The firm's profits fell  to £4.1 million ($6.7 million) in the year to March 31, which they blamed on a combination of supply chain problems and bad weather which affected profits.

But the company, founded by Frank Hornby in 1907 as Meccano, is looking forward to a massive upturn in its fortunes thanks to its deal with London 2012 as the official toymaker.

The latest Revenues included very little from the Olympics range which includes taxis at £4.99 ($8.19) each and bigger items such as a model Scalextric velodrome at £69.99 ($114.97) and a £200 ($329) limited edition train set.

Chief executive Frank Martin said: "The Olympics is really starting to hit its stride as all of our products start coming to the market.

"Our range of London 2012 merchandise is now gathering real momentum.

"As we approach a year to go to the games, we are seeing a significant increase in sales.

"We are also benefiting from the increased distribution coverage."

"We are looking for a significant growth in sales for the current year, partly because of the Olympics and partly because of the resurgence of the European markets."

In November last year, Hornby also agreed a deal with the Royal Mint to distribute collectable coins for the Olympics.

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