Hornby 'in great shape' despite supply chain snag

The international hobby products group – which owns a number of model railway and slot car brands, Airfix models, Humbrol paints and Corgi die cast models – said that its largest supplier in China failed to meet Hornby's product supply requirements, mainly as a result of implementing an Enterprise Resource Planning (ERP) system, causing substantial short term disruption to supplies. The company said that although supplies improved during the year, it was not possible to recover the backlog. Hornby chairman Neil Johnson said; "We are very conscious of the fact that shortcomings in our supply chain have held back the Group's progress for a number of years. Our products are complex to manufacture and require specialist skills. Throughout this extended period we have been working closely with our largest supplier and others to improve performance and at the same time to diversify our supply base. We have also engaged additional staff in Hong Kong/China to assist with production planning and to help ensure that our requirements are met. Over recent months our largest supplier has been manufacturing at the level we now require and, with additional suppliers coming on stream we do not expect such supply shortages to constrain sales in the forthcoming financial year." Johnson also blamed unusually harsh December weather for reducing Christmas sales in a year which saw sales dip 1% to £63.4 million (2010: £63.9 million) and pre-tax profits fall to £4.1 million (2010: £5.2 million). However, chief executive Frank Martin (pictured) was upbeat, saying the business was "in great shape" emphasising new product opportunities rather than supply issues. "We are delighted that we have secured the worldwide licence for a range of Star Wars Scalextric products." He also anticipated an encouraging reaction to the company's new range of speeder bikes and X-wing fighters as well as products associated with the new Disney/Pixar movie 'Cars2' and a new children's animated TV series 'Olly the Little White Van' which will soon be launched on ITV and the 2012 London Olympics