April 3, 2018 / 6:57 AM / 2 years ago

Hornby says lender waives financial covenant as sales dip

(Reuters) - Hornby Plc (HRN.L), the British maker of Thomas & Friends model train sets, said on Tuesday its lender, Barclays, has agreed to waive off an earnings covenant as the toymaker continues to grapple with lower sales.

The company, which had decided it would no longer offer large quantities of stock at a discount after a review by new Chief Executive Officer Lyndon Charles Davies, said lack of discounting coupled with late product deliveries continued to hit its sales rate.

However, sales improved towards the close of its financial year as some European products started to arrive, the British toymaker said.

Nonetheless, Hornby said, Barclays has decided to waive off the company’s EBITDA covenant for the quarter ended March. Core earnings were hurt by reduced sales volumes, it added.

Reporting by Rahul B in Bengaluru; Editing by Sunil Nair

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