Hornby hoping for a Christmas present from Lewis Hamilton

The firm has reported lower profits because of costs related to its recent acquisition of Corgi, and supply problems. The firm made a profit before tax of £1.8m in the six months to the end of September, down from £2.7m the year before, mainly due to a £1.3m increase in overheads related to its takeover of Corgi. You won’t be surprised to hear that the firm’s supply chain stretches back to China. This year the problem is not quality (the year has been filled with awful news for China’s manufacturers in this respect) but the way in which soaring costs caused a bitter argument over fees.

Now Hornby is banking on the fact that the ‘hobby’ sector should hold up well during the economic downturn, as opposed to the regular ‘retail’ markets that are looking very ugly this year. The Hornby chief executive is quoted as saying, “…. the hobby sector has distinctive defensive characteristics, which will help us in a more difficult economic environment.”

What do you suppose those ‘defensive characteristics’ might be?

It’s also looking like Hornby sales of its McLaren Scalextric racing cars will get a boost after Lewis Hamilton won the Formula 1 championship, and the firm is also planning an Airfix model kit to cash in on the star driver’s success. A new Scalextric set is also out, based on the new James Bond movie, Quantum of Solace.