Shareholders owning around 20% of Hornby Plc (LON:HRN) are pushing for the hobbies firm’s executive chairman Roger Canham to be removed as a director of the under-pressure company to be replaced by the former chairman of carpets firm Victoria PLC.
In a statement published today, Hornby said it had received a letter requisitioning a general meeting on behalf of ROY Nominees Limited and HSBC Global Custody Nominee (UK) Limited), which together represent around 20% of the company’s voting rights.
The firm said the meeting is being called to consider whether Canham should be removed and replaced by Ian Alexander Anton with immediate effect.
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The group said it currently intends to hold such a meeting and advised shareholders to take no further action at this time.
In a statement, Anton - currently chairman of surplus property adviser Legacy Portfolio - said: “The last five years under Mr Canham have been disastrous for Hornby’s shareholders. I believe it is time for new leadership as, in my experience, positive change nearly always requires fresh perspective.
“I am confident that Hornby’s fortunes can be turned around and value can be created for shareholders if changes are made.
“Now is the time to act otherwise shareholders face further losses. I ask shareholders to vote in favour of the proposed Board change.”
The Legacy Portfolio statement noted that Anton has been joined in the action by New Pistoia Income Limited, Hornby’s second biggest shareholder with a 20% holding.
It said: “Anton and New Pistoia believe that the current strategy is ineffective, will continue to destroy value and is not aligned with creating wealth for all shareholders.”
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Legacy's statement added: “Furthermore, Mr Anton and New Pistoia believe that the control currently exerted over the Company by the Company’s largest shareholder, Phoenix Asset Management, with 34% of total shares in the Company, where Mr Canham is also Chairman, is not in accordance with principles of good corporate governance and therefore is not in best interests of the wider shareholder base.”
It continued: “Following discussions over the course of a number of months with Phoenix and the Company that have ultimately proved fruitless, Mr Anton and New Pistoia have found no alternative but to request that a General Meeting is called to raise and discuss his proposal with all shareholders.”
And concluded; “Mr Anton has a strong track record in addressing challenging corporate issues and forcing through positive change at underperforming businesses.”
Canham stepped up to become Hornby’s executive chairman in February 2016 after the firm’s chief executive officer, Richard Ames quit in the wake of a profit warning that sent the shares tumbling by 60%.
Two months later, Hornby appointed finance director Steve Cooke as its chief executive but Canham retained the executive chairman role, although the firm said that he would resume his previous non-executive chairman role by the end of the year, although this has yet to happen.
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The move comes with the model railways to Airfix kits and Scalextric slot car racing firm slowly making a turnaround after a major restructuring by the new management.
Last Friday, Hornby said its full-year revenue performance was slightly ahead of its plan, with the fourth quarter “showing an improving trend” and the group moving into a net cash position.
However, the group pointed out that the year to March 31 2017 was one of transition and, as previously stated, the firm was loss-making during this period, in line with its expectations.
In a previous trading update, released on February 7, Hornby had said that its full-year revenue is expected to decline by 20% to 25% year-on-year.
It had added that group revenue was down 25% over the Christmas period, with UK revenue falling 21% due to its move to slim down its product range and exit concession arrangements in the UK.
In late morning, Hornby shares remained 1.5%, or 0.5p higher at 33.5p, having gained around 6% on Friday.
-- Adds Legacy Portfolio statment, updates share price --