Higher costs impact profitability as revenue grows

  • Hornby’s pretax loss widened in the first half of fiscal 2024
  • Revenue increased by 6%
  • Higher costs associated with business restructure contributed to the loss
  • Direct sales to customers drove the revenue growth
  • Third-party revenue for the U.K. business rose by 4%
  • International segment revenue decreased by 17% due to increased costs of living in European markets
  • Adjusted operating loss widened to GBP4.3 million
  • Overheads rose by 17% due to higher minimum wages, inflationary costs, and changes to senior staff
  • Hornby expects profitability to remain depressed as it restructures the business
  • The company aims to return to profit next year as efficiencies and margins improve
  • Guidance for fiscal 2024 is high single-digit to low double-digit revenue growth

Hornby, the London-listed models and collectibles group, reported a widened pretax loss in the first half of fiscal 2024, despite a slight growth in revenue. The company attributed the increased loss to higher costs associated with its ongoing business restructure. Revenue, on the other hand, saw a 6% increase, driven by direct sales to customers. Third-party revenue for the U.K. business rose by 4%, while the international segment experienced a 17% decrease due to heightened costs of living in European markets. Adjusted operating loss also widened to GBP4.3 million, with overheads rising by 17% as a result of higher minimum wages, inflationary costs, and changes to senior staff within sales and marketing. Hornby expects its profitability to remain depressed as it continues to restructure the business, but aims to return to profit next year as efficiencies and margins improve. The company reaffirmed its guidance of high single-digit to low double-digit revenue growth for fiscal 2024.

Factuality Level: 8
Factuality Justification: The article provides specific financial figures and statements from the company, which can be fact-checked. However, it does not provide any external sources or perspectives to verify the information.
Noise Level: 3
Noise Justification: The article provides relevant information about Hornby’s financial performance in the first half of fiscal 2024. It mentions the increase in revenue, the widening pretax loss, and the reasons behind it, such as higher costs associated with business restructure and overheads. The article also includes information about the company’s expectations for future profitability and revenue growth. However, it lacks in-depth analysis, scientific rigor, and actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: The article provides information on the financial performance of Hornby, a London-listed models and collectibles group. It mentions a widened pretax loss, increased revenue, and higher costs associated with business restructure. This information may impact the company’s stock price and investor sentiment.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article focuses on the financial performance of Hornby and does not mention any extreme events or their impact.
Public Companies: Hornby (N/A)
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