26 January 2010 | Helen Gilbert
Improved supply chain management contributed to strong Christmas sales for toy manufacturer Hornby.
The UK hobby products group, whose portfolio includes Scalextric and Airfix, suffered supply chain disruption in China after main vendor Sanda Kan was acquired by Hong Kong toy firm Kader Holdings in January 2009. But in a trading statement yesterday, Hornby reported continuing improvements in the reliability of its supply chain.
It stated: “We have continued to maintain a close focus on the relationship with our principal supplier in China, which is now benefitting from significant capacity and volume increases. At the same time, as reported previously, we have diversified our supply base to reduce our overall exposure to an individual major supplier.”
Neil Johnson, Hornby chairman, said: “The progress that has been made in resolving the previous supply chain issues, coupled with a more favourable dollar/sterling exchange rate will stand the company in good stead during the next financial year.”
A Hornby spokesman told SM the firm had broadened its supplier base but could not say by how many vendors, although India is now supplying parts as well as China.
The firm said trading continued to be in line with market expectations and cash generation had been strong. Net debt at 31 December 2009 was £10.5 million, compared to £14.3 million the year before.
Hornby has also launched a range to tie in with the London 2012 Olympic Games.