Market report: Hornby remains a bumpy ride but investors refuse to alight just yet

Despite repeated fears it might be derailed, investors on the Hornby express stayed on board the model-trains company earlier on Tuesday.

The AIM-listed toymaker admitted its performance this year hasn’t hit City targets, and that interim chairman David Adams is stepping down. Hornby revealed the profits will partly be hurt by a new decision to no longer offer large quantities of stock at a discount.

The discount changes by newly appointed chief executive, Lyndon Charles Davies, cushioned the profit warning’s blow, and shares dipped only 0.05p to 32.95p.

On the FTSE 100, private hospitals operator Mediclinic warned that it would see lower earnings because of a downbeat performance in South Africa and the Middle East.

CMC Markets dubbed the results “disappointing” and shares fell 23.5p to 651.5p.

The overall blue-chip index fell 13.78 points to 7513.19 as traders sat on their hands with prospects for inflation and a November rate rise largely unchanged.

Over on the FTSE 250, housebuilder Bellway posted a 14% revenue surge to £2.5 billion for the year to July 31. Pre-tax profit rose 12.6% to £560.7 million.

Jefferies analyst Anthony Codling said: “Bellway demonstrated today that despite macro uncertainties and expectations of Bank rate rises, new build homes are still selling like hot cakes.”

Shares in Bellway rose 29p to 3532p.

But the City took a bite out of the value of Chiquito and Garfunkel’s parent The Restaurant Group. It fell 5.5p to 297p as the market digested figures from the Coffer Peach business tracker which showed that Britain’s managed pubs, bars and restaurants saw sales decline in September, particularly in London.

The FTSE 250 lost 80.97 points to 20,136.60.

Two takeover targets were also in the spotlight: Revolution Bars and Millennium & Copthorne Hotels.

Investors in cocktails specialist Revolution were due to vote on the board’s recommended 205p-a-share offer from pubs chain Stonegate today.

The £101.5 million swoop looked in doubt yesterday after only 55% of proxy voters backed the deal. Stonegate needs three-quarters to back its bid. Shares in Revolution rose 2.7p to 189.7p.

Investors also weighed prospects for M&C — last week Singaporean billionaire Kwek Leng Beng unveiled a potential 552.5p-a-share offer for the 35% he does not already own. But investor Fidelity International has accused M&C’s independent directors of settling for a knockdown price. The shares rose 1p to 576p.