• Text size      
  • Send this article to a friend
  • Print this article

Hornby supply chain woes

Toy firm Hornby is facing a full-year loss after being dogged by lengthy supply chain woes with a major model railway manufacturer in China.

The Margate-based group, whose brands also include Airfix, Scalextric and Corgi, said sales over the crucial Christmas period were "reasonably strong", but that supply issues will hit revenues and profits for the year to March 31.

It has agreed a deal in the last week to cut ties with the Chinese supplier from July, although it said the impact on sales in the current year would wipe out profits at an underlying level while a further currency blow would leave it with losses of £1 million overall.

Shares slumped more than 7% after the warning, which comes after a difficult past few years for Hornby.

The firm was first left with a supply squeeze in 2012 after its then biggest manufacturer shut a factory producing the group's model railways in a year that also saw it suffer slower-than-expected demand for Olympic-themed products.

It has since been broadening its supplier base, moving production to other Chinese firms as well as those in India and bringing some manufacturing back to Britain.

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

207965