Friday 21st Oct 2016 - Logistics Manager

Supply chain problems still affect Hornby

Hornby’s model rail brands have continued to bear the brunt of supply chain difficulties, the company said in its results for the six months to 30th September.

Last year, the group’s historically largest supplier closed the factory that produced its goods and Hornby sought to reallocate production from that supplier wherever possible.

“While this has inevitably caused further supply chain disruption in the first half of this year that will continue into the second half, it is a necessary step to recovering control over our supply chain for the future, it said.

The company, which also owns the Scalextric and Airfix brands, reported an underlying loss for the first half of £700,000 compared to a loss of £200,000 in the first half of last year. Sales were down from £23.5m to £22.5m. The closure of retailer Modelzone also affected the results.

It said: “European model rail brands are now forecast to achieve around 80 per cent of budgeted production for the year and for the UK 88 per cent. This compares to 70 per cent last year and despite the continuing difficulties does represent progress. The biggest impact internationally has been felt in Italy and the results reflect this.”

Executive chairman Roger Canham said the immediate outlook continued to be dominated by supply constraints as it work through the strategic restructuring of the supplier base.

“We are developing breadth and depth to our new strategic partners to deliver the continuity and consistency of product supply needed to support the recruitment, reinvigoration and retention of our enthusiasts.

“We expect the second half of the current financial year to be much stronger than the first, partially because of the seasonal impact but also because we will start to put behind us the difficulties of the first half. The supply chain should be more reliable and the concession retail channel is being rebuilt successfully.”