Pre-tax profits for the first half were £1.8 million, compared to £2.7 million for the same period last year. The fall is attributed to the firm’s recent acquisition of Corgi in May and a £1.3 million increase in overheads associated with it.
The company reported more difficult trading conditions than previous years in some of its markets, which, coupled with supply constraints in its model railway business, outlined in July, resulted in sales dropping to £24.2 million, from £24.5 million in the previous year.
Turnover for the first half was £24.2 million, compared to £24.5 million year-on-year.
The firm is expecting James Bond Quantum of Solace licensed Scalextric products to perform well over Christmas along with the proposed launch of an Airfix kit featuring McLaren and Lewis Hamilton.
Frank Martin, chief executive said:
“We have made good progress during the first half of the year. The retail markets are undoubtedly more challenging. However the hobby sector has distinctive defensive characteristics, which will help us in a more difficult economic environment. Accordingly, we remain confident that the combination of our experienced management team and our strong brand portfolio will enable us to continue to drive the business forward.
“We have integrated the Corgi acquisition successfully. We are delighted that the business is performing well. Encouragingly, both Airfix and Humbrol brands acquired in 2006, continue to grow. We are sure that all three of these brands will continue to deliver excellent opportunities for growth.
“Looking forward, despite the challenges we face, we remain confident about the group’s prospects.”
In a statement, chairman Neil Johnson said:
“The Board believes that the defensive qualities of our brands and the breadth of our revenue streams will stand the group in good stead to weather better a more challenging economic environment.”