Model train maker Hornby PLC (LON:HRN) has unveiled a City fundraiser that will bring in up to £15mln to be used reinvigorate its key brands.
The owner of Airfix, Meccano and Scalextric said new shares in the firm would be sold in a placing and open offer at 36p each, the price at which the stock closed on Thursday.
As well as being used to provide the main brands with a boost the new funds will also be invested in digital marketing and to provide the business with the “flexibility to invest in growth opportunities”.
The cash call has the backing of the company’s two main investors, Phoenix Asset Management Partners, and Artemis Investment Management, who between them own 90% of the business, which has endured a rocky five years
It's last results – interims covering the six months ended September 30 – pointed to the need for a financial injection as Hornby revealed it had just £769,000 in cash and around £5mln utilised in operations.
As at the period-end, Hornby held almost £15mln in inventories, while trade and receivables -(the money owing to the company) were £7.7mln.
In Friday’s announcement, Hornby confirmed its chief executive Lyndon Davies and Catherine Davies have committed not to offload the 51% stake LCD Enterprises Hornby doesn’t own until 2023 at the earliest. LCD owns Oxford Diecast Group.