Despite these fairly anaemic full-year results from toy maker Hornby, the group's shares still headed skywards following confirmation that the company had secured the worldwide licence for Star Wars Scalextric products.
The tie-up with the potentially lucrative Star Wars franchise provides a timely boost for the company, following a year in which persistent supply delays and heavy UK snow in the run-up to Christmas hit profits and pushed up year-end inventories. Specifically, Hornby struggled to secure adequate stocks of its higher-margin model-railway products from its contract manufacturers in China, which resulted in a 2.8 percentage point contraction in gross margins to 46.2 per cent. Such supply problems had a particularly marked effect on sales at its European operations. While weather disruption at Christmas cut sales growth at Hornby’s UK unit from 12 per cent at the half-year, to just 4 per cent by the year-end - especially grim news given that the UK generates around 75 per cent of group sales. Still, sales of Hornby's Olympic-related merchandise are building, while production volumes at its main Chinese supplier have met demand since March.
Numis Securities anticipates pre-tax profit of £7.4m for 2012, giving EPS of 13.8p (2011: £4.4m/8.1p).
| HORNBY (HRN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 130p | MARKET VALUE: | £49m | |
| TOUCH: | 125-132p | 12-MONTH HIGH: | 175p | LOW: 103p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 17% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 46.8 | 7.66 | 14.6 | 8.1 |
| 2008 | 55.7 | 9.02 | 16.2 | 8.5 |
| 2009 | 61.6 | 6.12 | 11.2 | 2.7 |
| 2010 | 63.9 | 5.22 | 9.76 | 5.0 |
| 2011 | 63.4 | 4.13 | 7.50 | 5.0 |
| % change | -1 | -21 | -23 | - |
Ex-div:13 Jul Payment:19 Aug *Includes intangible assets of £18.2m, or 48p a share | ||||
