Hornby today issued the latest in a long line of profit warnings as historical problems with its biggest Far East supplier continue.
Bosses admitted the toymaker will swing into a £1 million loss next year, revealed sales will be below the £57.4 million made last year and said it would have to write off about £600,000 to finally split from its biggest model railway supplier.
The news sent the shares down 9%. The company, which makes Scalextric cars and Airfix kits, said the problems with the supplier meant that model railway sales will only account for 61% if its budget compared with expectations of 88%.
Problems with over-reliance on one supplier have plagued Hornby for several years and management consistently said it was looking to have a broader supply base.
Bosses admitted the split has taken longer than expected, but that a resolution has finally been achieved that will see its expensive moulds and tools returned so production can continue elsewhere.
Hornby is still counting the cost of its London Olympics debacle, which led to the removal of former chief executive Frank Martin after it wrote off £2 million because no one wanted die-cast figures associated with the Games.
