Hornby profits rise 80 per cent

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Toy manufacturer Hornby has posted an 80 per cent jump in first-half pre-tax profits.

The company said it expected a positive outcome for its full year results as it eyes a boost from the Olympic Games.

The maker of model railways, Scalextric car racing kits and Airfix models reported adjusted pre-tax profit of £10.8m as trading grew by 50 per cent in continental Europe on the back of an improved supply chain.

Sales growth in Britain was more muted at four per cent as the country’s consumers rein in spending as disposable incomes are squeezed by rising prices, muted wage growth and government austerity measures.

The company, which is designing merchandise linked to next year’s Olympic Games in London, said the sporting event would “help to cushion the group against challenges in the wider economic environment”.

Hornby, whose founder invented Meccano construction toys early last century, said first-half revenue rose 11 per cent to £28.4m.

The company kept its half year dividend at 1.7 pence, the same as last year.

Hornby said its operating margins had improved as it sold more model railway products in Europe.

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