Hornby results reveal company is back on track

In a trading statement, Hornby noted that sales of its products continued to show gains and pointed out particular improvements in the Hornby and Scalextric ranges compared to last year. The company faced major challenges over the past year including weak consumer demand, adverse foreign exchange rates and a fragile supply chain. Today Hornby highlighted the improvements in the reliability of its supply chain as a major factor in a successful year end, and said that it continued to "keep a close focus on the relationship" with its principal supplier in China. Both parties were benefitting from significant capacity and volume increases and Hornby's strategy to diversify its supply base has reduced exposure to an individual major supplier. With good consumer sell through, the company had also ended the year with low inventories, both in its business and at the retail/distributor level, another improvement over 2009. Positive about future sales, Hornby pinpointed developments in its European hobby business as offering substantial growth opportunities and strong demand for model railway products. Indeed, demand from mainland Europe was being met with improvements in the supply chain. Chairman Neil Johnson said: "We have much improved visibility and control over the supply chain, retailers are hungry for our products and we have secured the bulk of our currency requirements for the year to 31 March 2011 at favourable rates." On the product front Hornby secured the worldwide exclusive licence with the Mercedes GP Formula One racing team for its Scalextric slot car range and is also expecting good returns from the early releases of merchandise based on the London 2012 Olympic Games. Model plane-maker Airfix sales were also up as a result of product development investments, in particular new packaging designs.