Chairman Neil Johnson outlined the new deal in a trading statement released following its recent AGM. He also highlighted the firm’s progress with the recently acquired Airfix and Humbrol brands (including a new Airfix Dr Who line) and its model railway business.
He said: “I am delighted to report to shareholders that we have made a solid start to the new financial year. Our UK and international subsidiaries are making good progress. Sales via our network of concessions and to our retail customers have been strong. Looking forward as we approach the run up to Christmas, our order intake across the Group has been growing significantly compared to prior year, on a like for like basis. Additionally, order intake for the Airfix and Humbrol brands, acquired in November 2006, has been very encouraging.
“Our recent strategy has been to diversify and strengthen the Group’s revenue streams. We have completed a number of acquisitions of established hobby brands that have extended our subsidiaries into new international markets. After a period of investment to re-organise and re-launch our European operations, we are particularly pleased that our international businesses are now starting to make a significant contribution to the overall Group performance.
“In our slot car racing business, we have secured the licence with the McLaren Formula 1 team to use the images of both Fernando Alonso and Lewis Hamilton on a range of sets and cars. Given the worldwide popularity of both drivers we expect these product lines to become best sellers.
“We have also secured the worldwide license for a range of slot car racing products based on the new Transformers movie. We have launched the Transformers Slot car racing set in the UK, USA and European markets. Early market reaction to this particular license has been excellent.
“Our model railway operations are performing well across all territories in which we operate. The impact of our new Digital Control System remains the driver of growth in the UK market, as consumers switch to the new system. In the main European markets, the re-launch of our brands has been achieved successfully. Later this year, we will commence deliveries of the first new products, developed specifically for Germany, Italy and France. These are the largest continental European markets for model railway products. We are confident that when the markets review these flagship products, consumers will recognise the significant improvements that we are able to deliver by combining European product development and engineering skills, with high quality manufacturing ability in China.
“The acquisition of the Airfix and Humbrol brands has been completed and the business has bedded down well. The retail community has been extremely supportive of our efforts to re-launch the product lines. Consequently, new order levels from all channels of distribution have been excellent. We have worked hard to re-invigorate the pipeline of new products and we are delighted to have negotiated a licence with BBC Worldwide for a range of Airfix models based on the Dr Who series. The first product, which will be launched in time for Christmas 2007, will feature the Tardis, together with figurines of the Doctor and his assistant.
“In conclusion, all of our subsidiaries continue to offer significant potential for growth. Forward orders are much stronger than the equivalent position last year. With a strong pipeline of new product launches, we are very well placed to continue to drive both sales and profit growth.”