Hornby revs up for digital Christmas

Hornby, the model train and racing car group, is pinning its festive hopes on a new Scalextric track system that takes the slot-car favourite into the digital age.

The company hopes to sell more than 15,000 of its new Sport Digital version of the slot-car racing game by Christmas.

Frank Martin, the chief executive, said the new version was the first technological breakthrough for Scalextric since it was launched in the 1950s. "It takes slot-car racing to a new level of authenticity and allows for real-life overtaking manoeuvres," he said.

Mr Martin is hoping the Scalextric Digital track game will compensate for what he warned would be a "late Christmas". Retailers are afraid that customers will put off buying any presents until the last minute this year because Christmas falls on a Saturday.

Mr Martin said: "We are feeling very confident about Christmas. We have got better distribution ... and we are supporting our interesting new products with television advertising." But he added: "December will be incredibly important for us. Possibly more so than previous years."

Hornby is spending £1.5m advertising its new digital racing game, which will cost about £150. It is an improvement on the existing version because each track can take six cars, rather than two, and players will be able to change lanes at the push of a button on their handsets.

The group reported a 20 per cent jump in interim pre-tax profits yesterday to £2.6m on sales of £19m, up from £15.8m. Its sales via concessions in other retailers surged 60 per cent, Mr Martin said.

He hopes that a new Ferrari licensing deal with Mattel will fuel growth next year. Under the agreement, Hornby will be allowed to produce Scalextric models based on Ferrari road and competition cars, including Formula 1. The new cars will not be in the shops until September.

The group said sales of Hornby railway products were buoyed by its "Live Steam" locomotives, popular among model railway collectors. It has introduced a new range of teak coaches, it added.

The company hopes to close its deal to acquire its bankrupt Italian rival, Lima, by the end of its current financial year. After buying its Spanish competitor, Electrotren, in March, Mr Martin said: "If we can replicate our UK success in Spain and Italy, it is likely that we will be interested in some more acquisitions in Europe in due course."

The sole weak spot of its results were its exports to North America, which suffered from "difficult trading conditions".