Mike Ashley works his magic at Hornby as sales jump
The impact of Mike Ashley advising Hornby, the international models and collectibles group, has been revealed.
The retail tycoon. whose Frasers Group significantly upped its stake in the Kent-headquartered listed company in February, took up a consultancy role in March.
Hornby, in a trading update to the London Stock Exchange, has revealed that its sales and gross profit increased by 10 per cent in the period from 1 April to 31 August, 2024, compared to the same time in 2023.
However, the company did say that the increase was “slightly behind internal forecasts due to timing issues driven by shipping delays”.
‘Solid progress has been made’ – Mike Ashley-backed Hornby
In the statement, Hornby said: “As is usually the case in our industry; the outcome for the full year is subject to the sales rate in the run up to the key Christmas trading period.
“Our outstanding order book is strong with new products still to be released.
“In addition, D2C invoiced sales are up 11 per cent on prior year and 56 per cent up on the same period in 2022.
“Solid progress has been made on many of the strategic initiatives set out in our most recent annual report and whilst inventory levels remain high on account of planned stock build ahead of peak, total stock holding is seven per cent lower than the same time last year.
“Inventory is expected to unwind further over the key Christmas trading period and our expectations for the full year are unchanged.”
The trading update comes after Hornby welcomed Neil Sachdev as its new non-executive chairman on 9 August.
The company is expected to publish its half-year results in November.
Mike Ashley’s Frasers Group upped its interest in Hornby in February after it significantly increased its stake.
The owner of Sports Direct and House of Fraser acquired more than 11 million shares in the company, taking its total holdings at the time to more than 15 million, or 8.9 per cent.
In March, Hornby made its first acquisition since Frasers Group upped its stake. In the same month, Frasers Group further increased its holdings.
In his consultancy role, Mike Ashley is working with Olly Raeburn “in relation to systems, operations, logistics and, where relevant, broader matters of strategy”.
When Frasers Group announced its further investment in Hornby, shares in the Kent-based company surged. However, its market capitalisation has since fallen back down.
Hornby can trace its roots back to 1901 in Liverpool when founder Frank Hornby received a patent for his Meccano construction toy.