Model train maker Hornby PLC (LSE:HRN) has sold its wholly-owned subsidiary LCD Enterprises, which includes the Oxford Diecast hobby brand, to EKD Enterprises for £1.38 million.
Hornby, which is financially backed by Frasers Group PLC (LSE:FRAS) and counts Mike Ashley as a consultant, framed the disposal as part of the “streamlining of the group's business, enabling resources and investments to be focused on the core brands”.
Oxford Diecast is currently a loss-making business with losses before tax in the last financial year totalling £200,000.
News of the disposal sent Hornby’s share price up by 6%.
Commenting on the sale, Hornby’s non-executive chairman Neil Sachdev said: “Hornby and its family of brands remains world renowned, and rationalising our portfolio in this way presents a more coherent offering to our customers.
“Through consistently adapting to change we will ensure that we are best placed to continue to support our existing customers whilst we create a new generation of hobbyists".