Hornby confident of Olympics boost

Model railway maker Hornby today insisted the supply chain problems which caused its annual profits to slump by a fifth have been resolved in time to meet an expected boom in demand for London Olympics merchandise.

Profits fell by 21 per cent to £4.1m in the year to March 31, partly due to a lack of products because of the supply problems and also the severe weather at the end of last year, which affected crucial Christmas trade.

The Scalextric-to-Airfix hobby firm admitted there have been shortcomings in its supply chain for a number of years, but said it took on additional staff in Hong Kong and China to sort out the production issues and with new additional suppliers now on stream it does not expect supply problems in the current year.

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Revenues for the year fell by one per cent to £63.4m, but this included very little from the Olympics range which includes taxis at £4.99 each and bigger items such as a model Scalextric Velodrome at £69.99 and a £200 limited edition train set.

Chairman Neil Johnson said the Olympics will have long term benefits in respect of both distribution and product diversification. He added that the current rate of sales was encouraging with a significant portion of business from outside London.

The group also has a new range of model racing cars due for launch based on the forthcoming animated film Cars 2, while it has also won the slot racing rights to the Star Wars franchise, which is currently being converted into a 3D format.

Chief executive Frank Martin added that new licence wins have given the group an “outstanding opportunity to appeal to a new generation of ”hobbyists“ and represents a major opportunity to grow our business”.

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