HARBOUR Ring International Holdings will have its business and financial acumen put to the test during the next couple of years.
For the company which gave the world the Teenage Mutant Ninja Turtles, all is not well in the toy industry these days. Costs are rising, margins are being squeezed and analysts are predicting that Harbour Ring will be able to find little financial joy in toy sales next year.
According to a number of analysts the sky rocketing cost of plastic used to make toys is escalating almost exponentially and burning a hole in the company's (as well as other toy maker's) profit margins.
However, while there doesn't seem to be another Ninja Turtle phenomenon on the cards yet, toy sales in the US are expected to provide the company some relief, matching the seven per cent recorded last year.
No longer is there a quota on toys manufactured in China where Harbour Ring has concentrated much of its production. This should also help the company's profit picture in the coming years.
On the debit side, is the news that the European community will begin this year to impose a similar quota on Chinese-made toys, which will no doubt cut into the company's returns.
According to a number of analysts the best that Harbour Ring can hope for is for limited growth in earnings from their toy business.