Hornby shares moved higher on Friday after the group's new Chief Executive Officer (CEO) gave a confident and upbeat outlook following a less than impressive set of annual figures for the hobby products maker. Hit by supply chain issues, revenues dropped 10% from £57.4m to £51.6m, or 2% on a like-for-like basis, while statutory losses widened from £2.5m to £4.4m. On an underlying basis the loss came to £1.1m, compared to earnings of £0.2m in the previous year. Net debt rose from £2.2m to £7.3m. Confirming the group has performed in line with its expectations since the start of the financial year, CEO Richard Amex said he was "more convinced than ever" that Hornby could build on a more solid supply chain and support customer demand. He announced his decision to move the UK warehousing and logistics operations to a new site in an effort to improve the distribution and stock management, explaining that would enable it to improve its service. "Hornby has been through a difficult period," he continued. "Whilst I am under no illusion that there will be challenges ahead, I am confident that I can lead the group successfully during this next phase of our development. It is an important time for Hornby as the business strives to reach its full potential." The group has ended its long-standing agreement with its main manufacturer in China and increased its manufacturing sites to strengthen its previously troubled supply chain."The complex nature of the model manufacturing process and the length of the supply chains involved has meant that the initiatives, started in 2013, have not delivered results in the financial year," the group explained. "However, they have created the foundation upon which improvements in 2014-15 can be built." Sanlam Securities commented that the new management team have "a big task ahead of them" and said it continued to question "the future growth for niche traditional hobby goods especially with consumers shifting away from high valued hobby items to either lower ticket price items or new technology".It also noted that while the group's decision to terminate its agreement with its long standing major supplier of model railway products was a positive move in the long-term, it would have an adverse impact in the short-term due to slippage of product supply.Numis said the results were in line and that progress was being made. It maintained a 'hold' rating on the stock. Shares had climbed 1.18% to 77.40p by 10:36.NR