Model train manufacturer Hornby is closing the warehouse at its historic headquarters in Margate.

The move comes after an announcement of a £4.5m annual loss and could potentially see the model railway maker leave the site on the Kent coast entirely.

The headquarters have been based in Margate for 60 years, but now the distribution warehouse will be moved to Lakeside Business Park in Hersden, near Canterbury.

The Margate warehouse has been open since 1954, but much of the production now takes place overseas. Since 2000, the factory space has been used as a warehousing and packing facility.

The firm said the move has been brought about as a result of the tired warehouse conditions at the site leaving the location no longer suitable for large-scale, modern logistics operations.

Hornby has said all staff employed at the distribution warehouse will be transferred to the new site to prevent any job losses.

Chief executive Richard Ames said: "The new facilities will give Hornby a solid platform from which to develop a strong business and provide excellent customer service and on time deliveries for our customers well into the future.

"The facility in Margate that has housed the company's UK stock since manufacturing started to move to China in the late 1990s, has been an area of concern for some time."

The new site will be operated by DS Logistics.

CEO Peter Dubbeld, said: "We are agile and specialised in creating customised logistics business models – and are delighted to announce that Hornby Hobbies has chosen to expand their logistics operation with us.

"Our international experience in warehouse development within the segment enables us to perform out of a high quality building in cost and time efficient manner."

The agreement with DS Logistics is for a number of years and hands over control of storage, handling and distribution, allowing Hornby to increase possibilities for solutions in growth and cost saving.

"We have been repeatedly told by our customers that our turnaround time between order placement and despatch to store is too long..." - Nathaniel Southworth, DS Logistics

Sales and brand director Nathaniel Southworth said: "We have started to improve our communication level to our customers, and the enthusiasts for our products.

"We have been repeatedly told by our customers that our turnaround time between order placement and despatch to store is too long.

Teams have been trialling improvements over the past year and hope that warehouse move will allow Hornby to provide products quickly.

Peter Oliver who has worked at Hornby for 40 years said: "It's a really exciting time for Hornby, we're all pleased about the move and looking forward to being in new, spacious, modern surroundings."