Hornby denies knowledge of a bid as its shares steam ahead by 30 per cent

SHARES in Hornby, the model railway and Scalextric company soared 28 per cent yesterday amid stock market rumours that the company may face a takeover bid. The 57p rise to 257.5p, a five-year high, forced the company to make a statement saying it was "not in discussions with any party about a takeover or sale of the company."

Hornby shares were suspended at 11.40am after the early rise in the stock but trading started again in late afternoon.

Hornby has had a chequered past but has been improving more recently. It has withdrawn from the toy and radio control market and has been concentrating more on its core trains and Scalextric businesses which it is aiming more at adult enthusiasts rather than children.

In November it posted a slight fall in profits to pounds 973,000. It has been cutting overheads and improving its manufacturing and sourcing operations. It has enjoyed success with model railway collectors by introducing liveried ranges which include locomotives with the Virgin and GNER colours as well as the Eurostar trains and suburban commuter lines.

In the 1980s Hornby ran into the sidings when it acquired a speedboat manufacturer and expanded into the cut throat toy market. The shares hit a low of 96p in 1995 but have since been recovering under new chairman Peter Newey. Sales of its core trains and Scalextric games and accessories have been selling well.