Mike Ashley-backed Scalextric and model train firm Hornby (HRN.L) has revealed plans to go private, blaming regulatory hurdles and costs involved with a stock market listing.
The Aim (^FTAI)-listed group – which has been undergoing a turnaround with advice from Frasers (FRAS.L) founder and billionaire Mr Ashley – said it plans to re-register as a private company to help with its ongoing overhaul.
The Margate-based group said: “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.”
“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,” it added.
Shares in the group – which have already plunged by 50% over the past year – tumbled by more than another 32% in morning trading on Thursday.
Hornby added: “The company’s announcement today is not taken lightly.
“The 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.”
Investors will vote on the plans to delist on April 1, with support from at least 75% of investors needed for the proposal to be approved.
In an update alongside the plans, Hornby said trading had been weaker in January and February, but that it remains on track for full-year sales growth.
It has suffered amid shipping delays, but said these are expected to ease “in the coming months”.
The firm said in March last year that Mr Ashley would advise Hornby after building up an 8.9% stake in the model train specialist, becoming its third largest shareholder.
The toy company said the retail tycoon “entered into a consultancy arrangement” as it sought a financial turnaround.
It is hoped the move can help spark a financial turnaround at Hornby after it had seen losses mount.
Shares in the company slipped to their lowest price for decades at the end of 2023 as a result, but hit new lows on Thursday after the latest delisting news.
It also marks the latest blow to London’s junior Aim market, which has been hit by a raft of firms delisting in recent years, with 92 firms leaving the market last year.
