Full-year results show that the group generated a pre-tax profit of £300,000 compared with a £3.4 million loss a year earlier.
The company has struggled with a series of crises in recent years but appears to have turned a corner as the pandemic saw thousands of hobby enthusiasts turn to model trains and sets during lockdowns.
Chief executive Lyndon Davies said: “In a year overshadowed by the global pandemic and the consequences of Brexit, our employees have restored pride and profitability to the company. Frank Hornby would be proud of his legacy.
“We are all excited by the prospects for Hornby; we are heading in the right direction and the engine at the heart of the business is now firing on all cylinders.
“Our world-renowned iconic brands have a fantastic pipeline of new products for the future.”
Chairman John Stansfield said: “Despite the many challenges to the company caused by Covid-19 the old adage that people turn to hobbies in times of recession proved correct and sales increased across almost all channels and brands except concessions that were closed due to lockdowns for the majority of the year.”
He added: “The new product development cycle is now established and we have already started work on the development of 2023 product ranges.
“We have continued to develop opportunities in existing ranges to incorporate technology such as wireless vehicle control from a smartphone in both Hornby and Scalextric.”
Total sales hit £48.5m in the 12 months to the end of March, up 28 per cent on a year earlier, helped by improved online availability.
Supply chain disruptions from the Far East have largely been avoided with the majority of orders arriving safely, although the company did experience delays earlier this year due to import issues related to Brexit.
Hornby stopped shipments to the EU in late 2020 over Brexit uncertainty relating to paperwork and logistics, although it has resumed in recent weeks, the company added.