Hornby shares steam ahead as chief executive steps down
Shares at toymaker Hornby have moved full-steam ahead on the announcement that its chief executive is stepping down.
The embattled model railway firm saw its stock value surge 35% after it confirmed Richard Ames was leaving the business with immediate effect.
The company - which commands brands such as Scalextric, Airfix and Corgi - said chairman Roger Canham would take over as executive chairman and lead the group for the "foreseeable future".
The top-level shake-up comes after it warned over mounting losses last week following a "disappointing'' start to the new year which dented its recovery hopes.
The group had said UK trading was far worse than expected in January as its new year promotions failed to boost flagging sales.
It is now expected to post ''substantially'' wider underlying pre-tax losses for the full year, at £5.5 million to £6 million. It also revealed a £1 million write-off in its trading update last week after reviewing its stock and balance sheet.
Hornby said on Wednesday that it was in talks with its lender as the scale of losses could see the firm breach its banking agreements.
The group admitted the new year woes marked a ''substantial setback in our recovery plan'', as it had hoped to turn the corner after a tough few years that have seen the firm beset by troubles.
It suffered major disruption from new computer and stock management systems, while European trading was also impacted by troubles with suppliers in China.
The group saw buoyant trading in the run-up to Christmas, when like-for-like sales rose 17pc throughout November and December, according to Hornby.
But trading since the start of the new year has been in ''stark contrast'', it added.
The Kent-based company said on Wednesday that while UK trading is expected to improve in February and March, sales will still be ''significantly'' behind previous expectations.
In December, Hornby posted half-year losses of £4.5 million in the six months to September 30, up from £500,000 a year earlier.