Bosses at model maker Hornby have hailed the end of the first stage of its turnaround designed to stem years of losses.

In a trading update on Friday, it told shareholders it has restructured its UK and European operations which had improved its cost base and “rationalised” its product range.

It remains on course to make a loss for the 12 months to the end of March, having lost £13.7 million last year and £4.7 million in the first half of this financial year.

However, revenues for the full year were slightly ahead of expectations, with the fourth quarter showing an improving trend.

The Sandwich-based firm, which has its visitor centre in Margate and warehouse operations in Hersden, is “confident in the business’ underlying trading momentum” as it embarks on the next phase of its turnaround.

Chief executive Steve Cooke said: “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.

“Coupled with the considerable improvement in our financial position, I am confident that we have set the group on the right course to generate value for all our stakeholders.”