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Hornby in talks re financing facility, sales and profits drop
AIM-listed model train set maker Hornby said on Tuesday that it is in the final stages of discussions with its lender about a new financing facility.
In its fourth-quarter trading update, the company said it expects to have the facilities in place ahead of its full-year results in mid-June. It also said that Barclays has agreed to support the group with a waiver in relation to its EBITDA covenant in respect of the quarter to the end of March 2018.
As reported back in January, Hornby's decision to stop discounting, along with the late deliveries of product, has continued to affects it sales rate. Although there was some improvement in sales towards the end of the financial year as some of the European product began to arrive, group sales and profits were lower than last year.
Interim chairman and chief executive officer Lyndon Davies said: "As the dust settles on the changes to the strategy and we start to put together the line plans for 2019 and beyond, morale is starting to build in our hardworking staff and some trust is coming back with our retailers and customers; both in the UK and abroad.
"Whilst we have managed to make a lot of progress in the first few months, there is still much more to do in terms of reducing costs, streamlining processes and adding routes to market."
The company, which said it continues to implement its strategy "to support the long-term value of the brands" rather than use of discounting to drive short-term sales, had a net cash position of around £4m at year end.
At 0940 BST, the shares were down 6% to 23.03p.