Traders take profits at Hornby after Airfix deal boosts sales

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The Independent Online

Hornby forecast a better than expected second half yesterday after a pick-up in sales during the autumn continued over the key Christmas period.

But shares in the model train and Scaletrix maker fell 5 per cent to 289.5p as investors took profits in the wake of a 30 per cent rise in the shares since November.

"Order intake and sales for the final quarter from January to March are expected to be above the strong levels experienced last year," the company said, adding that full-year trading was set to meet market expectations.

Growth in European subsidiaries and a first-time contribution from its recently acquired Airfix products business also boosted the results. The maker of Scalextric cars and model trains is expected to report sales of around £50m for the full year to 31 March, up from £44.1m a year ago, with pre-tax profits at £9m.

"The shares had a pretty good run and profit taking plays a role in the share price performance," Iain Daly, an analyst at Bridgewell, said. "And I think there were expectations that the good Christmas trading would lead to upgrades which have not come through."

KBC Peel Hunt said that with Hornby's acquisition of Airfix model planes to further cushion earnings expectations going forward, the shares of the British toy maker justify their premium sector rating, given their specialist nature and high-margin business model.

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