Interim Results

Hornby PLC 12 November 2004 HORNBY PROFITS UP 20% AS EUROPEAN ACQUISITION BOOSTS SALES Hornby Plc ('Hornby'), the models and collectables Group, has today announced its interim results for the six months to 30 September 2004. Hornby's two main products are model railways and Scalextric slot car racing systems. Highlights â€¢ Pre-tax profits up by 20% to Â£2.6 million (2003: Â£2.2 million) â€¢ Sales up by 20% to Â£19.0 million (2003: Â£15.8 million) â€¢ Diluted earnings per share to 4.55p (2003: 3.91p) â€¢ 121 concession outlets in operation - sales growth of 60% over the last 12 months â€¢ Acquisition of Spanish model rail group Electrotren completed â€¢ Italian court ruling in favour of Lima acquisition â€¢ Successful launch of new Scalextric Digital track system â€¢ New Ferrari Scalextric license agreed â€¢ Interim dividend up 25% to 2.0p (2003: 1.6p) Frank Martin, Chief Executive of Hornby, said, ' We continue to make encouraging progress. The group is now augmenting its organic growth with acquisitions. We have completed the acquisition of Spanish model train specialist Electrotren and we are delighted with how it has bedded down and its subsequent performance. ' We have launched a number of new products which have been well received. Our Scalextric Digital track takes slot-car racing to a new level of authenticity and allows for real-life overtaking manoeuvres. Together with new ranges of both classic and contemporary racing cars, the pipeline of new products is looking good. We are also delighted to have secured a new licensing deal with Ferrari, which we are confident will be well received by the market. ' Our model railway business is also making excellent progress. Live steam is continuing to capture the imagination of a new sector of model-train enthusiasts and we are expanding the range of locomotives featuring this technology. ' Looking to the future, we are optimistic that our products will continue their appeal across a wide range of age groups. We have an exciting product development programme and we are hopeful that subject to our successful detailed due diligence, the acquisition of Lima will be completed before the end of the financial year. We are confident that we will continue to drive the Group's performance forward.' -ends- Date: 12 November 2004 For further information contact: Hornby Plc City Profile Group Frank Martin, Chief Executive Simon Courtenay John Stansfield, Finance Director James Cooper 01843-233500 020-7448-3244 On 12 November: 020-7448-3244 Web: www.hornby.com or: www.scalextric.com CHAIRMAN'S REVIEW The Group continues to make encouraging progress. During the first half of the year sales have again increased for both Hornby and Scalextric brands. I am pleased to report that half-year sales at Â£19.0m were 20% higher than for the same period last year. Profit before tax at Â£2.6m was 20% higher than for the same period last year. Diluted earnings per share rose from 3.91p to 4.55p (adjusted for 5 for 1 share split. See note 3). Dividend Your Board is continuing its policy of paying one third of the previous year's full dividend at the half-year. Consistent with this policy, and given the encouraging trading performance in the first half, I am therefore pleased to announce an interim dividend of 2.0p (2003 - 1.6p) per ordinary share, payable on 28 January 2005 for those shareholders on the register as at 7 January 2005. Operating Review The encouraging performance of the past six months reflects positive developments within the business. On 31 March 2004 we acquired Electrotren S.A., the market leader for model railway products in Spain. We are pleased with the performance of Electrotren and it has bedded down well as part of the Group. This subsidiary therefore contributes to results for the first time at this interim. Group like-for-like sales and profit before tax each increased by 14% in the first half. Sales of Hornby railway products increased again during the first six months, buoyed by an enlarged range of Live Steam locomotives and additional liveries of our Q1 and Class 50 locomotives. During the second half of the current financial year we expect to see strong sales of the retooled A4 locomotive and the new range of 'Teak' coaches. Scalextric sales also increased, supported by the introduction of the MotoGP motorbikes and sets. During the second half of the current financial year we expect to experience strong demand for the newly introduced Scalextric Digital system. I am also delighted to announce that a number of new licences have been agreed which we believe will underpin further growth in Scalextric sales in future financial years. Most notable amongst