Hornby in £8m cash call after losses mount

Model train and car maker Hornby today called on shareholders for an £8 million cash injection to create a smaller, leaner business after it reported a loss of £13.5 million for last year.

New chief executive Steve Cooke said Hornby would concentrate on its major brands, including Scalextric, Airfix, Humbrol and Corgi, cut back 40% of its product range, and improve its service to its core hobby customers.

A share placing and open offer at 27p a share is backed by Hornby’s largest shareholder Phoenix which holds a 29.6% stake. Hornby shares have fallen 65% this year after a series of profit warnings, and dipped another 3p to 29p today.

Sales dropped 4% to £55.8 million in the year to March, although highlights included a boost for models of the Aston Martin DB5 and DB10 from the last Bond film and demand for Flying Scotsman models after the actual train made its run from King’s Cross to York in February.