Model maker Hornby is expecting losses to be larger than predicted this year after poorer than expected sales over Christmas.

The toy firm, which is headquartered in Sandwich, said its decision to stop discounting large quantities of stock had impacted revenues.

It also blamed late product deliveries in its international business in a trading update on Thursday.

Its new management team, led by new chief executive Lyndon Davies, who joined in October, has managed to make £1.7 million of savings to overheads.

It aims to make more savings in its procurement and change its terms with some of its suppliers.

Mr Davies said the board remains “committed” to its strategy in outlined in its half year results, when it reported revenues down 2% to £21.9 million and pre-tax losses of £4.7 million, up 4%.

“We are already starting to see evidence of positive momentum in the pre-orders for our new product ranges that were announced at the beginning of the year as well as old retail partners re-engaging following the end of the discount-era," he said.

“The design and production cycles are long in this business and whilst we are excited about the products we have in the pipeline, it will take time for the new products to come through and for the trust with our customers to be fully rebuilt.

"We are determined to weather the storm and come out the other side with stronger brands, loyal customers, a leaner cost base and a better foundation from which to build a profitable and growing business...” - Lyndon Davies, Hornby

“The change in strategy has meant that the Christmas trading period was tough and there is likely to be some more volatility as we find out how off-peak trading performs for the first time in years without discounting.

"Despite this, we are determined to weather the storm and come out the other side with stronger brands, loyal customers, a leaner cost base and a better foundation from which to build a profitable and growing business.”

Hornby, which also sells Scalextric, Airfix, Humbrol and Corgi products, suffered growing underlying losses in the year to March 2017, up 10% to £6.3 million, with revenues down 15% to £47.4 million.

The company, which still has a visitor centre in Margate, will report its results for its latest financial year in June.