REG - Hornby PLC - Half-year Report
24/11/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221124:nRSX3904Ha&default-theme=true
RNS Number : 3904H Hornby PLC 24 November 2022
24 November 2022
HORNBY ANNOUNCES INTERIM RESULTS
Hornby Plc ("Hornby"), the international hobby products Group, today announces
its unaudited interim results for the six months ended 30 September 2022.
Interim Results Highlights
· Group revenue of £22.4 million (2021: £21.8 million) an
increase of 3% on prior year
· Underlying Operating Group loss before tax* of £1.5 million
(2021: loss of £0.3 million)
· Statutory loss before taxation for the period of £2.9 million
(2021: loss of £0.7 million)
· Net debt £4.9 million (2021: Net cash £0.2 million)
* Stated before exceptional items, share-based payments, FX and amortisation
of intangibles.
Lyndon Davies, Hornby Executive Chairman, commented:
"Revenues have marginally increased in the first half of a difficult 2022/23
trading period. A year ago, sales in the second half were held back by supply
chain
disruption, but we are now in a stronger position, having taken strategic
decisions to raise stocks to support sales and avoid shortages. As we are
heading into our key Christmas trading period it is hard to predict the
outcome for the full year results, but we are well-placed, with our order book
very strong and higher than it was a year ago."
-ends-
24 November 2022
Enquiries:
Hornby plc
Lyndon Davies, CEO
01843 233 500
Kirstie Gould, CFO
Liberum
Andrew Godber
020 3100 2222
Edward Thomas
Miquela Bezuidenhoudt
Hornby Plc ("Hornby" or "the Group")
INTERIM REPORT FOR THE SIX
MONTHS ENDED 30 SEPTEMBER 2022
CEO Statement
I shall cover the following points:
Supply Chain Update
Digital Update
New Products
New CEO
Outlook
Supply Chain
A year ago, I reported difficulties with our supply chain, as we suffered
shipment delays, shortages in container availability and higher costs. This
resulted in us receiving products from our factories after the Christmas
trading period. The situation has now greatly eased and shipments from our
factories are 40% ahead of last year. We are still suffering with late
departure dates, however, as the shipping industry trims capacity by
cancelling sailings. Despite this, although costs are not back to pre-Covid
levels, container rates continue to fall.
We have also mitigated potential supply disruptions this Christmas by bringing
forward the shipping dates on key product lines, which are already available
in our warehouse.
Digital Update
Direct sales via our website continue to increase, with a year-on-year
increase of more than 50% in the first two quarters of 2022/23. I expect this
increase to continue into the second half of our financial year.
Q1 Q2 Q3 Q4 Total
2018/19 £301,100 £479,767 £582,434 £362,688 £1,725,988
2019/20 £426,382 £497,494 £731,252 £638,260 £2,293,388
2020/21 £1,222,578 £1,169,936 £1,574,834 £976,711 £4,944,058
2021/22 £849,782 £1,038,172 £2,128,918 £1,687,916 £5,704,787
2022/23 £1,389,736 £1,519,917
New Products
Over the next few years, we are transitioning away from the traditional
announcements of products in the January window. In October we announced that
we were introducing a new scale for model railways, smaller than the
traditional 00 gauge (1:76 scale). This is Hornby TT (1:120 scale), a new
compact scale - perfect for creating your big ideas in a small world.
Development of this new range began in 2019 with many items already in
production it means that shipments to customers will commence in this
financial year.
New CEO
On 15 November 2022, Hornby was pleased to announce that Olly Raeburn had been
appointed as the new CEO of Hornby, joining us 23 January 2023.
Olly became CEO of Paperchase in September 2020, having joined the company as
Chief Marketing Officer in June 2019.
Before joining Paperchase, he enjoyed 7 years in Executive Board level roles
at both Rank PLC and Ladbrokes Coral PLC, having spent the first 20 years of
his career in advertising and marketing agencies, including an 8-year period
as founder of his own agency which was acquired by a communications group.
Since taking over as CEO at Paperchase, Olly has led the business through an
administration and driven the turnaround strategy that culminated in the
successful sale of the business in August 2020. He was responsible for the
overall strategy of the business, with subject matter expertise being brought
to bear in the areas of Brand Marketing, Customer Insights, Design and
Communications.
