Final Results

Hornby PLC 13 June 2001 HORNBY DELIVERS STRONG PERFORMANCE AFTER YEAR OF CHANGE Hornby Plc, ('Hornby') the models and collectables Group, has today announced its preliminary results for the year ended 31 March 2001. Hornby's two main products are Hornby model railways and Scalextric slot car racing systems. Highlights * Pre-tax profits (before exceptionals) up 63% to £2.3 million (2000: £1.4 million) * Turnover up 15% to £24.6 million (2000: £21.5 million) * Management team strengthened * Neil Johnson appointed Non-Executive Chairman * Frank Martin appointed Chief Executive * Strong sales growth across the Hornby Railways and Scalextric product ranges * Outsourcing of production to China completed * Final dividend of 10p - Total dividend up 71 % to 12p (2000: 7p) Frank Martin, Chief Executive of Hornby, said, ' We have worked hard this year to improve the entire performance of the business. The growth in sales of both our Hornby railway and Scalextric slot car racing systems has been very encouraging. We have concentrated on developing the quality and detailing of the product, which has been well received by our customers. This has contributed directly to the success of the Company. The product range is rapidly growing in popularity among both adult collectors and enthusiasts. ' The future for Hornby remains buoyant. We now need to build on our current success. We are focusing on maximising our revenue streams through product innovation and the development of international sales. We are excited for the future of the two brands and the new products that we intend to launch that are in advanced stages of development.' -ends- Date: 13 June 2001 For further information contact: Hornby Plc City Profile Group Frank Martin, Chief Executive Simon Courtenay John Stansfield, Finance Director Ed Senior 01843-233500 020-7726-8588 On 13 June: 020-7726-8588 e-mail: sc@profilecomms.co.uk Web: www.hornby.com or: www.scalextric.com CHAIRMAN'S STATEMENT In this, my first Chairman's statement, I am pleased to be able to report significantly improved performance for the year ended 31 March 2001. Turnover increased by 15% and profit, before exceptional items, improved 63% to £2.3 million. Even after accounting for these exceptional costs, profit before tax was up 24% on last year at £1.5 million. I would like to highlight a number of important performance indicators. There has been strong sales growth across the product ranges, and in both Export and UK independent markets for Scalextric sets and Hornby locomotives. The excellent performance of Scalextric USA, Inc. (our wholly-owned USA subsidiary) gives cause for real optimism in a market with enormous potential. New product introductions have attracted acclaim in both Hornby and Scalextric ranges and the completion of our strategy to transfer all production processes to China continues to improve operational performance, quality and modelling detail. This success clearly indicates growing popularity in the crucial market opportunity represented by adult collectors and enthusiasts for both product streams. These product innovations will continue in the coming year. Board Restructuring I should like to thank Peter Newey, the former Executive Chairman, for his work in laying the foundations for last year's excellent performance. Peter left the Company in December to pursue his many external interests. We wish him well. Following Peter's departure the Board took the view that some fundamental changes in management processes were desirable. I was appointed non-executive Chairman and, shortly thereafter, at the beginning of 2001, we were successful in recruiting Frank Martin as our Chief Executive. Frank has an outstanding track record in markets closely related to our own and we are indeed fortunate to have him lead our executive team. Your Board also took the important decision to concentrate on two areas of activity. Firstly to reduce the overheads within the business and secondly, following the conclusion of the non-productive sale/MBO process, to enable the executive directors to focus their energy and skills on running the business. This has led to a number of further changes within the Company. Your Board has been restructured to more appropriately reflect the size and complexity of our business. The Plc Board now comprises two non-executives together with the Chief Executive and Finance Director. A management board meets regularly in Margate to control the day-to-day operation of the business, and comprises the senior executive directors. I would like to take this opportunity to thank all of those who recently stood down from the main Board for their contribution to the business, and particularly to David Robins our legal adviser for many years and a non-executive director since 1999 who, I am pleased to report, will