Hornby unveils £2.6m Airfix rescue

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The Independent Online

Profit growth at Hornby hit the buffers and went into reverse during the first half as the toy maker became the latest company to blame the World Cup and hot summer for a sales slowdown.

The model train maker released its half-year figures at it announced a £2.6m deal to rescue the Airfix, Humbrol paint and Young Scientist brands out from administration. The group said it planned to move distribution, sales and marketing to Kent while outsourcing manufacture to China.

The group said turnover for the six months to 30 September slipped to £17.9m from £18.4m while pre-tax profits slumped to £1.4m from £2.5m. The figures would have been worse but for the company's international operations in the US, Germany, Italy and France which all performed well.

Frank Martin, the chief executive, said: "In common with many consumer-goods retailers we began to experience slower retail take up during the early summer - particularly during the period of the World Cup.

"These conditions continued during the rest of the summer due, we believe, to the unusually warm weather, which is not conducive to indoor hobby activities."

Bridgewell Securities, the group's broker, said the results made "disappointing reading". But it noted that trading had picked up and described the Airfix acquisition as "well priced". Bridgewell said the company had been a victim of the foreign exchange markets, suffering from the translation of its dollar earnings into sterling and from loans denominated in euros.

Iain Daly, an analyst, noted that exchange rates had since moved back in the Hornby's favour and retained an "overweight" stance on the company's shares ahead of what he expects to be a better second half.