Previous key appointments:
•Chief Marketing Officer - ExCo, Rank PLC
•Brand Director - ExCo, Ladbrokes Coral PLC
•Marketing Director - ExCo, Gala Coral Group
"I'm enormously excited about the prospect of working in a business with such
a rich British heritage, and an iconic set of brands. It is a wonderful
business with some great opportunities to build upon, across the board, and
I'm really looking forward to setting off on this journey" - Olly Raeburn
Outlook
Our order book is very strong and higher than a year ago. 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. It is over forty years since the UK
last experienced an inflationary shock on the scale we are witnessing today;
and the UK economy of the 1970s - with its reliance on highly subsidised and
geographically concentrated heavy industry - was incomparably different to the
economy of today.
A more comprehensive analysis of the year will be given in the January 2023
trading update.
Financial review
Performance
Group revenue for the six months to September 2022 of £22.4 million was 3%
higher than the prior year (2021: £21.8million). The gross margin for the
period was 48% (2021: 46%), a slight increase reflecting the product/channel
mix in the first half of 2022 compared to prior year.
Underlying overheads increased year-on-year from £10.3 million to £12.5
million, or by 21%, reflecting the inclusion of overheads in our LCD
enterprises subsidiary, which was previously an associate, share based
payments (£532,000 (2021:nil), FX translation of hedged liabilities to spot
(£406,000 (2021: £10,000), an increase in staff in the third-party warehouse
to speed up dispatch times, general inflationary increases and increased focus
on direct selling routes and e-commerce costs.
The operating loss before exceptional costs (including IFRS 16) for the six
months to September 2022 was £2.6 million compared to a loss of £0.3 million
for the same period last year. This is due to the continued high cost of
container, increased overheads as mentioned above and non-cash share-based
payment of £0.5m.
Exceptional costs during the first half year were £0.2 million (2021: £0.2
million) and these comprised of one-off costs relating to the transition of
our Asset Based Lending finance from PNC Credit Limited to Secure Trust Bank
PLC.
Group loss before tax was £2.9 million (2021: loss of £0.7 million). The
basic loss per share was 1.29p (2021: loss per share of 0.45p).
Segmental analysis
Third party revenue for the UK business increased by 7% in the period and
generated a loss before taxation of £2.3 million compared to £0.5 million
loss last year. Revenue for the first half of 2022 has increased slightly
compared with the same period last year due to the increased speed of shipping
goods out of China and into the UK.
The International segment revenue decreased by 8% in the period and generated
an underlying loss of £0.6 million (2021: £0.2 million loss). The decrease
in revenue is a result of capacity constraints at our manufacturing partners.
Balance sheet
Group inventories increased during the period by 36% from £16.5 million at
March 2022 to £22.5 million at September 2022, due to a seasonal build-up of
stocks in the lead-up to the busy Christmas trading period.
Trade & other receivables and Trade & other payables are higher than
the start of the year due to seasonality of the business.
Investment in new tooling, new computer software and other capital expenditure
was £1.9 million (2021: £2.3 million).
Capital structure
There was a decrease in net cash compared to 31 March 2022. The September
period end net debt balance stood at £4.9 million, from £3.8 million of net
cash at the end of the last financial year. This is due to spending on stocks
and tooling ahead of Christmas trading as budgeted.
Going concern
The Group has in place a £12.0 million Asset Based Lending (ABL) facility
with Secure Trust Bank Limited (STB) through to October 2024. The STB
Covenants are customary operational covenants applied on a monthly basis. In
addition, the Group has a committed £9.0 million loan facility with Phoenix
Asset Management Partners Limited (the Group's largest shareholder) if it
should be required which runs through to December 2023. The Group also carries
a Covid Business Interruption Loan (CBIL) liability as a result of the
acquisition of LCD Enterprises Limited on 30 July 2021. Balance at 30
September 2022 is £192,000.
