Hornby sells miniature car manufacturer for £1.4 million

Hornby has agreed to the sale of a loss-making business as part of strategic efforts to return the model train maker to profitability.

The group told shareholders on Tuesday that it would sell Oxford Diecast owner LCD for around £1.4 million to EKD Enterprises, a company owned by the family of chairman Lyndon Davies, who will step down from the Hornby board upon completion.

Hornby said LCD, which has a book value of around £3 million on the group’s balance sheet, was “no longer aligned with the core business” of the company.

Hornby has been overhauling its non-core businesses in attempts to return to profitability.

The group posted a loss of £187,005 on turnover of around £2.5 million for the year to March 31, compared with a loss of £113,470 in the previous twelve months.

Oxford Diecast made a pre-tax loss of around £200,000 for the period.

Hornby says its sale will help streamline the business, reduce inventory and allow the company to focus “solely” on Corgi in the diecast subsector.

Hornby shares rose 8.3 percent to 19.5p in early trade. They added 20 percent in the last twelve months, but lost almost 40 percent in the last five years.

Non-executive chairman Neil Sachdev said: “Hornby and its family of brands remain world-renowned, and rationalizing our portfolio in this way provides our customers with a more coherent offering.

“By consistently adapting to change, we will ensure we are best positioned to continue supporting our existing customers, while creating a new generation of hobbyists.”