MARKET WATCH

TOY maker Hornby, famous for its train sets and Scalextric, will reveal this week that it is still struggling up a steep gradient of consumer unease following its profits warning in January after a second poor Christmas on the trot.

Hornby said in a pre-close update in April that trading in the final quarter of its financial year “remained muted”.

The firm forecast an underlying pre-tax profit of £4.2 million, which would be up just 2 per cent on the previous year.

Hornby, whose other brands include Airfix, said at the time of the profits warning that shoppers were buying fewer high-priced toys in the run-up to Christmas.

More positively, Hornby will confirm at its results on Friday that its international business is trading strongly and that it is benefiting from spin-off products related to the London Olympics, including models of taxis and buses.

Andrew Wade, an analyst at brokerage Numis Securities, said: “Hornby has seen the tough macro-environment impact its trading since Christmas which has been characterised by muted demand and, most significantly, more cautious ordering patterns by retailers who are rebuilding stock levels more slowly.”

Hornby recently overhauled its supply chain following difficulties in China.

Meanwhile, an ongoing shift to greener technologies will help boost profits at chemicals giant Johnson Matthey in its full-year results on Thursday.

The group – which employs 9,000 people and has operations in Edinburgh, Reading and Swindon – specialises in catalysts, precious metals and fine chemicals.

Johnson is forecast to report a 20 per cent rise in underlying pre-tax profits to £411.4m despite a slide in silver and platinum prices in 2011.