News from Kent Business Online by reporter Chris Price :

Model maker Hornby will keep a presence at its former headquarters despite selling the site for £2.25 million.

The toy manufacturer, which is also behind brands like Scalextric and Corgi, will lease back part of its offloaded site in Margate, which will remain a visitor centre and retail outlet.

The company had been based there for more than 60 years but moved its head office staff to Discovery Park in Sandwich in 2015, having moved its distribution operations to Hersden, near Canterbury, a year earlier.

Hornby will maintain a presence at its historic headquarters in Margate despite selling the site for £2.25 million

It is unclear how its decision to lease back its visitor centre in Margate will affect plans to build a new £1.6 million attraction in Ramsgate Harbour.

It will make a £900,000 profit on the sale of its former headquarters to an as-yet unknown buyer.

The company, which made pre-tax losses of £4.7 million in the first half of its financial year, also announced its latest turnaround efforts are “progressing as expected”.

Last year it told shareholders it could go out of business if a plan to raise £8 million through new shares was not approved, when it revealed losses of £13.7 million in its annual results. The plan was given the green light.

Revenues fell by a quarter over the Christmas period but the company said this was “healthy” and that it had enjoyed a solid January. Overall turnover is expected to decline between 20% and 25% in this financial year.

The company said its reduction of stock levels is going “steadily”, down to £11.2 million at the end of last year, compared to £15.5 million in 2015. Net debt fell to £2.7 million from £6.4 million a year earlier.

Chief executive Steve Cooke said: “We are in the midst of a transformational year and our turnaround plan is proceeding as expected. The restructuring of our UK operations is complete and we are well advanced with our initiatives in Europe.

“Our improved financial position is evidence of the success of the first stage of the turnaround. Hornby is well positioned to continue its transition to profitability and higher cash generation.”