Hornby finds solace in Mr Bond

Apr 1 2008 by Iain Laing, The Journal

MODEL train firm Hornby warned on profits yesterday after supply chain problems and softening UK demand.

The group, which also makes Scalextric model racing car sets, said delays in shipments from the Far East had hit European results, with the UK hampered by a spending slowdown.

Hornby, of Margate in Kent, warned that pre-tax profits for the year to March 31 would be £8.75m to £9m, against market estimates of £9.2m.

Sales would be £56m, up 19% on the previous year, but short of forecasts.

Chairman Neil Johnson said he expected the environment to remain challenging, but the business had a strong pipeline of new products.

Interim pre-tax profits were up 44% to £2.6m, helped by a Scalextric sales boost after the success of Formula One driver Lewis Hamilton. Last year the firm earned £7.7m in pre-tax profits.

It has increased its exposure to Continental Europe in recent years with the acquisition of businesses in Spain, Italy, France and Germany.

Hornby, which also owns the Airfix model-making brand, said recent shipping delays would defer sales to the coming financial year. It hopes for a boost from Scalextric products branded under this autumn’s new James Bond film Quantum of Solace.

Seymour Pierce retail analyst Andrew Wade said: “While the Hornby story is a good one, this is clearly disappointing and is yet another bottom-up indicator that UK consumer spending is on the wane.”