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Model railway giant Hornby, based in Margate, cuts its losses as revenues grow

Iconic model railway brand Hornby says it is back on track as revenues gathered steam, according to half-year financial figures for 2019.

But despite the improvements, it still posted a pre-tax loss of £2.5million for the six months ending September 30.

Hornby is based in Margate
Hornby is based in Margate

The company, based in Margate, has found itself facing a host of financial hurdles in recent years but a revamp of its strategy and new management has seen its losses shrink.

Revenues increased 15% on the previous year to £15.9m, with losses shrinking to £2.5m, before tax, compared to £3.2m in 2018.

Lyndon Davies, Hornby chief executive, said: "Revenue is growing, losses are narrowing and we are shifting gears in our journey back to profitability and beyond".

It says the turnaround was helped by "pulling the handbrake on discounting" which has led to "trust returning" and "previous customers re-engaging".

The company, best known for its model railway kits, also owns the Scalextric brand.

Hornby is best known for its model trains and railways
Hornby is best known for its model trains and railways

However, the company warned itself against "patting ourselves on the back" as it was "still not standing on a platform of profitability".

The CEO told investors: "I believe the path we are travelling is correct and all our efforts are now on moving towards profitability and beyond.

"We have fixed the engine which is now purring nicely. Product development is staffed by a great mix of experienced and enthusiastic professionals and we are getting product to market when we want it. The thinking now is about tuning the engine and ideally adding a couple of superchargers."

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