Hornby faces toy spending squeeze

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Hornby has seen demand for train sets fall as consumers rein back their spending // Hornby has seen demand for train sets fall as consumers rein back their spending
Hornby has seen demand for train sets fall as consumers rein back their spending
Profits at toy firm Hornby will be under pressure on Friday as the consumer spending squeeze hits demand for train sets and Scalextric racing cars.
The group, which also owns the Airfix and Corgi brands, is forecast to report a slight 2% rise in underlying pre-tax profits for the year to March 31 to £4.5 million, echoing a profits warning in January.
After its second disappointing Christmas in as many years, Hornby has vowed to fight back by broadening the price range of its products and expects to benefit from Olympics ranges, such as models of London taxis and buses.
Other new products this year include Scalextric Star Wars products based on the Lucasfilm series of movies and a range of collectable Corgi die cast vehicles aimed at the £1.99 price point.
And the group has a strong international arm, which should offset the tough conditions in the UK.
Margate-based Hornby recently overhauled its supply chain following difficulties in China and has seen a major lift in sales in continental Europe, including Germany.
Despite these factors, shares are around 35% lower than they were a year ago.
Andrew Wade, analyst at brokers 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."
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