Hornby has parted company with its chief executive days after revealing expected losses of up to £6 million and raising concerns it may break its lending agreement with the bank.

Richard Ames is leaving the model maker with immediate effect less than two years after joining from bookmaker Ladbrokes, where he was managing director of its product division.

On Thursday, Hornby wiped £3 million off its profit forecast and wrote off £1 million after a stock take at is Hersden warehouse, near Canterbury, and a review of its European balance sheet.

The revelation led to a collapse in its share price by more than 70% to 23.96p by close of trading on Friday.

Its shares rallied to 30p this morning amid the news its chairman Roger Canham will take over the reins as executive chairman for the foreseeable future.

He has held the role before following the departure of previous chief executive Frank Martin.

Hornby, which is also behind the Corgi, Scalextric and Airfix brands, has endured a tough few years after the London 2012 Olympics, when revenues from its investment in novelty toys failed to materialise.

It has issued a string of profit warnings in the last two years, predicting losses of £2 million in November and revealing it made a pre-tax loss of £4.5 million in the first six months of this financial year.

This was despite a drastic reorganisation of the business which saw its move its warehouse operations to Hersden, relocate its head office to Discovery Park in Sandwich and begin construction of a new visitor centre in Ramsgate harbour, due to open this year.

The moves brought an end to its tenure at its historic headquarters in Margate, where it had been based for more than 60 years.

Mr Ames, 45, joined Hornby in April 2014 having worked at Ladbrokes since 2005.

Before that he worked as marketing director for Dixons Stores Group and in the consumer electronics divisions at Asda Wal-Mart.

After last week’s profit warning, he said: “This has been a real year of change at Hornby.

“Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish.

“The feedback from customers at the recent International Toy Fairs was encouraging and we are facing the future where, with the right platform, we can build value for our shareholders and drive the group’s recovery.”