The model railway company Hornby has seen a 33 per cent increase in revenue in the first half of the year, marking a return to profit for the first time in almost ten years. The company’s uplift arrives following a surge in interest for the Hornby Hobbies products over the UK’s lockdown period.
A rocket in hobby enthusiasts engaging with the Hornby brand over the course of 2020 has seen revenue increase to £21.1 million in the first half of the year, up from £15.9 million in 2019. The Margate-based hobby specialist reported an operating profit of £200,000 after almost a decade of losses.
“Over the last two years Hornby has been gearing up for this current financial year,” Hornby’s CEO, Lyndon Davies told ToyNews. “With more time at home, many have turned to the hobby, and when you do it sparks your interests and can give you a very positive feeling. It also allows you to unwind from the stresses of life, and with all of our hobby brands we have seen plenty of new sales.”
The company made pre-tax profit of £17,000 in the first half of the year, against a £2.5m in the previous year. It marks a promising start for the firm who traditionally sees 55 to 60 per cent of its sales fall in the second half of the year and in the run up to Christmas.
A surge in online sales had a major role to play in the uplift, far outpacing those that it had achieved via the channel in its total 2019-20 financial year.
“We have benefited by online and of course like all companies we like to engage with everyone, which online strategies allow us to do,” said Davies.
It’s not only the increase in interest driven by the coronavirus pandemic and families and fans spending more time at home to engage with hobbies and miniatures like Hornby’s, but through licensing partnerships such as Scalextric versions of Batman and Joker cars, as well as the adoption of new technology in its products, including Bluetooth circuit and accessory controllers.
It marks an evolution for the company who has promised the integration or further technologies with its traditional play patterns and hobbyist themes for the coming years.
“The design process takes its time, licencing is certainly very important to us and we have a lot in the wings, Davies said.
“There is a lot happening at Hornby over the next 12 to 18 months. We are investing in technology which allows the physical and the digital to co-exist. We started with our Sparkplug App for Scalextric and we will shortly release systems that allow our trains to be controlled via Apple and Android devices.”
The chief executive has marked the move back into profitability for the firm as a “significant milestone, especially considering the Covid-19 pandemic overshadowing every move we make.”
The new approach forms what Davies calls his strategy for the “new normal”, which will also focus on Hornby’s online offering with the launch of a new website.
“Hornby has moved into profitability, the growing sales and margins built on the back of the introduction of some fantastic new products, new technology and the changing environment,” Davies said.
“We are heading into our key Christmas trading period and right now it is hard to tell what the outcome will be for the full year results. Our sales continue to be higher than where they were last year, and there is a real energy within the Company for the Christmas season.”