Hornby’s CEO Richard Ames has quit the business after the toy firm issued its third profit warning in five months.
However, since his departure shares have risen by more then a third, with shares up by 9p or 36.73 per cent.
Ames took over in 2014, where he led the company to its first profit in three years.
But due to an IT upgrade, management changes and supply problems for the company’s model railways, results for Hornby deteriorated.
Nathaniel Southworth, group sales director at Hornby, said: “Our requirement to update the financial markets ahead of our March year end has led to a chain reaction of events which have caused concern from all of our key stakeholders.
“The official statements give the full detail and are now in the public domain. We need to work with all our partners to focus on the incredibly positive show season that we have just completed.
“Throughout the global trade fairs we have had a phenomenal response to our 2016 product ranges. At the London Toy Fair we were awarded two Best New Toy Awards for our innovative Scalextric ARC product, and our Top Gun 30th anniversary Corgi model. Our developments in Airfix, Corgi, Hornby, and Scalextric garnered many positive consumer press headlines.
“Our customers openly acknowledged the hard work put into our product development, and we have seen the enquiries increase on a global scale. We recognise as a business we have a challenging period ahead, and we will now work hard to deliver and communicate our progress of multiple opportunities as we move forward.”
Roger Canham, chairman of the toy company, is now set to head up the group for the foreseeable future.
Last week Hornby revealed it was facing another profit warning, stating pre-tax losses of between £5.5 million and £6 million this year.
The company also said it was facing a £1 million write-off and was in talks with its lender, as the losses the company faced could result in it breaching its banking agreements.