The Group has prepared trading and cash flow forecasts for a period of three
years, which have been reviewed and approved by the Board. On the basis of
these forecasts, and after a detailed review of trading, financial position
and cash flow models (taking COVID-19 within China into account), the
Directors have a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the foreseeable
future. For these reasons, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
REVENUE 4 22,410 21,845 53,739
Cost of Sales (11,683) (11,720) (28,023)
GROSS PROFIT 10,727 10,125 25,716
Distribution costs (3,833) (3,137) (6,991)
Selling and marketing costs (5,003) (4,151) (8,832)
Administrative expenses (4,183) (2,999) (8,514)
Other operating expenses (328) (160) (294)
OPERATING PROFIT/(LOSS) BEFORE EXCEPTIONAL (2,620) (322) 1,085
Exceptional Items 5 (148) (241) (139)
OPERATING PROFIT/(LOSS) (2,768) (563) 946
Finance income 4 10 15
Finance costs (122) (172) (358)
Net finance costs (118) (162) (343)
Share of profit of investments accounted for using the equity method - (20) (20)
PROFIT/(LOSS) BEFORE TAXATION 4 (2,886) (745) 583
Taxation 12 87 - 896
PROFIT/(LOSS) FOR THE PERIOD AFTER TAXATION (2,799) (745) 1,479
OTHER COMPREHENSIVE INCOME/(LOSS)
(Items that may be classified subsequently to profit and loss)
Cash flow hedges, net of tax 793 582 858
Currency translation differences 441 102 175
OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD, NET OF TAX 1,234 684 1,033
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (1,565) (61) 2,512
Comprehensive income attributable to:
Equity holders of the Company (1,544) - 2,500
Non-controlling interests (21) 12
(LOSS)/PROFIT PER ORDINARY SHARE
Basic (1.29)p (0.45)p 0.89p
Diluted (1.29)p (0.45)p 0.85p
All of the activities of the Group are continuing. The notes form an integral
part of this condensed consolidated half-yearly financial information.
BALANCE SHEET
As at 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill 6 4,647 4,562 4,644
Intangible assets 6 3,097 3,211 3,187
Property, plant and equipment 6 10,477 9,602 10,057
Right of Use Lease Asset 7 2,484 2,724 2,584
Deferred income tax assets 3,423 2,956 3,425
24,128 23,055 23,897
CURRENT ASSETS
Inventories 22,548 17,563 16,462
Trade and other receivables 9,154 9,060 8,786
Derivative financial instruments 11 1,808 270 504
Cash and cash equivalents 1,874 1,174 4,139
35,384 28,067 29,891
LIABILITIES
CURRENT LIABILITIES
Borrowings 10 (5,558) (741) (50)
Derivative financial instruments 11 0 (32) 0
Trade and other payables (8,454) (8,576) (7,372)
Lease liabilities 8 (450) (437) (433)
(14,462) (9,786) (7,855)
NET CURRENT ASSETS 20,922 18,281 22,036
NON-CURRENT LIABILITIES
Borrowings 10 (1,252) (192) (277)
Lease liabilities 8 (2,213) (2,427) (2,313)
Deferred tax liabilities (233) (384) (233)
(3,698) (3,003) (2,823)
. .
NET ASSETS 41,352 38,333 43,110
SHAREHOLDERS' EQUITY
Share capital 9 1,698 1,669 1,669
Share premium 52,857 52,857 52,857
Capital redemption reserve 55 55 55
Translation reserve (1,373) (1,887) (1,814)
Hedging reserve 1,356 238 377
Other reserves 1,688 1,688 1,688
Retained earnings (14,920) (16,287) (11,734)
Equity attributable to PLC shareholders 41,361 38,333 43,098
Non-controlling interests (9) - 12
Total equity 41,352 38,333 43,110
The notes form an integral part of this condensed consolidated half-yearly
financial information.