continue his relationship with the Company in the former capacity. Property Review Restructuring the business in this way has also enabled us to reduce costs elsewhere. Our London Headquarters office and showroom have been closed and the lease is to be disposed of. Similarly, having successfully completed the relocation of our production to China, our Hong Kong office was closed in April 2001. Continuing our property review it is hoped that the existing Margate site will be sold for redevelopment allowing the Company to relocate to more suitable premises. The terms of a sale would be subject to various planning applications being successful. Further details will be sent to shareholders in due course. Product Innovation We continue to embrace emerging technology in our product plans. A Hornby CD Rom based programme has been successfully launched and a PC based interactive system for Scalextric is at an advanced stage of development. I believe that there is great potential in these innovations linking, as they do, computer skills with more traditional three-dimensional hobbies and entertainment. Share Buy Back In our interim report, published in November last year, the Board indicated its intention to return funds to shareholders in 2001. This was achieved in part during March when, using the headroom for share purchase available to the Company, we purchased 1.1 million shares in the market (13.2% of the issued stock) at a price of 145p. You will note that the Board is seeking the flexibility to re-purchase up to a similar percentage in the coming year should circumstances be favourable. Dividend Similarly your Board believes that the current trading position and prospects for the Company enables us to announce a final dividend of 10p per share. This brings the total dividend for the year to 12p, an increase of 71% over the previous year (2000 - 7p). The final dividend will be payable on 17 August 2001 to those shareholders on the register as at 27 July 2001. Outlook The past twelve months have seen major changes at Hornby. Perhaps most notable, and a key contributor to success, has been focus and stability linked to the personal endeavour of our loyal and dedicated staff. Your Board believes that there is further opportunity to develop our business organically, through enhanced product innovations, the use of new technologies, and through potential partnership with or acquisition of similar businesses where Hornby's critical skill base could improve operations. Our task now is to build and consolidate our success. We can look forward to an exciting future with two really great brands. Neil Johnson 13 June 2001 UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2001 2001 2000 £'000 £'000 TURNOVER 24,604 21,477 Cost of sales (14,792) (13,870) ___________ ___________ GROSS PROFIT 9,812 7,607 Net operating expenses - exceptional (797) (195) - other (7,601) (6,212) ___________ ___________ (8,398) (6,407) ___________ ___________ OPERATING PROFIT 1,414 1,200 Net interest receivable 81 7 ___________ ___________ PROFIT ON ORDINARY ACTIVITIES 1,495 1,207 BEFORE TAXATION Tax on profit on ordinary activities (520) (398) ___________ ___________ PROFIT ON ORDINARY ACTIVITIES 975 809 AFTER TAXATION Dividends (893) (585) ___________ ___________ RETAINED PROFIT 82 224 FOR THE FINANCIAL YEAR ___________ ___________ ATTRIBUTED TO: The Company (46) (2) Subsidiary undertakings 128 226 ___________ ___________ 82 224 ___________ ___________ EARNINGS PER ORDINARY SHARE Basic 11.74p 9.68p Diluted 11.74p 9.68p Basic before exceptional items 18.46p 11.31p All of the activities of the Group are continuing. STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 MARCH 2001 2001 2000 £'000 £'000 Profit for the financial year 975 809 Exchange adjustments offset in reserves 20 1 ___________ ___________ Total recognised gains for the year 995 810 ___________ ___________ UNAUDITED CONSOLIDATED BALANCE SHEET AT 31 MARCH 2001 2001 2000 £'000 £'000 FIXED ASSETS Intangible assets 38 40 Tangible assets 3,701 4,478 ___________ ___________ 3,739 4,518 ___________ ___________ CURRENT ASSETS Stocks 4,240 6,083 Debtors 4,915 4,944 Cash at bank and in hand 5,212 3,565 ___________ ___________ 14,367 14,592 CREDITORS: Amounts falling due within one year (5,245) (4,660) ___________ ___________ NET CURRENT ASSETS 9,122 9,932 ___________ ___________ TOTAL ASSETS LESS CURRENT LIABILITIES 12,861 14,450 CREDITORS: Amounts falling due after more than one (96) (148) year PROVISIONS FOR LIABILITIES AND CHARGES (762) (806) ___________ ___________ NET ASSETS 12,003 13,496 ___________ ___________ CAPITAL AND RESERVES Called up share capital 363 418 Capital redemption reserve 55 - Share premium account 4,525 4,525 Revaluation reserve 808 825 Other reserves 1,688 1,688 Profit and loss account 4,564 6,040 ___________ ___________ EQUITY SHAREHOLDERS' FUNDS 12,003 13,496 ___________ ___________ UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2001 2001 2000 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 5,162 1,694 Returns on investments and servicing of 81 7 finance Taxation (499) (171) Capital expenditure and financial investment - purchase of fixed (1,034) (964) assets - sale of fixed assets 160 40 ___________ ___________ (874) (924) Acquisitions - (103) Overdraft held upon acquisition - (66) Payment of deferred consideration (26) - ___________ ___________ (26) (169) Equity dividends paid (585) (585) ___________ ___________ Net cash outflow before financing 3,259 (148) Financing Capital element of finance lease payments (23) (59) Purchase of own shares (1,595) - ___________ ___________ Increase/(decrease) in cash in the year 1,641 (207) ___________ ___________ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2001 2000 £'000 £'000 Increase/(decrease) in cash in the year 1,641 (207) Cash outflow from decrease in lease financing 23 59 ___________ ___________ Change in net funds resulting from cash flows 1,664 (148) New finance leases - (59) New finance leases upon acquisition - (13) Exchange movements 6 - ___________ ___________ Movement in net funds in the year 1,670 (220) Net funds at 1 April 2000 3,478 3,698 ___________ ___________ Net funds at 31 March 2001 5,148 3,478 ___________ ___________ NOTES TO THE CASH FLOW STATEMENT NET CASH FLOW FROM OPERATING ACTIVITIES 2001 2000 £'000 £'000 Operating profit 1,414 1,200 Exchange adjustments offset in reserves 12 1 Depreciation charges 1,734 1,363 Amortisation of goodwill 3 2 (Profit) on sale of tangible fixed assets (87) - Decrease in stocks 1,843 125 Decrease/ (increase) in debtors 29 (655) Increase/(decrease) in creditors 133 (353) Increase in sales returns provision 81 11 ___________ ___________ Net cash inflow from operating activities 5,162 1,694 ___________ ___________ SEGMENTAL INFORMATION The directors consider there to be one class of business, being the development, manufacture and distribution of model products. BY ORIGIN Turnover Profit before Tax Net assets 2001 2000 2001 2000 2001 2000 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 22,224 20,747 1,352 1,097 11,714 13,324 United States of America 2,380 730 143 110 289 172 _____ _____ _____ _____ _____ _____ Group 24,604 21,477 1,495 1,207 12,003 13,496 _____ _____ _____ _____ _____ _____ TURNOVER BY DESTINATION 2001 2000 £'000 £'000 United Kingdom 19,159 17,495 Rest of World 5,445 3,982 Group 24,604 21,477 NOTES 1. The basic earnings per share for the year ended 31 March 2001 is based on the profit after taxation of £975,000 (year ended 31 March 2000 - £809,000) and the weighted average number of ordinary shares in issue during the year of 8,306,087 (year ended 31 March 2000 - 8,357,320). The diluted earnings per share is the same as the basic earnings per share as the performance criteria required to exercise options have not been achieved in the year. The calculation of earnings per share before exceptional items is based on the profit before exceptional items (net of taxation) of £1,533,000 (2000 - £ 945,000). It is included as it provides a better understanding of the underlying performance of the Group. Therefore an adjusted earnings per share is presented, as follows: 2001 2000 Earnings Earnings Earnings per share Earnings per share £'000 Pence £'000 pence Earnings per share 975 11.74 809 9.68 Exceptional items: Redundancy and compensation for loss 797 9.60 195 2.33 of office Taxation arising on exceptional items (239) (2.88) (59) (0.70) at 30% (2000 - 30%) _____ _____ _____ _____ Earnings excluding exceptional items 1,533 18.46 945 11.31 and adjusted earnings per share _____ _____ _____ _____ Diluted 11.74 9.68 _____ _____ 2. The proposed dividend will be paid on 17 August 2001 to members on the register as at 27 July 2001. The ex-dividend date will be 25 July 2001. 3. The profit and loss account, statement of group total recognised gains and losses and balance sheet set out above for the year ended 31 March 2001 are not statutory accounts and are abridged and unaudited. Full audited accounts will be filed with the Registrar of Companies in due course. Full audited accounts for the year ended 31 March 2000 containing an unqualified audit report have been filed with the Registrar of Companies. 4. The preliminary financial information has been prepared on the basis of accounting policies set out in the Report & Accounts for the year ended 31 March 2000. 5. This preliminary announcement was approved by the Board on 12 June 2001. 6. Copies of this preliminary announcement are available from J W Stansfield, Finance Director, Hornby Plc, Westwood, Margate, Kent, CT9 4JX.

Companies

Hornby (HRN)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today