Shares in Hornby have fallen more than 34% after the toymaker issued a profit warning revealing that sales of its London 2012 merchandise have flopped.

The group, whose brands include Corgi, Airfix and Scalextric, had hoped its Olympic products would drive a boost in profits.

But the disappointing sales mean it will only break even this financial year and results will not be as good as forecast, it said.

The ongoing economic downturn continued to hit consumer spending, Hornby said, and retailers that sell its products have been cautious when buying stock.

Hornby had previously said sales of its Olympic merchandise were "gathering momentum", and helped it see a rise in pre-tax profits from £4.4 to £4.5m in the year to the end of March 2012.

But a lack of interest from consumers over the summer saw retailers cancel repeat orders and resort to deep price discounting.

Hornby is now offering up to 85% off its Olympic and Paralympic ranges, which include model London 2012 taxis, Olympic-themed train sets and die-cast athlete figurines.

The company, based in Margate, Kent, has also been faced with major disruption to one of its largest suppliers in China, which it said will be substantial for the remainder of the financial year.

Alan

Hi Mike, I shall bring along all my remaining M track and you can choose what you want or make me an offer for the lot. I shall also be bringing the 3 7188 signals for you. Alan

It would not buy any if Made in China.

Does this announcement (see Post #1) mean that their business was so much on a knife edge that the failure of a sales campaign means that it is in real trouble? I would have thought that the sort of merchandise they were pushing for London 2012 had marginal appeal at best.

Also, most of us know that London is a very expensive city and most tourists who were there were
concerned and interested in the Olympics, as I would have been. After all, how often do people
get the once in a lifetime chance to be at this great event. Souvenirs are not a priority.
Peter