Hornby back on track

June 13, 2001 Posted: 0802 GMT

LONDON (CNN) -- Hornby, the best-known UK maker of model railway and motor racing sets, said earnings jumped 63 percent after restructuring and cost cuts.

Hornby (HRN) shares soared 16 percent to 155 pence in London after the results were announced.

The company, whose products include Scalextric car racing, said full-year pretax profits before one-time items rose to £2.3 million ($3 million) from £1.4 million the previous year.

Hornby said sales rose 15 percent to £24.6 million from £21.5 million last year as it concentrated on developing the quality and detailing of its models.

Turnover was also boosted by increased sales at its Scalextric USA unit, said the company, which also makes Thomas the Tank Engine toys.

As part of its restructuring, Hornby closed its London headquarters and showroom and completed the relocation of its production to mainland China.

"We are focusing on maximizing our revenue streams through product innovation," said Chief Executive Frank Martin, in reference to the company's recent move into developing computer games based on its models.

The company, named after Frank Hornby who also invented Meccano construction toys at the start of the century, reported a 20 percent rise in diluted earnings per share to 11.74 pence compared with  9.68 pence the previous year. It proposed a final dividend of 10 pence per share.

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