Hornby said it has posted higher sales and profit margins over the tricky Christmas period, keeping trading on track for the rest of the year.
The model train manufacturer said sales and margins were ahead of the same period last year as the company’s turnaround gathers steam.
It provided the trading update as it also increased the maximum threshold for an existing loan from its largest shareholder.
Hornby said investor Phoenix Fund UK agreed to increase the maximum in its credit facility from £3 million to £9 million, while leaving the terms unchanged. The loan is repayable by 2021.
The London-listed business said it will use the funds to “capitalise on the positive momentum in the business and increase investment in technology and products for the coming year”.
Hornby is also exploring opportunities to “optimise” its balance sheet for further future investment and growth, it added.
In November, the company narrowed its annual losses for the year to September 2019, while revenues increased by 15% to £15.9 million.
Hornby had trimmed its pre-tax losses to £2.5 million for the year, down from a £3.2 million loss the previous year.
Announcing its full-year figures, chief executive Lyndon Davies said: “Revenue is growing, losses are narrowing and we are shifting gears in our journey back to profitability and beyond.”
Shares in the company jumped 6.8% to 40.6p on Monday afternoon.