Lego’s return to growth boosted by Star Wars and Harry Potter products

Toy-maker Lego returned to profit growth last year driven by higher sales of Star Wars and Harry Potter-themed products.

The firm reported a 3% increase in pre-tax profits to 10.5 billion Danish kroner (£1.2 billion) for 2018 and a 3% rise in net profit to 8.1 billion kroner (£930 million).

Sales stabilised last year and grew 4% to 36.4 billion kroner (£4.1 billion) after falling in 2017.

Traditional toy companies have struggled with the rise of digital gadgets and saw supply chains disrupted when specialist retailer Toy R Us collapsed into administration last year.

However, Lego has bucked the trend after revenue was boosted by strong double-digit growth in China as the company expanded its offering in the country.

Star Wars, Harry Potter, Jurassic World and Ninjago were among Lego’s top selling building set themes in 2018.

Lego expects revenue to grow by single digits in 2019 as the group focuses on developing products and expanding in established and emerging markets such as China.

The company said it also “plans to continue investing in initiatives to drive longer-term sustainable growth”.

Chief executive Niels Christiansen said: “2018 was a defining year for the toy industry. Disruption in retail channels and increasing digitalisation reshaped the landscape and set a course of unprecedented change.

“However, I am pleased to report that even in the face of these external challenges, the Lego Group stabilised its business during 2018 and achieved modest top and bottom-line growth.

“Digitalisation is changing almost every aspect of our daily lives, and we are embracing these opportunities. While physical play remains our core, we will continue to invest in innovative, fun and safe ways to integrate the brick with the myriad possibilities of digital play.”