Model train firm Hornby has vowed to return to profitability despite an increase in losses.

In its financial figures for the year ended March 31, the company, based at the Discovery Park in Sandwich, reported a loss before tax of £10.1million - up from £9.5m the year before.

It also saw revenue drop by almost 25% from £47.4m in 2017 to £35.7m.

But new chief executive Lyndon Davies says "green shoots are starting to appear for the future".

He was hired in November last year from miniature cars and van manufacturer Oxford Diecast, tasked with attempting to turn around the fortunes of the once proud company.

Hornby, which also owns the Airfix and Scalextric brands, has faced years of declining revenues which forced it to sell its traditional Margate base and move staff to Sandwich and its logistics hub to Hersden, near Canterbury.

Only the visitor centre remains at its former Margate home.

Mr Davies, the firm's CEO and interim chairman, said: "In the first seven months that I have been at Hornby, we have assessed our position and confronted the reality of the situation in which we find ourselves.

"Tough decisions have now been taken and we are currently laying down the foundations for our future success. There is a new energy in the business and I am excited with our plans as we re-engage across both domestic and international markets with these well-loved brands."

He told shareholders: "I do not wish to dwell on the mistakes of the past, but please do not think I take them lightly. I have drawn on all my experience in assessing Hornby's current position and formulating my views on the future direction.

"I have a great deal of passion for these iconic brands and it has pained me to see them fall from grace.

"The first step is understanding. The next step is fixing the basic issues once they are understood. The final step is to get us back to profitability with a logical and measured strategy that does not imperil the balance sheet. In doing these things we will build long term shareholder value in a sustainable way. Some of our brands have lasted for more than 100 years and it is my view that they should thrive for at least 100 more.

"We don't want to give too much away to our competitors, but I can tell you that the changes to the strategy and the way we deal with our customers, suppliers, retailers and manufacturing partners has already yielded many opportunities to save costs, sell more and increase gross margins.

"Dominant national retailers who were only a distant memory to the business have proactively re-engaged now the discounting has stopped. Licensors of important trademarks are engaging with us again and wanting to broaden ranges and partnerships. Previously lost talent is coming back to the group and morale is starting to improve in our staff who will be the real champions of this turnaround.

"Whilst there are green shoots starting to appear for the future, at the time of writing this, we have only been in place for seven months. The long design cycles mean that we have a largely inherited line plan for products being delivered this year. Nonetheless, we are at work doing the best with what we have as we seek to return the group to profitability."