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2022
Capital
Share Share redemption Translation Hedging Other Non-controlling Retained Total
capital premium reserve reserve reserve reserves interests earnings equity
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2022 1,669 52,857 55 (1,814) 377 1,688 12 (11,734) 43,110
Profit for the period - - - - - - (21) (2,778) (2,799)
Other comprehensive income/(loss) for the period - - - 441 979 - - - 1,420
Total comprehensive loss for the period - - - 441 979 - (21) (2,778) (1,379)
Transactions with owners
Share based payments 29 (408) (379)
Total transactions with owners 29 (408) (379)
Balance at 30 September 2022 1,698 52,857 55 (1,373) 1,356 1,688 (9) (14,920) 41,352
Balance at 1 April 2021 1,669 52,857 55 (1,989) (481) 1,688 - (15,542) 38,257
Profit for the period - - - - - - - (745) (745)
Other comprehensive income/(loss) for the period - - - 102 719 - - - 821
Total comprehensive loss for the period - - - 102 719 - - (745) 76
Balance at 30 September 2021 1,669 52,857 55 (1,887) 238 1,688 - (16,287) 38,333
The notes form an integral part of this condensed consolidated half-yearly
financial information.
STATEMENT OF CASH FLOWS
for the six months ended 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash utilised in operations (6,583) (413) 4,862
Interest paid (43) (89) (192)
Tax received - - -
Interest element of lease payments (79) (83) (166)
Net cash utilised in operating activities (6,705) (585) 4,504
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiary net of cash acquired - (1,015) (1,015)
Proceeds from sale of property, plant and equipment - - -
Purchase of property, plant and equipment (1,720) (1,865) (3,551)
Purchase of intangible assets (168) (451) (149)
Interest received 4 10 15
Net cash utilised in investing activities (1,884) (3,321) (4,700)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of ordinary shares 29
Repayment of loan (25) (8) (25)
Proceeds from ABL facility 5,508 691 -
Proceeds from shareholder loan 1,000 110
Payment of lease liability (248) (299) (446)
Net cash generated from financing activities 6,264 384 (361)
Net increase in cash and cash equivalents (2,325) (3,522) (557)
Cash, cash equivalents and bank overdrafts at beginning of period 4,139 4,685 4,685
Effect of exchange rate movements 60 11 11
CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS AT END OF PERIOD 1,874 1,174 4,139
CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS CONSIST OF:
Cash and cash equivalents 1,874 1,174 4,139
CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS AT END OF PERIOD 1,874 1,174 4,139
The notes form an integral part of this condensed consolidated half-yearly
financial information.
NOTE TO THE CASH FLOW STATEMENT
for the six months ended 30 September 2022
Cash flows from operating activities
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit/(Loss) before taxation (2,886) (745) 583
Interest payable 43 89 192
Interest element of lease payments 79 83 166
Interest receivable (4) (10) (15)
Share of profit of associate - 240 20
Disposal of equity interest - - 219
Amortisation of intangible assets 259 268 308
Depreciation 1,311 1,008 2,239
Depreciation on right of use asset 267 239 490
Share-based payments - non-cash 532 - 2,341
Share-based payments - cash (919) - -
(Increase)/decrease in inventories (5,700) (261) 994
(Increase)/decrease in trade and other receivables (199) (1,549) (1,150)
(Decrease)/increase in trade and other payables 634 225 (1,525)
CASH UTILISED IN OPERATIONS (6,583) (413) 4,862
NOTES TO CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL REPORT
1. 1. GENERAL INFORMATION
The Company is a public limited liability company incorporated and domiciled
in the UK. The address of the registered office is Enterprise Road, Westwood
Industrial Estate, Margate, CT9 4JX. The Group is principally engaged in the
development, design, sourcing and distribution of hobby and interactive home
entertainment products.
The Company has its primary listing on the Alternative Investment Market and
is registered in England No. 01547390.
This condensed consolidated half-yearly financial information was approved for
issue on 23 November 2022.
This condensed consolidated half-yearly financial information does not
comprise statutory accounts within the meaning of Section 434 of the Companies
Act 2006 and is unaudited. Statutory accounts for the year ended 31 March 2022
were approved by the Board of Directors on 15 June 2022 and delivered to the
Registrar of Companies. The Report of the Auditors on those accounts was
unqualified and did not contain any statement under Section 498 of the
Companies Act 2006.
Forward Looking Statements
Certain statements in this half-yearly report are forward-looking. Although
the Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements.
We undertake no obligation to update any forward-looking statements whether as
a result of new information, future events or otherwise.
2. BASIS OF PREPARATION
The financial statements are presented in sterling, which is the Parent's
functional currency and the Group's presentation currency. The figures shown
in the financial statements are rounded to the nearest thousand pounds.
