Investing.com -- Shares of Hornby Plc (LON:HRN) jumped over 7% on Wednesday after it reported a strong trading period in its third-quarter update, with sales boosted by strong performance during Black Friday and Christmas.
The international models and collectibles company, reported group sales for the quarter ending December 31, 2024, were up by 7% compared to the same period last year, excluding its recently sold subsidiary LCD Enterprises Limited.
This growth contrasts sharply with a 1.5% decline in UK non-food sales reported by the British Retail Consortium over the same period.
For the financial year to date, Hornby’s group sales are 8% higher than last year, with gross profits showing a 10% increase.
The company’s December figures were particularly strong, with revenues surging 23% and gross profits climbing 38% year-on-year, driven by promotional campaigns and holiday demand.
Almost half of the Black Friday sales came from first-time customers, an increase from 42% in 2023.
Direct-to-consumer sales have also continued to grow steadily, posting a 10% increase compared to last year.
This shift has contributed to improved margins, which rose to 48% for the quarter, up from 44% in the same period of 2023.
The increase reflects the benefits of direct sales channels and stronger full-price sales during the period.
Hornby reported a slight reduction in net debt, which stood at £18.2 million at the end of December, down from £18.8 million three months earlier.
Inventory levels also dropped to £16.6 million, a 23% decline from March 2024, as the company focused on reducing older stock and prioritizing newer product sales.
“Concurrently we are continuing to drive down the inventory levels that had built up in recent years and are delivering our change plans in a steady and sustainable way. Our turnaround is very much on track as we further reduce central costs, focus on our core brands and improve operational processes across the business,” said Olly Raeburn, chief executive at Hornby in a statement.
Going forward, Hornby reiterated its confidence in achieving year-on-year growth for the full financial year ending March 2025.