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Last Updated: Friday, 1 June 2007, 19:10 GMT 20:10 UK
Airfix set to boost Hornby sales
Hornby 'Live Steam Mallard" model train
The World Cup last summer was not conducive to indoor hobbies
Toymaker Hornby has said it is upbeat about prospects for the year ahead, expecting a "significant contribution" from sales of the iconic Airfix brand.

The Kent-based firm bought the Airfix model kit brand, famous for its detailed reproductions of World War II planes, last November.

Its comments came as it unveiled annual profits of 8.1m for the year to March, which was below analysts' expectations.

Strong sales in recent months helped to offset a slow start to the year.

The company has previously said last year's World Cup and a hot summer was not conducive to indoor hobbies and hurt sales in the first half of the year.

But in the final six months, which included the Christmas season, trading in the UK recovered with strong demand for the Scalextric and Hornby digital control systems.

'Over-optimistic'

Despite the late pick-up, the profit figure of 8.1m was below analysts' expectations of nearer 9m.

As a result, shares in the group closed 11.5 pence, or 4%, lower at 274.5p on the London market on Friday.

Richard Ratner, an analyst at Seymour Pierce, said that he had been "over-optimistic, both in terms of sales and profits".

Like the company, he also expected the major driver of growth in the UK this year to come from sales of Airfix products.

As part of its revival, Hornby has been buying up model railway firms across Europe.

Most recently, Hornby expanded into the German railway model market - the biggest in Europe - through its purchase of Heico Modell as part of a wider strategy not to rely so much on the UK arm of the business.

A massive shift of production from Margate to China is also helping the firm to reduce costs and increase profits.


SEE ALSO
Hornby snaps up Airfix for 2.6m
10 Nov 06 |  Business
Hornby signals German expansion
01 Sep 06 |  Business
Sticky future for kitmaker Airfix
31 Aug 06 |  Business

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