Supply chain fix stands Hornby ‘in good stead’

Hornby – whose brands include Scalextric, Airfix, Humbrol and Corgi – reported in a trading update that report that, driven by high consumer demand for its products, retailers' willingness to buy-in stock improved significantly in the pre-Christmas period, resulting in a high level of shipments. And with good consumer sell-through, the retailers ended the year with stocks at historically low levels. Demand had continued to be good in the early weeks of January and a correspondingly high level of order intake was being experienced, said Hornby. Chairman, Neil Johnson said the strong Christma and early January sales meant that the group had entered 2010 in a strong position and should ensure a positive final quarter to the financial year as retailers replenished their stocks. He went on: " The progress that has been made in resolving the previous supply chain issues, coupled with a more favourable dollar/sterling exchange rate will stand the company in good stead during the next financial year. We are excited about the future prospects for the company and I look forward to updating investors on future progress. " Hornby said the positive contribution and growth potential of its European businesses had provided welcome support during the economic downturn. Increased overall exposure to Euro denominated markets has helped it to mitigate the effects of the weakness of sterling against the US dollar, the currency in which most of the company's purchases are made. On its once much troubled China supply chain, Hornby said it was pleased to report continuing improvements in reliability and significant capacity and volume increases. The diversification of the supply base to reduce our overall exposure to an individual major supplier meant it could look forward with renewed confidence in respect of its ability to service growing demand, particularly in Continental Europe. On the product front, Scalextric product associated with BBC's Top Gear, Disney/Pixar's Cars and the Formula 1 Grand Prix teams had been among the best sellers. For 2010 Hornby has secured licences with Disney/Pixar for the Hornby and Micro Scalextric brands inspired by the forthcoming Summer 2010 release of Toy Story 3. The first products in the range associated with the London 2012 Olympic Games had also been launched to positive market feedback and the complete range of Olympic merchandise would be released in the run up to the Games.