Railway modellers play on while economies falter

Announcing its financial results for the year ended 31 March today (4 June) the group -- which owns a number of model railway and slot car brands, Airfix models, Humbrol paints and Corgi die cast models – said its performance, "demonstrated once again the resilience of our portfolio of hobby-based brands in times of economic uncertainty". Chief executive Frank Martin (pictured) said Hornby had made excellent progress during the year. "Demand for our products has remained robust and we enjoyed a strong finish to the year. Many of our UK retailers have been keen to re-stock after a strong Christmas trading period. "Given the strong cash generation over the year, we have reduced our debt levels significantly. This has also enabled the Group to be able to announce the resumption of a dividend. This is an important step and demonstrates our confidence in the strategy and the financial strength of the business." Looking forward, Martin said it had agreed a number of new exciting licenses including collaboration with Disney/Pixar to produce products associated with the new Toy Story 3 movie and was continuing to introduce more merchandise associated with the London 2012 Olympic Games. Hornby produces most of its products in China and India, via third-party contract manufacturers and in recent years the Group has faced problems in respect of its largest supplier in China. However, in the past year two alternative suppliers of model railway products have been brought on stream, reducing dependence on Hornby's largest supplier and providing more flexibility to increase production volumes if required. Turnover for the year was up 5% to £64.7 million (2009: £61.6 million) while pre-tax profit slipped to £5.2 million (£6.1m) but "in view of the excellent progress that has been made in reducing borrowings" the company announced the reinstatement of a shareholder dividend for the year of 5p a share.