Portfolio

Hornby buying remainder of LCD Enterprises from its own CEO

By Josh White

Date: Friday 30 Jul 2021

Hornby buying remainder of LCD Enterprises from its own CEO

(Sharecast News) - Models and collectibles company Hornby has acquired the remaining 51% of LCD Enterprises which it did not already hold, it announced on Friday.
The AIM-traded firm said it bought the holding from its own chief executive officer Lyndon Davies and his wife Catherine, who together owned the remaining stake.

It said LCD holds majority interests in the Oxford Diecast Group, which supplies diecast model vehicles and railway products to the collector, gift and hobby markets in the UK, Hong Kong and North America.

In December 2017, Hornby completed the acquisition of 49% of LCD, for consideration of £1.6m in cash.

Following that, in February 2020, it entered into the amendment and restatement agreement, under which the LCD sale and purchase agreement was amended and restated so that the end of the lock-in period relating to certain rights of the company and the Davies was extended to 8 December 2023, being the sixth anniversary of completion of the initial LCD acquisition.

Hornby said on Friday that it had now agreed to acquire the remaining 51% of LCD for total cash of £1.3m, to be funded from cash in the bank.

For the financial year ended 31 December, LCD reported a net profit after tax of £0.2m, and at the time the acquisition completes, it was expected to have total assets of £5.1m, and liabilities of £2.4m, resulting in unaudited net assets of £2.7m.

The group said it would acquire LCD's inventories and other assets, as well as liabilities including an outstanding loan amount owed to Lyndon Davies totalling £0.6m, which it would settle on acquisition.

"The company believes that the Oxford Diecast Group's portfolio of brands and industry knowledge are complementary to its existing brand portfolio and that opportunities exist for the two businesses to work collaboratively together to grow both businesses," the Hornby board said in its statement.

"The group is well placed to leverage the value of the LCD inventory and to further develop the brand's intellectual property, which includes a range of scale models that complement the Hornby product ranges."

At 0921 BST, shares in Hornby were down 3.1% at 45.06p.

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