This condensed consolidated half-yearly financial information for the
half-year ended 30 September 2022 has been prepared in accordance with IAS 34
'Interim Financial Reporting'. The half-yearly condensed consolidated
financial report should be read in conjunction with the annual financial
statements for the year ended 31 March 2022 which have been prepared in
accordance with UK-adopted international accounting standards. The
consolidated Group financial statements have been prepared on a going concern
basis and under the historical cost convention, as modified by the revaluation
of certain financial assets and liabilities (including derivative instruments)
at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these
estimates are based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those estimates.
3. ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 March 2022, as described in those
annual financial statements with the exception of tax which is accrued using
the tax rate that would be applicable to expected total annual earnings.
Judgements and Estimates
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing this condensed consolidated half-yearly financial report, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 31
March 2022.
Financial Instruments
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk, cash flow interest rate risk and price risk), credit
risk and liquidity risk.
The condensed consolidated half-yearly financial report does not include all
financial risk management information and disclosures required in the annual
financial statements and should be read in conjunction with the Group's annual
financial statements as at 31 March 2022.
There have been no changes in the risk management policies since year end.
The Group's financial instruments, measured at fair value, are all classed as
level 2 in the fair value hierarchy, which is unchanged from 31 March 2022.
Further details of the Group's financial instruments are set out within note
11 of this half-yearly report as required by IFRS 13.
4. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of the
Company that makes strategic decisions.
Operating profit of each reporting segment includes revenue and expenses
directly attributable to or able to be allocated on a reasonable basis.
Segment assets and liabilities are those operating assets and liabilities
directly attributable to or that can be allocated on a reasonable basis.
Management has determined the operating segments based on the reports reviewed
by the Board (chief operating decision-maker) that are used to make strategic
decisions.
The Board considers the business from a geographic perspective.
Geographically, management considers the performance in the UK, USA, Spain,
Italy and rest of Europe. Although these segments do not meet the quantitative
thresholds required by IFRS 8, management has concluded that these segments
should be reported, as it is closely monitored by the chief operating
decision-maker.
Total
UK USA Spain Italy Rest of Europe Intra Group Reportable Segments
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 30 September 2022 (unaudited)
Revenue - External 16,290 2,220 692 1,245 1,963 - 22,410
Inter-segment revenue 1,716 - - - - (1,716) -
Operating (Loss)/Profit (2,355) (393) (69) (53) 102 - (2,768)
Finance income - external 4 - - - - - 4
Finance income - other segments 236 - - - - (236) -
Finance costs - external (122) - - - - - (122)
Finance costs - other segments (87) - (105) (8) (36) (236) -
(Loss)/Profit before taxation (2,324) (393) (174) (61) 66 - (2,886)
Taxation 87 - - - - - 87
Profit/(Loss) after taxation (2,237) (393) (174) (61) 66 - (2,799)
5. EXCEPTIONAL ITEMS
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Exceptional items comprise:
Restructuring costs - (21) (88)
Refinancing (148) - -
Relocation - - (9)
Adjustment on Acquisition - (220) (219)
Amortisation adjustment - - 177
(148) (241) (139)
The exceptional items totalling £148,000 (2021: £241,000) include
refinancing cost for the transition from PNC Credit Management Limited to
Secure Trust Bank PLC.
6. TANGIBLE AND INTANGIBLE ASSETS AND GOODWILL
The additions comprise new product tooling (£1,692,000), property, plant and
equipment (£28,000) and intangible assets - computer software (£168,000).
The Group has again performed impairment reviews as at 30 September 2022 and
consider the carrying value of the assets held to be recoverable. The discount
rates and key assumptions used within the updated models at 30 September 2022
have remained constant with the impairment reviews conducted in March 2022.
Tangible and intangible assets and goodwill (unaudited) Six months ended Six months ended
30 September 2022 30 September 2021
£'000 £'000
Opening net book amount 1 April 2022 and 1 April 2021 17,888 14,258
Exchange adjustment 14 12
Additions 1,888 1,986
Acquired from LCD - 2,394
Depreciation, amortisation and impairment (1,569) (1,275)
Closing net book amount 30 September 2022 and 30 September 2021 18,221 17,375
2022 2021
CAPITAL COMMITMENTS (unaudited) (unaudited)
£'000 £'000
At 30 September commitments were:
Contracted for but not provided for 3,033 1,889
The commitments relate to the acquisition of tooling as part of property,
plant and equipment.
