Hornby PLC (LSE:HRN) shares dropped around 14% in Tuesday’s early deals as the hobby and collectables retailer told investors it expects to report a “modest underlying loss” for its financial year.
Whilst highlighting group sales for the third quarter, including Christmas trading ahead of 2021 comparatives, Hornby said in a statement it is cautious for the full year and beyond.
Group sales were up 6% for the nine months to the end of December 2022, Hornby said, whilst acknowledging that at this level they remain “behind budget” due to the challenging consumer economic climate and will impact full-year figures.
With a cautious outlook, it pointed to potential negative impacts on its consumers amidst the cost-of-living crisis, including inflation and higher mortgage costs.
Horny’s net debt rose to £7.6mln from £4.9mln at the end of September. Nonetheless, the retailer described its funding position as "strong" and said it has significant liquidity headroom available against its existing facilities.
Lyndon Davies, Hornby executive chair, meanwhile highlighted the company’s launch of new 2023 product ranges today.
“Sales at Hornby continue to grow with a stream of new products in the pipeline,” he said. “We look forward to the continued growth in direct relationships with our customers."
In London, Horny shares tumbled just over 4p or 14% to change hands at 24.94p in early deals.