TOY firm Hornby said demand for its Olympics merchandise was growing strongly as it looks to bounce back from a slide in UK profits.
The Margate-based group expects sales of London 2012 products, such as model taxis and buses, will offer a short-term boost to profits and offset the impact of weak consumer confidence in all its major markets.
Sales of Scalextric racing cars were the worst hit during the year to March 31 as UK profits fell to £3.4m from £4.5m a year earlier.
Sales were down 4 per cent to £45.5m.
Stronger trading in continental Europe and North America meant overall profits were £4.5m – up slightly on last year’s £4.4m, although the company still cut its dividend from 5p to 3.7p a share.
Hornby has lined up a number of new products for this year as it looks to capitalise on its exposure to mass market retail outlets during the Olympics.
They include ranges with price points of between £2 and £10, starting with a series of collectable pin badges based on the Moshi Monsters online game.
Hornby is also hopeful it can rebuild Scalextric sales, following the recent launch of its Star Wars-based range and the introduction of a number of products celebrating the 50th anniversary of the James Bond franchise.
It also has high expectations for its range of Corgi toys, including a product based on ITV children’s series Olly the Little White Van.
Sales of Hornby model railways were broadly similar to the previous year after the launch of the more competitively priced Flying Scotsman locomotive.
Chief executive Frank Martin said: “Despite the backdrop of a challenging market, Hornby is making encouraging pro- gress.
“Our ability to broaden our product and distribution base will enable us to mitigate to some extent any short term weakness in our traditional hobby sect- ors.”
He added: “There is no doubt that there will continue to be pressure on consumer confidence for some time to come.
“However, we continue to innovate and to seek new commercial opportunities in order to counter the effects of the macro-economic climate in which we are operating.”
Chairman Neil Johnson announced his plans to stand down after a dozen years in the role and will be managing the selection process to find a success- or.