Model rail firm Hornby insisted its UK business was getting back on track and put faith in a Christmas line-up of toys including a Scalextric set themed on the new James Bond film after a tough first half.
The company, whose brands also include Airfix and Corgi, warned first half group revenues would be lower after trading was impacted by a planned overhaul of its IT systems to manage stock.
UK sales were hit throughout July and August as the IT roll-out also came amid a weak general retail market, while its wider European business has suffered by ongoing supply woes for model railways, according to the group.
Shares fell 3 per cent after the sales warning.
But Hornby said UK sales had already recovered and were set to edge higher in the half-year as it also benefits from better-than-expected manufacturing production of its train and Scalextric sets.
Hornby said: “Trading disruption from the new system implementation was expected and combined with European supply problems this will result in half year group revenue being lower than the prior year.
“However, in line with our expectations for the turnaround of the business, UK revenue at the half year is expected to show modest year on year growth.”
The group said full-year results will be heavily dependent on Christmas trading, as well as the ongoing hit from its IT changes as it extends this across its European business.
“While it is difficult to forecast accurately the full extent of further expected disruption during the ongoing roll out we are confident that the full year financial result will show progress on last year,” it added.
Hornby is gearing up for the key festive season with new toys, such as the Scalextric James Bond Spectre set timed to coincide with the hotly-anticipated release of the new movie starring Daniel Craig next month, as well as a Hornby Silver Jubilee Collection Limited Edition set
Richard Ames, chief executive of Hornby, said: “The group is now looking ahead to the important Christmas trading period.
“Early indications from our customers are positive and we have an exciting pipeline of new products that are being well received.”
Hornby posted its first profit in three years in June after recovering from difficulties after its biggest manufacturer shut a factory producing the group’s model railways, having also suffered slower-than-expected demand for Olympic-themed products in 2012.
Underlying pre-tax profits were £1.6m in the year to the end of March, compared with a £1.1m loss the previous year.