Hornby tanks after profit warning

Hornby shares tanked on Tuesday after the model train set maker warned that it expects to post a "modest" underlying full-year loss.

The company said sales for the third quarter covering the key Christmas period were ahead of the same period last year. Cumulative group sales for the financial year to date are ahead of last year by 6%.

This has been driven by better availability of stock, price increases, and investment in e-commerce platforms and digital media, Hornby said. However, it also conceded that these sales figures are "behind budget due to the challenging consumer economic climate" and will impact full-year figures.

Hornby said it remains "cautious" in its outlook for the full year and beyond, citing uncertainty around the impact of factors such as inflation and mortgage costs for consumers. Still, "with employment expected to remain high we are hopeful that the confidence in consumer spending remains," it said.

At 0950 GMT, the shares were down 18% at 23.90p.