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(Sharecast News) - Shares in model and hobby specialist Hornby were sliding on Wednesday morning, after it reported an increase in revenue but a wider pre-tax loss.
The AIM-traded firm said revenue rose 10% in the six months ended 30 September to £25m, while its statutory pre-tax loss came in at £5.1m, slightly widening from a £4.9m a year earlier.
Its operating loss before exceptionals narrowed to £3.8m from £4.1m, reflecting early benefits from cost-saving measures.
Inventory levels decreased significantly by 18% to £19.8m, aided by the sale of Oxford Diecast, which allowed a sharper focus on core brands like Corgi.
However, net debt rose to £18.9m, up from £14.8m a year earlier.
Operationally, Hornby said it had undertaken significant restructuring to enhance efficiency and reduce costs.
Headcount reductions and central cost savings were expected to deliver annualised savings of £1.5m by 2025.
A new logistics partner in the Midlands was set to replace the current operations in Kent, promising improved service and cost efficiencies in the coming year.
Additionally, a new chief operating officer had been appointed to strengthen logistics, purchasing, and supply chain management.
The company said it was still benefiting from its digital channels, which saw revenue grow 12% year-on-year and 45% compared to 2022.
Since the period ended, Hornby announced the proposed disposal of interests in LCD Enterprises for £1.38m - a move aligned with its strategy of focusing on core operations and generating capital.
"We continue to make good progress with our turnaround strategy," said chief executive officer Olly Raeburn, adding that the first half saw the company make a number of strategic and structural changes.
"These will deliver clear operational efficiencies and significant cost savings.
"Whilst the impact of some of these decisions will not be fully felt until the next financial year, we are firmly focused on right-sizing the business for sustainable growth."
Raeburn said revenue performance compared to last year was "solid".
"We exit the half year with a clear, and aggressive, plan for maintaining that momentum through the critical Black Friday and Christmas trading periods."
At 0837 GMT, shares in Hornby were down 13.08% at 22.6p.
Reporting by Josh White for Sharecast.com.
