Margate model manufacturing company Hornby has announced it will cancel its listing on the London stock market and re-register as a private firm.
The company says: “Directors are confident that operating as a private entity will provide Hornby with the necessary agility for swift decision-making and efficient execution of strategy whilst not depriving shareholders of material benefit.”
Hornby has been a public company on the stock exchange since 1986 but says it considers re-registering as a private company will have a number of benefits.
In a letter to shareholders the firm says being on the junior Alternative Investment Market (AIM) involves a considerable annual cost of approximately £0.4 million associated with fees for a nominated adviser and broker, London Stock Exchange fees and the costs associated with being a quoted company.
It adds that becoming a private company would allow the executive management team to focus more time on operational management and execution of the company’s strategy and ‘streamline’ structural changes.
Hornby says: “Over recent years, Hornby has committed to implementing significant structural change and driving operational transformation for the benefit of all stakeholders in Hornby, not least its loyal shareholder base.
“This commitment has been evidenced by the Board’s strategic actions including acquisitions, divestments and operational restructuring. This has been most recently evidenced by the acquisition of a stake in Warlord Games, the acquisition of Corgi Model Club, the sale of LCD Enterprises, the headcount and restructuring in 2024 and the relocation of the Company’s logistics operations to the Midlands.
“The Board anticipates that for this process of structural change to continue at pace and to maximum effect, operating outside a publicly quoted environment would improve its decision-making ability and regulatory hurdles during a period demanding agility and focused execution.
“At the same time, the Board is conscious of the limited liquidity of the Company’s shares on AIM balanced against the regulatory burden and cost of maintaining the public quotation.
“Therefore, following an ongoing and in-depth evaluation, the Board has concluded that it is in the best interests of the Company and its Shareholders to seek Shareholder approval for the voluntary cancellation of admission of the Ordinary Shares to trading on AIM and for the Company to be re-registered as a private limited company.”
In January the firm, which has been based in Margate for 70 years, issued a trading update for the period between October 1 and December 31.
Group sales were 7% ahead of the same period for 2023, bucking the trend reported by the British Retail Consortium that UK non-food sales decreased by 1.5% versus previous year for the three months to 31 December.
Hornby group sales for the financial year to date are 8% ahead of last year, and gross profits are ahead by 10%.
Net debt marginally reduced in the quarter and was at £18.2 million by the end of December, compared to net debt £18.8 million at the end of September 2024.
The news follows on the heels of the most recent half yearly report that indicated Hornby is likely to continue with job reductions this year as part of a three year turnaround plan.
The firm made ‘significant’ headcount reductions with savings of around £1m of central costs in the six months to 30 September, 2024. A further £500,000 of savings are expected in 2025.
A general meeting General Meeting will be held on April 1 at Hornby’s base in Margate seeking Shareholder approval for the change.
The company has notified the London Stock Exchange of the date of the proposed cancellation which is expected to come into effect on 10 April.
Those who choose to will be able trade out of their shareholding following the proposed cancellation or remain as a shareholder in the private company.
