Toy train maker Hornby has ticked off the first phase of its turnaround plan as it restructured its UK and European operations.
Early signs are investors are happy with that news - shares surged eight per cent in early trading to 33.25p.
Model enthusiasts will be holding their breath the firm is resolutely back on track after a bumpy ride. In February last year, chief executive at the time Richard Ames left after the firm's third profit warning in five months.
And the firm behind the Scalextric car models has since been focusing on developing "a smaller and more focused business". In an update today, Hornby said it had successfully restructured its UK and European business, reducing its cost base, and trimmed investment back, adding that its product offering has been "rationalised and re-focused".
The firm said it had been concentrating on improving cash flow and on 31 March net cash on the balance sheet was £1.1m, compared to a net debt of £7.2m the same time last year, which was ahead of management's expectations.
Steve Cooke, Hornby's chief executive, said:
I am pleased to report that the first stage of our turnaround plan has been successful and this provides a strong base from which Hornby can build.
It has been a challenging time for all of Hornby's employees and I would like to thank them for their dedication, commitment and hard work over the past year. Improving our customer focus has been a key part of the plan and I am particularly pleased that we have now begun to restore our leading position with our core hobby retail customers.
In a February trading update the firm said revenues are expected to be in line with expectations, though that was down 20-25 per cent "due to the rationalisation of the business".