Hornby yesterday hailed strong sales of its historic toy brands as the company battles back from supply chain problems and poor demand for 2012 London Olympics merchandise.
The company said sales of its more-affordable Airfix and Corgi ranges had grown year-on-year, but that conditions are expected to remain tough for its eponymous model railways unit and Scalextric brand this year.
It added that the Chinese supplier at the centre of supply-chain disruption last year was now expected to contribute to less than 15 per cent of total production this year, down from 35 per cent last year and 75 per cent at its peak.
Remaining Olympics merchandise has also been discounted and sold after disappointing demand for London 2012 goods – which included model taxis and buses – contributed to a £541,000 loss in the six months to 30 September.
Hornby has taken steps to broaden its portfolio of products to include cheaper items and has been encouraged by the response to ranges showcased at the recent London Toy Fair.
Numis analyst Andrew Wade said: “Encouraged that the supply chain issues and Olympics are now behind us, we believe 2013 will be a year of solid progress for the group.”
However, Wade left his recommendation on the stock at “hold”.