Search for new Hornby Chief Executive underway

Shares of Hornby, best known for its model train sets and Scalextric racing kits, came under pressure after it warned that the retail environment in the UK and Europe remains challenging and as it embarks on its search for a new Chief Executive.

As previously announced, Frank Martin will retire from his role as Chief Executive at the end of June this year. Martin has presided over a string of profit warnings and a near 40% drop in share price in the last year. Chairman, Roger Canham, will move to an executive role and appoint a new CEO.

Hornby also announced, following a review of the wider internal management structure, there will also be a re-structuring of the senior team below the board level.

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"This will create a simpler, more streamlined reporting structure that more closely reflects the current shape of the business and will take effect immediately. A one-off restructuring charge of around £0.5m will be recorded this year, which is expected to be largely offset by cost savings in the year to 31 March 2014," the group explained.

Otherwise the Children's toy maker said it remains confident in the group's strategy despite the continuing backdrop of a patchy consumer environment.

"We are confident that the measures that we have taken will strengthen our sales potential in the future. We have a broad portfolio of strong brands and we are optimistic that with a more reliable supply chain, we will see a return to growth of both sales and profitability."

As it approaches the end of its financial year, it said trading has been in line with its expectations. Hornby said the broadening of the supplier base is continuing successfully, which is expected to lead to an improvement in delivery reliability.

Hornby added, "The retail environment in the UK and Europe remains challenging, but we have responded by introducing a range of new products, that have been received enthusiastically at the recent international Toy Fairs."

"In particular, the response to the launch of the Quick Build concept across both Airfix and Scalextric brands and the re-launch of the Pocher model car range has been very encouraging."

CJ