ERP shakeup de-rails Hornby with £4.5m loss

The shakeup following Hornby’s adoption of an enterprise resource planning (ERP) system caused the company to make £4.5m losses

Hornby has cited the introduction of its new enterprise resource planning (ERP) system as one of the reasons for its recent £4.5m statutory loss.

In the six months ending September 2015, the Hornby group cited a loss in profit and sales with its UK ERP implementation causing “significant disruption to trading in July and August”.

But according to the firm the expansion of the ERP system across Europe is ahead of schedule, which should help to level the business in the coming year.

"We are at an important stage in Hornby's transformation. Our new ERP system is now embedded in the UK operation and, following significant disruption in the first two months, the business is performing well in the important Christmas and New Year period," Richard Ames, Hornby chief executive said.

"We have pulled forward our reorganisation plan for our European operations, which has contributed to further trading disruption but accelerates our overall plan. We are confident these changes will give us the platform from which we can drive our business forward."

Hornby decided to adopt its ERP system towards the end of 2014 to integrate the stock, resources and finances of each of the group’s subsidiaries to make them easier to manage.

The system is based on the Microsoft Dynamix AX platform.

It was integrated with the firm’s existing Red Prairie stock management system, and the firm has seen an increase in UK supply chain delivery year on year. 

Hornby’s revenue grew in the 10% year on year from the period between September 2015 and December 2015, which the firm cited as a good indicator for the future.

The hobbies firm has seen a drop of sales in the UK in recent years, with many blaming a drop in enthusiasm for old-fashioned toys in the digital age.

But Hornby has made signification strides in digital over the last year, recently adding Braintree’s online payments system to its responsive website.

To make the brand more accessible to the digital generation, the hobby brand’s digital team introduced digital products such as a mobile app to remote control Scalextric cars and website blogs for engagement with brands.

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