Hornby suffers £1m loss as supply chain problems derailed its results

The group, whose brands include Airfix, Corgi and Scalextric, racked up a loss of £1m for the six months to September 30 as revenues slipped 4.3 per cent on an underlying basis to £22.5m.

The results reflect disruption caused by the closure of a factory by its biggest manufacturer in China, as well as the failure of toy shop Modelzone – a major outlet for Hornby products.

However, chairman Roger Canham said the future for Hornby was looking brighter after it secured 35 concession outlets at WH Smith and Hawkins Bazaar and it took steps to improve the supply chain.

He added: “Trading in the last couple of months has been strong and looking forward to Christmas, we have some exciting products in the market place supported by a strong promotional push.”

The bulk of the company’s products are made by external suppliers in India and China, although there are plans to lift domestic production to around 10 per cent.

It is making a range of Airfix Quickbuild model kits in Sussex and has returned some of its Humbrol paint production back to the UK. Hornby has also been encouraged by the performance of a trial store at the Swindon McArthur Glen outlet close to the National Railway Museum. Andrew Wade, an analyst at Numis Securities, kept his estimate for full-year pre-tax profits of £1.8m unchanged following the results.

He added: “Hornby has an exceptional stable of brands and, as the business transformation progresses, we see scope for clear value creation.”