Hornby to change hands as rebel investor sells stake after failed plot

(c) Sky News 2017: <a href="http://news.sky.com/story/hornby-to-change-hands-as-rebel-investor-sells-stake-after-failed-plot-10922061">Hornby to change hands as rebel investor sells stake after failed plot</a>
 

Hornby (LSE: HRN.L - news) is facing a mandatory takeover after its largest shareholder bought out a fund involved in a failed coup.

The hobbies-to-collectables company - best known for its model railway interests - made the announcement months after an investor battle over its performance and direction under executive chairman Roger Canham.

Hornby said Phoenix, its largest investor, would have 55% of its stock after buying the 20% holding of New Pistoia Income Limited which had joined the bid in April to have Mr Canham ousted.

The plotters accused him of presiding over a failed strategy for the company, but the coup petered out when it failed to gain enough support.

There was a further twist to the tale on Wednesday afternoon when Hornby announced Mr Canham had quit the board with immediate effect.

The company cited the fact - among the complaints of his critics - that Mr Canham is also a director of Phoenix Asset Management Partners - the investment manager behind Phoenix UK.

The share sale by New Pistoia to Phoenix means Phoenix is now obliged, under City rules covering majority ownership, to offer to buy the shares it does not own.

Those investors would get just over 32p-per-share - the same price paid by Phoenix - valuing Hornby at £27.4m.

Phoenix said it wanted to keep Hornby's listing on London's AIM market to maintain transparency, rather than take the company private.

The announcement was made as Hornby published its full-year results - confirming it would pay no dividend as it continued to execute a two-year turnaround plan.

It reported a loss before tax of £6.3m in the year to 31 March compared to £13.7m in the previous year.

Sales fell back with revenue of £47.4m down on the £55.8m achieved 12 months previously.

The company said it had made crucial improvements to stock management and kept a lid on other costs.

Chief (Taiwan OTC: 3345.TWO - news) executive Steve Cooke said: "I am pleased with the progress we have made over the past year to deliver on the turnaround plan, the first stage of which has now been completed.

"We have delivered on the commitments we made a year ago and have made the necessary structural changes to the business.

"Having returned the Group to a sound financial footing we are now in a position to focus on the next stage... which will see Hornby progress back to profitability and positive cash generation."