Hornby warning as sales lose steam

Model trains firm Hornby yesterday warned that its profts were behind schedule after the UK's big freeze affected railways big and small.

The hobby group, also behind the Scalextric and Airfix brands, 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.

It expects profits for the year to 31 March to be below current market forecasts but said the difficulties were mainly a result of to one-off factors and that it remained confident in its strategy.

Chairman Neil Johnson said: "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 because of supply chain difficutlies.

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

Brokerage Numis Securities lowered its forecast for profits this year to 4.6 million from 6.4m but left its estimate for the following year unchanged at 7.8m. It noted the comments that the sales disruption was a one-off and said the company stood to benefit from demand for Olympics merchandise.

Analyst Andrew Wade added: "Despite a tough Christmas period, we remain positive on the strong product pipeline and impressive quality of brands."