Hornby Chairman Neil Johnson said today at the company's annual meeting, that the company have taken positive steps to improve their supply chain performance, which last year constrained their sales of model railway products in Europe.
Hornby have agreed to revise their purchasing agreement with their principal Chinese supplier which will increase the purchasing costs in the current financial year by up to US$2M.
Hornby will spread this new cost over time but it is likely that this will only partially be achieved by the end of the current financial year.
Hornby's recent strategy has been to diversify and strengthen the Group's supply and revenue streams. The acquisition of the Airfix and Humbrol brands in November 2006 has proved to be successful and the acquisition of Corgi in April 2008, is proceeding according to plan. Hornby expect this business to be earnings neutral in the current year, and earnings positive thereafter.
The Scalextric brand has done well for Hornby with tie-ins to the forthcoming Bond film and deals with McLaren giving slotcar racing fans access to Lewis Hamilton cars.
Lets hope that the prices don't go up too much and that the quality remains the same.