7. RIGHT OF USE ASSETS
GROUP Property Motor Fixtures, Fittings and Equipment Total
Vehicles
£'000
£'000 £'000 £'000
COST
At 1 April 2022 3,726 346 22 4,094
Additions at cost 147 16 4 167
At 30 September 2022 3,873 362 26 4,261
ACCUMULATED DEPRECIATION
At 1 April 2022 1,266 226 18 1,510
Charge 215 49 3 267
At 30 September 2022 1,481 275 21 1,777
Net book amount at 30 September 2022 2,392 87 5 2,484
8. RIGHT OF USE LEASE LIABILITIES
The movement in the right of use lease liabilities over the period was as
follows:
2022
£'000
As at 1 April 2022 2,746
New leases 166
Interest payable 79
Repayment of lease liabilities (328)
As at 30 September 2022 2,663
Lease liability less than one year 450
Lease liability greater than one year and less than five years 613
Lease liability greater than five years 1,600
Total Liability 2,663
Maturity analysis of contracted undiscounted cashflows is as follows:
30 September 2022
£'000
Lease liability less than one year 601
Lease liability greater than one year and less than five years 1,048
Lease liability greater than five years 2,200
Total Liability 3,849
Finance charges included above (1,186)
2,663
9. SHARE CAPITAL
At 30 September 2022 the Group had 169,853,770 ordinary 1p shares in issue
with nominal value £1,698,538 (2021: £1,669,278).
Since 31 March 2022 2,925,932 share options were exercised during the first
half to 30 September 2022 (2021: £nil). One employee share option scheme was
in place between 1 April and 30 September 2022 and is detailed in Note 16.
10. BORROWINGS
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
SECURED BORROWING AT AMORTISED COST
Shareholder Loan (1,110) - (110)
Asset Based Lending facility (5,508) (691) -
Coronavirus Business Interruption Loan (CBIL) (192) (242) (217)
(6,810) (933) (327)
Total borrowings
Amount due for settlement within 12 months (5,558) (741) -
Amount due for settlement after 12 months (1,252) (192) -
(6,810) (933) -
At 30 September 2022 the Group has in place a £12.0 million Asset Based
Lending (ABL) facility with Secure Trust Bank PLC through to October 2024. The
Covenants are customary operational covenants applied on a monthly basis. The
Group also has a CBIL loan with Barclays, acquired as part of the LCD
acquisition. The CBIL payback commenced in August 2021 and finishes July 2026.
In addition, the Group has a committed £9.0 million loan facility with
Phoenix Asset Management Partners Limited (the Group's largest shareholder) if
it should be required. The facility currently expires December 2023.
In the period to 30 September 2022 loan repayments were £25,000 (2021:
£8,334).
11. FINANCIAL INSTRUMENTS
The following tables present the Group's assets and liabilities that are
measured at fair value at 30 September 2022 and 31 March 2022. The table
analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1).
- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level 3).
There were no transfers or reclassifications between levels within the period.
Level 2 hedging derivatives comprise forward foreign exchange contracts and an
interest rate swap and have been fair valued using forward exchange rates that
are quoted in an active market. The fair value of the following financial
assets and liabilities approximate their carrying amount: Trade and other
receivables, other current financial assets, cash and cash equivalents, trade
and other payables and bank overdrafts and borrowings.
Fair values are determined by a process involving discussions between the
Group finance team and the Audit Committee which occur at least once every 6
months in line with the Group's reporting dates.
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Derivatives used for hedging - 1,808 - 1,808
Total assets as at 30 September 2022 - 1,808 - 1,808
Liabilities
Derivatives used for hedging - - - -
Total liabilities at 30 September 2022 - - - -
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Derivatives used for hedging - 504 - 504
Total assets at 31 March 2022 - 504 - 504
Liabilities
Derivatives used for hedging - - - -
Total liabilities at 31 March 2022 - - - -
12. TAXATION
The Group has elected not to recognise a deferred tax movement on the half
year losses at this time and there is no tax credit associated with this in
the profit and loss. There is a small credit associated with a prior year
adjustment on current taxation. The Group has significant brought forward
trading losses which can be utilised.
