Hornby, the model trains and Scalextric group, issued its second profits warning of the year yesterday, as it said a return to profitability in its international business had not been enough to counter continued tough trading in the UK.
It said pre-tax profits for the year which ended last month are now likely to come in at "not less than £4.5m". Following January's profit warning, analysts had pencilled in profits of £5m for the year against the £4.1m it made in the year to March 2011.
Neil Johnson, Hornby's chairman, said: "The results for the year reflect the impact of a weak retail environment in the UK.
"However, the performance of our international business continues to improve and our London 2012 Games range of merchandise is proving to be increasingly popular."