Hornby profit warning after it ends discounted sales
Source - SMW
Hornby has decided that to maximise the value of its brands over the long term it would no longer offer for sale large quantities of stock at a discount - although this would have a material impact on profitability.
It said the board's decision followed an initial review of the business by chief executive Lyndon Davies.
In a trading update issued at the annual general meeting on 6 Sep, the board highlighted that the performance in the year to date had been below expectations.
It said this, coupled with the new approach to discounting stock, meant it was now clear that the shortfall was unlikely to be recouped in the current year.
Hornby said said it was expected that revenue would be lower and, consequently, there would be a material impact on profitability in the current financial year.
It said Davies was continuing his review of strategy and would provide a more complete update with the group's half-year results.
The group also said that interim chairman David Adams was stepping down from the board to take up another appointment.
It said a search for an independent non-executive chairman was progressing.