13. EARNINGS/(LOSS) PER SHARE
Earnings/(loss) per share attributable to equity holders of the Company arises
from continuing operations as follows:
30 September 30 September 31 March
2021 2021 2022
(unaudited) (unaudited) (audited)
Earnings/(loss) per share from continuing operations
attributable to the equity of the Company
- basic (1.67)p (0.45)p 0.89p
- diluted (1.67)p (0.45)p 0.85p
14. DIVIDENDS
No interim dividend has been declared for the interim period ended 30
September 2022 (2021: £nil).
15. CONTINGENT LIABILITIES
The Company and its subsidiary undertakings are, from
time to time, parties to legal proceedings and claims, which arise in the
ordinary course of business. The Directors do not anticipate that the outcome
of these proceedings and claims, either individually or in aggregate, will
have a material adverse effect upon the Group's financial position.
16. PERFORMANCE SHARE PLANS AWARDS
At 30 September 2022, outstanding awards to Directors under the PSP were as
follows:
Director Award date Vesting date Market price at award date At 1 April 2022 Awarded during the year Lapsed during the year As at 30 September 2022
Lyndon Davies Nov 2020 June 2022 54p 2,670,846 (1,682,633) (988,213) -
Kirstie Gould Nov 2020 June 2022 54p 2,670,846 (1,682,633) (988,213) -
17. RELATED-PARTY TRANSACTIONS
Key management compensation amounted to £1,083,000
for the six months to 30 September 2022 (2021: £507,000). Key management
include directors and senior management. For the period to 30 September 2022:
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Salaries and other short-term benefits 528 488 900
Other pension costs 23 19 38
Share-based payments 532 - 2,341
1,083 507 3,279
Phoenix Asset Management Partners who own the majority shareholding in Hornby
PLC have also provided a funding facility to the Group. During the period
non-utilisation fees of £53,733 were accrued and remain unpaid at 30
September
2022.
Hornby Hobbies Limited purchased services totalling £590,435 from Rawnet
Limited which is 100% owned by Phoenix Asset Management, the controlling party
of the Group. At 30 September 2022 £169,281 was owing to Rawnet Limited for
services rendered.
There were no other contracts with the Company or any of its subsidiaries
existing during or at the end of the financial year in which a Director of the
Company or any of its subsidiaries was interested. There are no other
related-party transactions.
18. RISKS AND UNCERTAINTIES
The Board has reviewed the principal risks and uncertainties and have
concluded that the key risks continue to be UK market dependence, market
conditions, exchange rates, supply chain, product compliance and liquidity and
for the foreseeable future Brexit and COVID-19. The disclosures on pages 10
and 11 of the Group's Annual report for the year ended 31 March 2022 provide a
description of each risk along with the associated impact and mitigating
actions. The issues surrounding supply chain, liquidity, and market conditions
are covered in more detail within the interim management report itself. The
Board will continue to focus on risk mitigation plans to address these areas.
19. SEASONALITY
Sales are subject to seasonal fluctuations, with peak demand in the October -
December quarter. For the six months ended 30 September 2022 sales
represented 42 per cent of the annual sales for the year ended 31 March 2022
(2021: 46 per cent of the annual sales for the year ended 31 March 2021).
20. SUBSEQUENT EVENTS
No other significant events have occurred between the end of the reporting
period and the date of signature of the Annual Report and Accounts.
By order of the Board
Lyndon Davies
Kirstie Gould
Chief
Executive
Chief Finance Officer
23 November 2022
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BXBDBDDDDGDXRecent news on Hornby
See all newsREG - Hornby PLC - Directorate Change
AnnouncementREG - Hornby PLC - Trading Statement
AnnouncementREG - Hornby PLC Frasers Group PLC - Holding(s) in Company
AnnouncementREG - Hornby PLC - Mike Ashley and Hornby PLC
AnnouncementREG - Hornby PLC - Hornby PLC Acquires The Corgi Model Club
Announcement