Hornby said the racing car game had received a boost after current Formula One grand prix teams were introduced.
In November the firm – which also produces Airfix models – was facing a potential downturn according to retail experts.
But toys from Disney/Pixar’s Cars have also helped to fuel the sales rise.
The company said demand for its brands from stores jumped in December and it predicted a big boost to sales this summer with its association with Toy Story 3.
Hornby also has a deal to produce toys for the 2010 London Olympics, including a red London bus.
It has predicted that sales and profits for the year to the end of March will be “significantly ahead” of the previous year.
The City has pencilled in pre-tax profits of £5m on sales of £65.5m
The company said: “We are delighted that the appeal of our products remains strong.”
Chairman Neil Johnson said in yesterday’s trading update: “Sales were encouraging in the important pre-Christmas period and indeed in the early weeks of 2010.
“This should ensure a positive final quarter to the financial year as retailers replenish their stocks.
“We are excited about the future prospects for the company and I look forward to updating investors on future progress.”
The firm said it had also continued to make improvements to its supply chain in China. The network had been disrupted by the takeover of its main supplier by rival Hong Kong toy firm Kader.