Model-maker Hornby remains committed to building a £1.6 million visitor centre despite revealing it could go out of business unless shareholders approve a turnaround plan.

The train-set manufacturer, which is also behind Scalextric, Corgi and Airfix, revealed losses of £13.7 million in its latest annual results as the introduction of new planning systems disrupted its business more than expected.

Its turnaround plan involves raising £8 million in a new share offering and the renegotiation of its £10 million bank loan with Barclays into a revolving credit facility.

The proposals will be voted on by shareholders on Friday.

However, bosses at the company said the firm still planned to press ahead with proposals to move its visitor centre from its run-down former headquarters at Westwood Industrial Estate in Margate.

It said it would only transfer to a new building in two disused slipways at Ramsgate harbour once it had completely sold off its former premises, where it had been based for more than 60 years.

It has already sold off part of the site, which is being turned into a trade park, and is in “detailed discussions” with another party about the remaining section, which is expected to be finalised in the coming months.

The company, based in Sandwich, parted ways with its former chief executive Richard Ames in February after a string of profit warnings.

Its annual results reveal revenues fell 4% to £55.8 million in the year to the end of March, giving it an underlying pre-tax loss of £5.7 million after making a £1.6 million underlying profit before tax a year earlier.