Hornby's train sales suffer disruption in bad weather

The Scalextric-to-Airfix hobby company said its sales were disrupted by the weather during its busiest trading period, which in turn limited the need for retail customers to replenish stock during recent weeks.

The company expects profits for the year to March 31 to be below current market forecasts, but said the difficulties were mainly due to one-off factors and that it remained confident in its strategy.

Chairman Neil Johnson added: "We continue to see significant growth potential in many of our markets."

As well as the weather disruption, Hornby's sales in Europe have been hit by shortages of product due to supply chain issues.

These problems are being resolved but sales in Europe failed to recover sufficiently to make up the lost ground, the company added.

Hornby's shares, which have lost nearly 14 per cent over the past three months, closed down 10.55 per cent at 123p last night. The company, whose founder invented Meccano construction toys in the early 1900s, said the lower-than-expected sales resulted in higher inventories at its retail supply chains.

Hornby said the supply chain issues it faced last year were continuing to improve, but sales in Europe would not recover ground lost in the first half.

In November, the company said the fall in its first half pre-tax profit was entirely due to problems at suppliers.

It said it was seeing a pick-up in demand ahead of Christmas, helped by demand for toys based on the film Toy Story 3.

Harsh weather, higher inflation and spending cuts combined to give UK retailers their worst December on record, reinforcing signs that UK growth slowed sharply in the last three months of 2010.

The company, which is designing merchandise associated with the 2012 London Olympics, said lower sales forced its retailers to reduce restocking.