these licences are the rights to produce Scalextric models based on Ferrari road and competition cars, including Formula 1. Sales growth in the UK during the first half of the year has come from all our channels of distribution. In particular, in-store concessions in the UK have shown impressive sales growth of 60%. Between 30 September 2003 and 30 September 2004, the number of these outlets grew from 70 to 121. Export markets continue to offer significant scope for growth, although some markets, notably North America, have experienced difficult trading conditions during the past six months. Nevertheless International sales have also increased during this period. The Company has continued to benefit from 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 smooth the impact of fluctuations in exchange rates. Forward purchases of Hong Kong Dollars are now sufficient to meet the Company's purchasing requirements beyond the end of the current financial year. The Company's net cash position, Â£0.1m overdraft as at 30 September 2004, has reduced by Â£3.3m compared to the previous year. However this position is after payment for Electrotren of Â£5.3m. The Company therefore continues to demonstrate its ability to generate significant positive cash flow from its operations. Acquisitions The Company continues in its negotiations to acquire certain assets of Lima S.p.A. (In liquidation), and expects to complete this transaction by the end of the current financial year. Current Trading Your Company has again made a strong start in the current financial year and the prospects for the full year remain positive. However, as always, the pre-Christmas trading period is the key part of the year's trading. Improved distribution and exciting new product introductions should ensure continued growth during the second half of the financial year. Neil A Johnson 12 November 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30 September 2004 Six months Six months Year ended to 30 September to 30 September 31 March 2004 2003 2004 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 TURNOVER 18,970 15,793 38,970 Operating costs (16,287) (13,632) (32,607) _______ _______ _______ OPERATING PROFIT 2,683 2,161 6,363 Net interest (payable)/receivable (48) 45 106 _______ _______ _______ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,635 2,206 6,469 Tax on profit on ordinary activities (867) (707) (1,974) _______ _______ _______ PROFIT FOR THE PERIOD 1,768 1,499 4,495 Dividends (729) (577) (2,199) _______ _______ _______ RETAINED PROFIT FOR THE PERIOD 1,039 922 2,296 _______ _______ _______ EARNINGS PER ORDINARY SHARE Basic 4.77p 4.08p 12.20p Diluted 4.55p 3.91p 11.64p Dividend per ordinary share 2.0p 1.6p 6.0p 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 1,768 1,499 4,495 Exchange adjustments offset in reserves 41 (12) (33) _______ _______ _______ TOTAL RECOGNISED GAINS FOR THE PERIOD 1,809 1,487 4,462 ======= ======= ======= CONSOLIDATED BALANCE SHEET as at 30 September 2004 30 September 30 September 31 March 2004 2003 2004 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 FIXED ASSETS Intangible assets 4,016 30 4,017 Tangible assets 4,559 3,502 4,436 _______ _______ _______ 8,575 3,532 8,453 CURRENT ASSETS Stocks 9,398 8,539 7,369 Debtors 11,561 9,573 6,217 Cash at bank and in hand 317 3,148 5,806 _______ _______ _______ 21,276 21,260 19,392 CREDITORS: Amounts falling due within one year (10,811) (8,300) (9,886) _______ _______ _______ NET CURRENT ASSETS 10,465 12,960 9,506 _______ _______ _______ TOTAL ASSETS LESS CURRENT LIABILITIES 19,040 16,492 17,959 CREDITORS: Amounts falling due after more than one year (92) (49) (103) PROVISIONS FOR LIABILITIES AND CHARGES (686) (538) (527) _______ _______ _______ NET ASSETS 18,262 15,905 17,329 ======= ======= ======= CAPITAL AND RESERVES Share capital and reserves 7,726 7,605 7,667 Profit and loss account 10,536 8,300 9,662 _______ _______ _______ EQUITY SHAREHOLDERS' FUNDS 18,262 15,905 17,329 ======= ======= ======= RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 30 September 30 September 31 March 2004 2003 2004 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Profit for the financial period 1,768 1,499 4,495 Dividends (729) (577) (2,199) Exchange profit/(loss) on investment 41 (12) (33) Shares issued 67 33 104 Investments - Short Term Incentive Plan (214) - (224) _______ _______ _______ NET ADDITIONS TO SHAREHOLDERS' FUNDS 933 943 2,143 Opening shareholders' funds 17,329 15,378 15,186 _______ _______ _______ CLOSING SHAREHOLDERS' FUNDS 18,262 16,321 17,329 ======= ======= ======= CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 September 2004 Six months Six months