Far East manufacturing delays slow Hornby

The impact of these delays had led to a shortfall in sales in Europe compared to expectations, it said, although sales would still be significantly ahead of the prior year. The effect of this will be to defer sales of these new products into the financial year ending 31 March 2009. Hornby said it had taken steps to ensure that the rate of new product deliveries is improved to meet demand in the new financial year. In the UK, while demand has been above the levels of the previous year, sales slowed in the final weeks of the financial year and, as a result, sales for the year are expected to be around £56 million, 19 per cent ahead of the prior year but short of previous expectations. Pre-tax profit has been impacted and is now expected to be between £8.75 million and £9 million, compared to £7.7 million in the previous year. Looking ahead, Hornby said it was entering the new financial year in good shape with good market opportunities despite the weakening economic background. As a hobby based business, Hornby expected demand for its products to remain resilient. During previous periods of weakness in the economy sales of hobby related products had remained robust, the company said. It had a strong pipeline of new products and is expecting that the launch in the Autumn of the new James Bond film, Quantum of Solace, will be well received and that sales of related slot-car products would be strong. It also envisages growth in demand for its Airfix product ranges. Chairman, Neil Johnson said: "We are pleased with the overall health of our business in this increasingly difficult economic environment. We are confident that our strategy of building a broadly based hobby business will continue to enhance shareholder value. Whilst we expect the economic environment to remain challenging, we are confident that we enter the new financial year with the right platform to continue growing the scale and profitability of the Group.”