Toymaker Hornby announces turnaround plan, reports FY pretax loss

(Reuters) - British toymaker Hornby Plc (HRN.L) said it would decrease its product lines by 40 percent and exit a majority of its concession agreements in the UK in a turnaround plan aimed at boosting its gross margins.

Hornby, famous for its model railways, warned on profit three times last year, with shares having tumbled 65 percent in the last twelve months.

The company appointed Finance Director Steve Cooke as its CEO in April, two months after its previous head Richard Ames left in the wake of its third profit warning.

The new business plan will focus on its core hobby customers, Cooke said in a statement, adding that revenue would fall by about a quarter.

The company will raise about 8 million pounds through a placing of shares in order to fund the restructuring.

Hornby reported an underlying pretax loss of 5.7 million pounds for the year ended March 31, compared with a profit of 1.6 million pounds a year earlier.

($1 = 0.6812 pounds)

(Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Sunil Nair)