Hornby disappoints with dividend smash

Model maker Hornby, the model and toymaker, has scrapped its dividend following poor interims, saying that its performance in the current financial year will be "approximately break-even'.

For the six months ended September 30th revenues were £27m (2011: £28.3m) producing a pre-tax loss of £0.54m compared with a pre-tax profit of £0.96m in the first half of 2011.

It laid the blame for the poor performance mainly on supply chain disruption at one of its largest suppliers in China. Two other reasons given were disappointing sales of London 2012 merchandise and weak demand, particularly in the UK.

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Net debt as at September 30th 2012 was £6.5m compared to £12.8m as at September 2011. The significant reduction in net debt year-on-year reflects cash generated from a planned programme of working capital reduction.

In view of the difficult trading outlook for the full year, it won't be paying an interim dividend (2011-dividend paid 1.7p), and said that future dividend payments "should be resumed as soon as trading performance allows".

CM