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Hornby On Its Knees with a Begging Bowl.

Hornby HRN has been forced to go to its shareholders cap in one hand and begging bowl in the other and ask them for a measly £8,000,000 for working capital and other essential items which will, they hope, help keep it afloat. The share price has justifiably nose dived from 109p last August to yesterdays 31p and the offer price of the proposed new shares is at a 15% discount to that. Things at one of the UK’s best known brands with a globally recognised name, are so bad that in March, Barclays waived its covenant test. February’s profit warning was the last straw after years of mismanagement and an endless list of excuses, at last brought home to the company that the end was night and the company was on its knees.

Today’s results show that 2015 was yet another disastrous year with revenue to 31st March down by 4% and last years profit of £1.6m turned into an underlying loss of £5.7m or on a reported basis,even worse, with a loss of £13.5m compared to £0.2m.

Steven Cook the CEO has the grace to admit that it was a difficult and disappointing year but then trots out the same pathetic excuse which the company has relied on for years – it faced, he says, “significant challenges”. For gods sake, man, that is what management and the Board is supposed to be there for – to face and overcome challenges. If it cant do it, then they should depart.

But fear not, all will be well. After months of deliberation, the company has at last produced a turn round plan.

Debenhams DEB saw like for like sales for the 15 weeks to 11th June fall by 0.2% or 1.6% if you prefer your results on a constant currency basis. Online sales provided an exception with growth of 7% but the international division’s performance remained mixed. Volatility in the trading environment is blamed for the lack of success, as is a weaker trading environment in the second half. Presumably it will decide which is the correct one to blame when it has a bit more of the second half under its belt. The departing CEO, says that its strategy remains unchanged and apparently regards this as a good thing.  We shall see in due course


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