Kent model maker Hornby set to sell Oxford Diecast back to its founder

Kent-headquartered model-maker Hornby is set to sell its loss-making subsidiary LCD Enterprises Limited (LCD), which makes Oxford Diecast miniature models, as a part of a move to rationalise its portfolio.

The Margate firm said it had struck a conditional agreement to sell the business to EKD Enterprises - a company owned by Lyndon Davies and his family (the previous owners of Oxford Diecast) for a total consideration of around 1.38 million. Davies founded Oxford Diecast in 1993.

The current net book value of LCD as represented on Hornby's balance sheet as at September 30 this year stood at £2.99 million so the sale price is far less than Hornby bosses had recently estimated Oxford Diecast to be worth.

Oxford Diecast is currently a loss-making business with losses before tax of around £200,000 in the year to end-March, 2024.

It is "no longer aligned with the core activities" of the group, the statement read.

In a stock market statement, Hornby said the transaction also sees Lyndon Davies step down from the board and his role as a non-executive director of Hornby with immediate effect from completion.

Hornby said the deal would streamline the group, and improve its aged inventory position, reducing stock by a further 11%.

It added that it would simplify its proposition in the collectable diecast category, allowing Hornby to focus exclusively on Corgi.

As part of the consideration for the sale, Hornby said it would acquire back 1,526,627 company shares that Lyndon Davies holds for £1.

As at market close on November 4, these shares have a value of around £0.28 million at the mid-price of 18p.

Neil Sachdev, Hornby non-exec chairman, said: "On behalf the board, I would like to thank Lyndon for his commitment to, and support of, Hornby in various roles over the last 7 years. He has been a passionate member of the board, and we wish him well with Oxford Diecast in the future."