by business editor Trevor Sturgess

Hornby, the Kent-based hobby and toy manufacturer, has steamed ahead with strong Christmas and New Year sales.

The company with well-known brands such as Hornby, Scalextric, Airfix, Humbrol and Corgi, said today that consumer demand was high, with a significant improvement in the pre-Christmas period.

The company has seen strong sales from its tie-ins with films such Disney/Pixar's Cars, television's Top Gear, and Formula 1 Grand Prix racing teams.

This year, it expects licences to create Hornby and Micro Scalextric brands based on Disney/Pixar's Toy Story 3 to give another sales boost.

It has also launched the first products in the range associated with the London 2012 Olympic Games. A complete range of Olympic merchandise will be released in the run-up to the Games.

In an interim statement covering the period from October 1 to date, it said retailers ended the year with stocks at historically low levels.

Demand had continued to be good in the early weeks of January and orders were at a high level. Demand in mainland Europe remained strong and Hornby expects to end the financial year with sales and profits "significantly ahead of the previous year."

The strong euro had mitigated the effects of the weakness of Sterling against the US dollar. Net debt was reduced from £14.7m in September to £10.5m in December.

The company said it was well-positioned to increase sales, with more competitive products to provide increased value for money. The Airfix, Humbrol and Corgi brands - added in recent years - continued to show encouraging growth.

Chairman Neil Johnson said: "We have entered 2010 in a strong position. Sales were encouraging in the important pre-Christmas period and indeed in the early weeks of 2010. This should ensure a positive final quarter to the financial year as retailers replenish their stocks. Our ranges for 2010 are focussed on value for money and impressive licences which will continue to drive consumer interest in our products."