Hornby shares moved higher on Friday after the group's new Chief Executive Officer (CEO) gave a confident and upbeat outlook following a less than impressive set of annual figures for the hobby products maker.

Hit by supply chain issues, revenues dropped 10% from £57.4m to £51.6m, or 2% on a like-for-like basis, while statutory losses widened from £2.5m to £4.4m. On an underlying basis the loss came to £1.1m, compared to earnings of £0.2m in the previous year. Net debt rose from £2.2m to £7.3m.

Confirming the group has performed in line with its expectations since the start of the financial year, CEO Richard Amex said he was "more convinced than ever" that Hornby could build on a more solid supply chain and support customer demand.

He announced his decision to move the UK warehousing and logistics operations to a new site in an effort to improve the distribution and stock management, explaining that would enable it to improve its service.

"Hornby has been through a difficult period," he continued. "Whilst I am under no illusion that there will be challenges ahead, I am confident that I can lead the group successfully during this next phase of our development. It is an important time for Hornby as the business strives to reach its full potential."

The group has ended its long-standing agreement with its main manufacturer in China and increased its manufacturing sites to strengthen its previously troubled supply chain.

"The complex nature of the model manufacturing process and the length of the supply chains involved has meant that the initiatives, started in 2013, have not delivered results in the financial year," the group explained. "However, they have created the foundation upon which improvements in 2014-15 can be built."

Sanlam Securities commented that the new management team have "a big task ahead of them" and said it continued to question "the future growth for niche traditional hobby goods especially with consumers shifting away from high valued hobby items to either lower ticket price items or new technology".

It also noted that while the group's decision to terminate its agreement with its long standing major supplier of model railway products was a positive move in the long-term, it would have an adverse impact in the short-term due to slippage of product supply.

Numis said the results were in line and that progress was being made. It maintained a 'hold' rating on the stock.


Talent Group posted a "disappointing" set of delayed half-year results on Friday, despite showing some improvement on the same period the previous year.

The firm's shares remain suspended from trading on AIM after it became significantly concerned about the sustainability of Talent in its current form, based on its poor performance.

Turnover for the six months ended March 31st dropped to £291,000 from £315,000, but lower sales costs helped to reduce pre-tax losses to £120,000 from £170,000.

"We hope to be in a position to make a further announcement regarding the future of the group in the near future," the company said.

Plenty of projects in the pipeline

The Talent Television business is currently in discussions with various Japanese and Chinese broadcasters regarding re-formatting commissions similar to the one completed for Japanese firm NHK during the period.

"A number of other projects remain in development with UK broadcasters but, as ever, this is a long and protracted progress," the firm explained.

The division is also producing two feature films and has a number of other project that remain in the early stages of development.

Talent Television South has been commissioned to produce four documentaries for the new London Live contract, as well as a series of half-hour factual entertainment programmes for Trace TV.

It added that it continued to take on a variety of corporate work.

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