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Losses mount as shares chug at model train maker Hornby

Kent-based model railway brand Hornby, who are responsible for some the UK’s most cherished toy brands, has warned it is expecting to post a significantly larger loss than originally forecast.

The group, whose headquarters are in Margate, experienced poor sales in the new year which it said will contribute to an estimated underlying loss before tax of up to £6m. That is £3m more than previously expected.

In a statement to the stock exchange this morning, the group blamed poor sales in January and negative year on year revenue growth as the reason behind the significant re-estimation.

The statement also warned that the toy brand’s poor performance would likely see it breach one of its loan covenants with lenders.

Hornby, which manufactures model railway sets and Airfix models, has struggled to revamp its business after issues upgrading its computer and stock management systems last summer.

Richard Ames, Chief Executive of Hornby, expressed his disappointment at the forecasts when he commented: “This has been a real year of change at Hornby. Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish.

“The feedback from customers at the recent International Toy Fairs was encouraging and we are facing the future where, with the right platform, we can build value for our shareholders and drive the Group’s recovery.”

News of the group’s sluggish start to 2016 saw shares in the company plunge by nearly 50% in early trading.

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