Continental lines carry Hornby's profit hopes.

Trainset maker Hornby is still on track to "broadly" meet profits hopes after deals in Europe cut its dependence on the UK market.

The company, which ends its financial year in March, said UK pre-Christmas trading had been more difficult than previous years, but the European market's reaction to its recently acquired Continental brands had been excellent. Since December 2004, Hornby has owned stakes in the Electron, Jouef, Rivarossi, Lima and Arnold toy makers which operate in Spain, Italy, France and Germany.

Hornby said UK sales of Scalextric racing sets and Hornby trainsets had been depressed, but trade in accessories such as individual model locomotives or track extensions had performed well, indicating the robust nature of the market.

The company hopes by targeting the European collectors' market it will permanently reduce its dependence on the UK.

It is also in the process of transferring production of the Italian Lima group ranges to China to increase profits growth.

Last week, it launched new digital ranges at the London Toy Fair, including a digital control system.

The business also has an exclusive licence to market racing products based on the A1 Grand Prix, which it said should become an important contributor to future sales.

The business was established in 1907 by Frank Hornby under the name "Mechanics Made Easy", which later became Meccano. It produced educational toys for children and in 1920 moved into model trains.

It now employs 133 people at its head office in Margate, Kent, with a small number of staff in the United States, Spain, Italy and France.

In China, the company has some 3,000 workers at its manufacturing plant.