Models manufacturer Hornby is expecting to make a loss of £1.2m in a year after a foreign exchange loss of £200,000.

In an update to shareholders, the Margate-based firm said it expects underlying pre-tax levels to break even in the year ending March 31.

The group is now working with its main bankers to negotiate new banking facilities based on its operating plans for the next financial year.

It is expected this will be agreed by June when the time full results for the year to March 31 will be announced.

Net debt is expected to be about £7.3m, compared to £6.5m at the end of December and £2.1m this time last year.

The firm’s new chief executive Richard Ames will join later this month.

Chairman Roger Canham said of the appointment: “He has a wealth of experience of leading consumer facing businesses.

“I was impressed with his track record of implementing successful marketing strategies and managing complex supply chains.

“Finally, I am pleased that he has a genuine passion and enthusiasm for the Hornby business and I am confident that Hornby is in good hands as we move forward.”