Hornby warns over full-year performance

AIM-listed model train set maker Hornby warned over its full-year performance on Wednesday as trading in the financial year to date has been behind the board's expectations due to increased competition and weaker demand over the summer.

In an update ahead of its annual general meeting, the company highlighted softer market demand over the summer months and increased competition in the important UK independent channel. In addition, as previously indicated, it pointed out that some new product releases have shifted to the second half of the year and there has been a reduction in the amount of promotional activity and discounted stock being offered to the market, which was a feature of the comparative period last year.

Trading this year was expected to be more heavily weighted to the second half due to the timing of the new product releases and significant stock reduction in the first half. While it still has the key Christmas trading period ahead, Hornby cautioned that "there is a risk that the shortfall in performance to date may not be fully recovered over the remainder of the financial year".

At 1040 BST, the shares were down 15% to 27p.