Hornby gears up for Olympics merchandise race
Model railway maker Hornby insisted it's ready to meet an expected boom in demand for London Olympics merchandise after resolving the supply chain problems which caused its annual profits to slump by a fifth.
Olympic bid: Hornby's range for the Games will include a £200 limited edition train set
Profits fell by 21% to £4.1m in the year to March 31, which were also hit by the severe Christmas weather which slowed crucial trade.
The Scalextric-to-Airfix hobby firm admitted there have been shortcomings in its supply chain for a number of years, but it has taken on additional staff in Hong Kong and China to sort out the production issues.
With new additional suppliers now on stream too it does not expect supply problems in the current year.
Revenues for the year fell by 1% to £63.4m, but this included very little from the Olympics range which includes taxis at £4.99 each and for those who did not get tickets in the lottery bigger items such as a model Scalextric Velodrome at £69.99 and a £200 limited edition train set.
Chairman Neil Johnson said the Olympics will have long term benefits in respect of both distribution and product diversification.
He added that the current rate of sales was encouraging with a significant portion of business from outside London.
The group also has a new range of model racing cars due for launch based on the forthcoming animated film Cars 2, while it has also won the slot racing rights to the Star Wars franchise, which is currently being converted into a 3D format.
Chief executive Frank Martin added that new licence wins have given the group an 'outstanding opportunity to appeal to a new generation of 'hobbyists' and represents a major opportunity to grow our business'.
Hornby's shares were up 11p (9.2%) to 130p in early trading.
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