by business editor Trevor Sturgess

Hornby, the Kent-based models and collectibles group, is stepping up sales of Olympic merchandise in China.

The manufacturer of model railways, Airfix kits, Humbrol paints and Corgi die-cast models, reports encouraging distribution to the vast Chinese market.

Hornby is working closely with a Chinese company making the London 2012 pin badges and which is distributing Hornby products to around 2,000 outlets in China. Hornby says interest in the London Games is high in the wake of the Beijing Games in 2008.

The Broadstairs company is capitalising on the 2012 Olympics as half-year sales rose by 11% to £28.4m and pre-tax profit by 100% to £1m (from £500,000 to September 30, 2010).

UK sales jumped by 4% to £20.5m and European sales were up 50% to £6.9m.

Frank Martin, chief executive of Hornby said: "Our sales in the UK have continued to be resilient, which demonstrates the enduring appeal of our brands and the strength of the hobbyist market.

"Our Olympic and Paralympic ranges are selling well and we have increased our distribution network considerably in the UK. We have also gained distribution for our London 2012 ranges in China."

The business was well positioned for the important Christmas market.

"Whilst the trading environment is likely to be challenging, our retailer listings are stronger than ever," Mr Martin added. "We remain optimistic that our strong brand portfolio will continue to perform well."

Hornby announced an interim 1.7p dividend.