Hobbyists could help Hornby weather consumer slowdown

Profits for the year to end March rose 11% to �7.2m from �6.5m a year ago.

The firm said its acquisitions of Electroten in Spain and some assets of Italy's Lima Group model railway firm would help it expand sales overseas.

At home, Hornby said it was aware consumer spending was slowing but said collectors would continue to buy.

Babyboomer bonus

Its sales in the first two months of the current year were looking healthy, it said, and pointed to its use of digital technology to develop new products, such as the Scalextric Digital System, to keep customers interested.

As well as the Scalextric Digital System, it will add digital controls for its Hornby train sets by next year.

It has also introduced a steam engine range, which produces real steam and has plans for a version of the famous Flying Scotsman steam train.

The group has made excellent progress in its strategy to create a broader base to its hobby activities Frank Martin, Hornby chief executive Check Hornby's shares

Its main customers are now babyboomers rather than small boys.

The company believes there is great potential for expansion in Spain.

It has gained exclusive rights to use images of Formula One racing driver Fernando Alonso and Sete Gibernau, the MotoGP motorbike rider in its Scalextric packaging.

However, trading was tough in the US, where it made a pre-tax loss of $141,000 compared with a pre-tax profit of $128,000 a year ago.

The company also said that restructuring of Lima's operations was likely to depress first-half profits but would not have an impact on full-year results.

Hornby shares fell nearly 2.35% to 207.5p by Friday's close.