Hornby Plc, a British toy making company, said today that its full year profits for FY 2010 would beat the market expectations. The toy maker said that it expects greater than forecasted full year profits as it managed to reduce its inventories at better margins.

Hornby could resume paying a final dividend for the fiscal. The company also said that there might be some uncertainty regarding consumer confidence in the coming fiscal.

Hornby, the maker of the Airfix and Scalextric products, said that now it expects the full year underlying pretax profit of £5.7 million ahead of the previous forecasts by the market analysts.

Earlier market analysts were expecting an underlying pretax profit of £5.0 million for the financial year ended March 2010. Hornby also said that it managed to reduce its debt levels to £3.2 million as at March 31 from £11.8 million last year.

"The company had performed better than expected due to the sale of stock bought in the previous financial year at more favorable sterling/dollar exchange rates, which had provided better margins and reduced the need for inventory provisions," said Frank Martin, chief executive of Hornby.

The annual result of Hornby is expected to be released on June 4.