It is full steam ahead at Hornby, the hobbies company that has snapped up three iconic brands already and is still on the look-out for more.
Full-year results published yesterday show pre-tax profits up 17 per cent to £9m, sales up 19 per cent to £55.7m, and the dividend up 4.9 per cent at 8.5p. Not only are the once-beleaguered Airfix and Humbrol brands which Hornby bought for a song in 2006 performing beyond expectations, but plans for the relaunch of Corgi, the iconic die-cast model maker bought for £8.3m last month, are also well advanced. If all goes according to plan, Corgi will break even this year with sales of £7m, or around 350,000 units, and will see revenue growth of £4m by 2012.
But there is still room for more, according to Frank Martin, the Hornby chief executive. "We continue to keep a close eye on the market for other brands that could strengthen our portfolio," he said.
Hornby has come a long way since the doldrums of 2000. By outsourcing manufacturing to China and introducing updated product ranges such as the Hogwarts Express for Harry Potter fans, the company turned itself around. It is a strategy that is still working. Some of the biggest sellers last year were Formula One Scalextric sets and digital versions of both the car racing game and the Virgin Trains Pendolino set. Plans for this year include the launch of James Bond-themed products, including Scalextric sets, to coincide with the release of the film Quantum of Solace in the autumn.
It is also the key to the success of Airfix and Humbrol. When Hornby bought the pair of businesses for £2.6m in cash, Humbrol was in administration and Airfix's future was shaky at best. "Since buying Airfix, we have carried out our detailed plan to reinvigorate the business and it is now well and truly back on its feet," Mr Martin said. "We are delighted that it has delivered a performance that is well ahead of our expectations."
But it is not all good news. Hornby revised its profit predictions down slightly last month, blaming supply chain issues and slowing demand in the UK, and while sales rocketed by 37 per cent in the first half of the year, growth slowed to just 7 per cent in the last six months. The shares closed down 2.86 per cent at 170p.Reuse content