Year ended to 30 September to 30 September 31 March 2004 2003 2004 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Net cash (outflow)/inflow from operating activities (1,609) (1,772) 8,210 Returns on investments and servicing of finance (48) 45 106 Taxation (1,354) (914) (1,864) Capital expenditure and financial investment - purchase of fixed assets (1,107) (546) (1,370) - sale of fixed assets 13 13 27 - purchase of own shares (278) (224) (224) Acquisitions - purchase of subsidiary undertakings - - (5,303) - cash held upon acquisition - - 222 Equity dividends paid (1,612) (1,383) (1,968) _______ _______ _______ Net cash outflow before financing (5,995) (4,781) (2,164) Financing Issue of ordinary shares 67 33 104 Capital element of finance lease payments (16) (7) (26) _______ _______ _______ Decrease in cash in the period (5,944) (4,755) (2,086) ======= ======= ======= RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Â£'000 Â£'000 Â£'000 Decrease in cash in the period (5,944) (4,755) (2,086) Cash outflow from decrease in lease financing 16 7 26 _______ _______ _______ Change in net funds resulting from cash flows (5,928) (4,748) (2,060) New finance leases - (38) (105) New finance leases upon acquisition - - (12) Exchange movements 2 (6) (17) _______ _______ _______ Movement in net funds in the period (5,926) (4,792) (2,194) Net funds at 1 April 2004 5,673 7,867 7,867 _______ _______ _______ Net funds at 30 September 2004 (253) 3,075 5,673 ======= ======= ======= 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 2004 2003 2004 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Operating profit 2,683 2,161 6,363 Depreciation charges 927 679 1,364 Amortisation of goodwill 1 1 3 (Profit)/loss on sale of tangible fixed assets (7) (1) 2 Increase in stocks (2,029) (2,389) (830) Increase in debtors (5,285) (4,351) (401) Increase in creditors 1,942 2,087 1,659 Increase in sales returns provision 159 41 50 _______ _______ _______ Net cash (outflow)/inflow from operating activities (1,609) (1,772) 8,210 ======= ======= ======= GEOGRAPHICAL SEGMENT INFORMATION Six months Six months Year ended to 30 September to 30 September 31 March 2004 2003 2004 (unaudited) (unaudited) (audited) BY ORIGIN Â£'000 Â£'000 Â£'000 TURNOVER United Kingdom 16,643 14,415 36,028 Spain 1,333 - - United States of America 994 1,378 2,942 _______ _______ _______ Group 18,970 15,793 38,970 ======= ======= ======= Â£'000 Â£'000 Â£'000 PROFIT BEFORE TAX United Kingdom 2,385 2,160 6,399 Spain 336 - - United States of America (86) 46 70 _______ _______ _______ Group 2,635 2,206 6,469 ======= ======= ======= Â£'000 Â£'000 Â£'000 NET ASSETS United Kingdom 16,438 15,651 15,762 Spain 1,626 - 1,313 United States of America 198 254 254 _______ _______ _______ Group 18,262 15,905 17,329 ======= ======= ======= BY DESTINATION Â£'000 Â£'000 Â£'000 TURNOVER United Kingdom 13,537 11,517 30,961 Rest of the world 5,433 4,276 8,009 _______ _______ _______ Group 18,970 15,793 38,970 ======= ======= ======= 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 2004. The taxation charge for the six months ended 30 September 2004 has been calculated on the basis of the estimated tax rate for the twelve months ending 31 March 2005. 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 2004 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 2004. 3. Share Split At the 2004 Annual General Meeting an Ordinary Resolution was passed that with effect from close of business on 30 July 2004 each of the issued and unissued ordinary shares of 5p each in the capital of the Company were sub-divided into 5 ordinary shares of 1p each in the capital of the Company having the rights and being subject to the restrictions set out in the Articles of Association of the Company. The prior year earnings per share and dividend per share have been adjusted to reflect the 5 for 1 share split. 4. Earnings per share The calculation of earnings per ordinary share is based on the profits after taxation for the period of Â£1,768,000 (six months ended 30 September 2003 - Â£1,499,000) and the weighted average number of ordinary shares in issue during the period of 37,036,552 (six months ended 30 September 2003 - 36,761,870). 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, 38,860,832 (six months ended 30 September 2003- 38,358,185). 5. Short Term Incentive Plan 129,110 ordinary shares to the value of Â£278,000 were acquired by the Employee Benefit Trust in June 2004 in accordance with the incentive plan, details of which were included in the 2004 Annual Report and Accounts. The Trust waives its right to dividends. 6. Interim Statement 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