potential ordinary shares, 7,385,577 (six months ended 30 September 2001 - 7,257,320). 4. Short Term Incentive Plan 46,584 ordinary shares to the value of Â£192,000 were acquired in June 2002 by the Employee Benefit Trust in accordance with the incentive plan, details of which were included in the 2002 Annual Report and Accounts. The Trust waives its right to dividends. 5 Copies of this statement will be sent to all shareholders and are available from the Company's registered office. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Hornby (HRN)

Full Archive

UK 100

Latest directors dealings

All directors dealings today