The controller who is driving Hornby down the right track

Profile: Frank Martin joined the toy maker when it was off the rails; now it's steaming ahead

Internal link

The controller who is driving Hornby down the right track

For someone in charge of Britain's best-known model railway maker, Frank Martin displays remarkable emotional detachment from his product. The Hornby chief executive is no anorak train-spotter with an encyclopedic knowledge of locomotive serial numbers and a fondness for lurking at the end of station platforms with a Thermos flask and a notebook.

He is a hunting, shooting and fishing enthusiast with a degree in management sciences who prefers sailing off the south coast. He never even owned a Hornby train set as a child. Or a Scalextric set, Hornby's other well-known brand.

"No. I was deprived," he says, not sounding remotely bothered. "I had a small Triang train set. And I had a next door neighbour, Derek, who had a Scalextric kit which he shared with his brothers."

Despite his detachment he has spent much of his life working in the toy industry, though he says the appeal lies in "the ability to change things quickly" rather than the thrill of a new launch. As well as Hornby he has worked for Airfix, Raleigh bicycles and Hasbro, the US toy giant where he helped launch big hits such as My Little Pony and Transformers in the UK.

He certainly seems to be doing something right at Hornby. Since the 50-year-old Mancunian joined as chief executive in October 2000, Hornby shares have risen from their five-year low of 117p to a new high of more than 400p. Sales and profits are up and, whisper it, Hornby train sets are fashionable again. All this comes not long after many were writing the obituaries of this historic toy name, saying it was being slowly killed off by the computer games craze. "When I was offered the job I was surprised there had been no successful bids for the company, which had been put up for sale. I'd looked at it and thought the market had significantly undervalued the business. I felt all the big moves, such as shifting manufacturing to China, had already been made. And I could see that the benefits had yet to come through."

He admits that he harboured lingering hopes of bidding for Hornby himself when he was chief executive of Humbrol, the Irish-owned company which bought the Airfix model business from receivership.

Humbrol was not interested and Mr Martin decided not to seek backing for a bid on his own. "It's hard, morally, to do that when you're working for someone else," he explains.

He joined Hornby at the right time. His predecessor, Peter Newey, had made some of the tough decisions including shifting production from the group's dismal head office in Margate, Kent to China and laying off more than 400 workers. The disastrous acquisitions of the 1980s, including the speedboat manufacturer Fletcher, had long gone. And the business had started achieving success with older customers as well as children. Last week it reported a 62 per cent jump in full-year profits to £3.7m on sales up 16 per cent to £28.5m.

"I'm amazed there was no interest from some of the big toy companies," he said. "But they have not recognised the growing opportunity in adult hobbies. They're totally focused on the children's market, whilst at the same time bemoaning the difficulties of children getting older younger."

The decision to shift manufacturing to China has not only cut costs. It has increased the quality of production, meaning Hornby can add much more intricate detail to its engines and carriages as well as the Scalextric cars.

The company has introduced nine new Scalextric cars in the past year (the new ones have drivers in rather than blacked out windows). It has also just launched a new set called Scalextric Sport which includes track which snaps together more easily. "The old style was 40 years old," Mr Martin said.

The company has tapped into two distinct markets. The My First Hornby and new My First Scalextric sets capture the younger customers. Older children have been wooed by models such as the £90 Hogwart's Express from the first Harry Potter movie and has shifted 10,000 units so far.

But the real growth has come from older enthusiasts who either never had a model railway of their own or only now have the disposable income to indulge their hobby to the full. "The interest of the post-war baby boomers has come just at the right time for us," Mr Martin said. "If they had looked at Hornby train sets a few years ago they would have seen a toy. Now they see a collectible."

Three-quarters of Hornby train set sales are now to adults, though the split with Scalextric is the other way round.

Rod Stewart is said to be a model railway fan, with an elaborate track in his Essex home. Indeed his former wife, Rachel Hunter, was said to feel that he spent more time with his trains than he did with her.

Mr Martin doesn't know if the ageing rocker has a Hornby set and says he hasn't contacted the singer to see if he would be interested in some sort of marketing or advertising deal. "I think he would be a bit expensive," he says sheepishly.

In a sense Mr Martin was destined to run a company such as Hornby. His father, a textile company production manager, was made redundant after 40 years with the same company and the young Martin decided he would prefer to run his own business.

After studying management sciences at UMIST he joined TI Group as a management trainee. He was assigned to Raleigh, the Nottingham-based bicycle maker which had a toy division making scooters and dolls' prams. "It was with Raleigh that I went to my first toy fair, in Brighton in 1976. I remember the big names were people like Airfix and Hornby."

After five years at Raleigh he spent two years at the lingerie maker Pretty Polly. After that it was Hasbro and then a stint at Coloroll, the conglomerate built up by John Ashcroft until it went spectacularly bust. "It was a very young company and John allowed you to run a business hands on." At 36, Mr Martin was running the Crown House pottery business.

He believes there is much he can still do at Hornby, including a move into more hobby areas and possible acquisitions. "We are actively looking at complementary product categories," he says.

His commitment to the company has been demonstrated by his decision to move his family down from Humberside to Broadstairs, Kent. But his biggest challenge now might be preserving the company's independence. Hornby's stock market value is only £30m, with £6.5m of cash. A former Credit Lyonnais banking analyst, Martin Hughes, is the largest share holder with 27 per cent while Peter Wood, the Direct Line insurance founder, has 10 per cent. "We've got a more committed and enthusiastic shareholder base. We believe there is significant upside potential."

Frank Martin

Career history: Graduate trainee at TI Group, Pretty Polly marketing manager, UK marketing director at Hasbro, Coloroll (head of Crown House pottery), Humbrol-Airfix, Hornby.

Age: 50.

Pay: £226,000.

Biggest influence: Professor Sir Roland Smith, then head of management sciences at UMIST. "I found him inspirational and I've put a lot of his ideas into practice."

Hobbies: Shooting, sailing, family.