LONDON, JAN 27 - British toy manufacturer Hornby Plc
The manufacturer of model railways, Scalextric and Airfix said growth in sales in the UK was muted in the pre-Christmas period compared to a year earlier, largely due to a drop in sales of Hornby and Scalextric sets - traditionally popular gifts for children at Christmas.
In November the group posted an 80 percent jump in first-half pretax profit and said it expected a boost from the London Olympic Games with sales of merchandise connected to the event.
We recognise that trading conditions in the UK and the rest of Europe will continue to be challenging for the foreseeable future and are likely to continue to constrain sales of our high ticket Hornby and Scalextric items, said Chairman Neil Johnson.
The company therefore expects that pretax profits in respect of the year to March 31 2012 are likely to be below current market expectations, the statement said.
Net debt as at December 31 2011 was 8.5 million pounds compared to 12.8 million pounds at the end of September.
Johnson added the group was investing in a range of products, which were showcased at the London toy fair earlier this week and had already signed distribution agreements, which will help to bolster the company's performance in the future.
New products include a Star Wars Scalextric set, fantasy war games and the firm will branch away from its traditional market for boys with a range of collectable horses for girls in a deal with Reeves International.
Shares in Hornby closed Thursday at 123.5 pence, valuing the business at about 48 million pounds.
(Reporting by Philip Baillie; editing by James Davey)