Hornby to Delist from AIM Market After 40 Years

The iconic model train maker Hornby has announced its intention to delist from AIM, London’s junior stock exchange, after more than four decades as a public company. The move comes amidst increasing regulatory burdens and costs that the company says outweigh the benefits of staying listed.

Hornby, which has been backed by billionaire Mike Ashley through his Frasers Group, has framed delisting as a step to streamline operations. The board argues the decision will improve management’s ability to focus on the business and significantly reduce annual costs by approximately £400,000.

The delisting proposal has already secured backing from the firm’s largest shareholders, Castelnau and Aurora, which hold 69.8 per cent of Hornby’s capital. A shareholder meeting on 1 April has been scheduled to finalise the decision, requiring a 75 per cent majority vote for approval.

However, the announcement has caused concern among smaller investors. Mark Bentley, a director at ShareSoc, criticised the move as unfair to retail investors, highlighting how the company raised £15 million on AIM in 2020. He called for stricter regulatory measures to ensure minority shareholders are compensated through buyouts at market value when companies choose to delist.

Hornby’s shares have dropped significantly over the past year, with their value halving. Following the latest announcement, its share price plunged a further 26.3 per cent to close at 14p, reducing the company’s market capitalisation to just £24 million. Shareholders have been offered an exchange for Castelnau shares as an alternative, enabling them to maintain their investment indirectly through a listed entity.

London’s AIM market has recently faced a wave of delistings, with 92 companies leaving in 2024 alone, reflecting broader challenges for businesses looking to remain publicly traded. Hornby’s management noted that the limited liquidity of its shares and the time-heavy demands of regulatory compliance also factored into the decision.

Hornby, founded in 1901 and based in Margate, Kent, owns several beloved toy brands including Scalextric and Airfix. The company said the decision to delist was not made lightly but was necessary as part of its ongoing turnaround strategy designed to bring stability and future growth.