Toy firm Hornby vowed to deliver an improvement in its performance today after racking up losses of £1.2 million during the last financial year.

The Margate-based group, whose brands also include Airfix, Scalextric and Corgi, said the deficit for the year to the end of last month will be £200,000 more than expected because of foreign exchange losses.

The company's troubles stem from supply chain woes involving a major model railway manufacturer in China, but with those ties due to be cut from July it expects a "gradual improvement" in its reliability and quality this year.