Model railway maker Hornby (LON:HRN) unveiled plans to move to the AIM market and to raise £15mln to pay down debt as it moved into the black.
Hornby, which makes Scalextric, Airfix models, Humbrol paints and Corgi die cast models, as well as model trains, said a move to AIM would provide a market and trading environment more suited to its scale and strategy.
"AIM has the benefit of lower transactional costs, reduced ongoing costs and simpler administrative and regulatory requirements that are more appropriate to the company's size," it said.
Hornby also said it had secured £15mln of new equity funding through a placing of 15,789,474 new shares at 95p each. It plans to use part of the proceeds to repay part of its existing bank debt.
The group has previously faced supply problems and has been reducing reliance on a single Chinese supplier to do more manufacturing with other Chinese companies and in India and the UK.
It said on Thursday that the changes were paying off as it announced an underlying pre-tax profit of £1.6mln in the year to the end of March against a loss of £1.1mln a year ago.
At the after-tax level, losses narrowed to £100,000 from £4.4mln a year ago.
It said delivery rates from suppliers had improved to 93% from 59%, with a rate in its model railway business of 85%.
There had been significant improvements in volume and quality of products from Far East vendor partners.
The group has also opened a new warehouse and distribution facility in Hersden, Kent, run by DS Logistics, and moved its head office to Sandwich in Kent from Margate.
Chief executive Richard Ames said: "We are improving product deliveries and quality from our supply chain and I remain confident the turnaround plan will continue to achieve further improvements.
"We are now heading in the right direction and the outlook has been greatly improved by the new equity and debt proposals."
Shares in Hornby fell 6.12p to 93p in mid-morning trading in London.