Hornby shares veer off the tracks after model maker warns trading is below expectations and pressure from competitors is cranking up

Shares in troubled model train maker Hornby veered off the tracks today after it said trading in the current financial year was below expectations.

The Margate-based toy maker, famous for its train sets, said increased competition, softer demand and reduced promotional activity contributed to a weaker performance.

The Hornby share price was down 11.8 per cent, or 3.75p, at 28p, after having fallen as much as 14 per cent earlier in the day.

Derailing: Hornby shares fell as much as 14 per cent  today

Derailing: Hornby shares fell as much as 14 per cent today

Hornby said: ‘Whilst the group still has the important Christmas trading period to come and significant opportunities remain to improve trading performance there is a risk that the shortfall in performance to date may not be recovered fully over the remainder of the financial year.’

The company, which makes Scalextric and Airfix, has been struggling of late, recently revealing a loss of £6.3million for 2016 and kicking out chairman Roger Canham.

The firm has been hit by changing tastes in toys and supply chain problems, and is in the middle of an attempted turnaround effort.

Hornby is majority owned by Phoenix Asset Management, which increased its stake in the company in July.

Phoenix said it intends to ‘increase its understanding of Hornby and its longer-term strategy for delivering further earnings growth following the completion of its turnaround strategy, by entering into further discussions with its management and the board of Hornby’.