Toy train maker Hornby is looking to get back on track with the appointment of a new chief executive and news that it is considering an investment in the new chief’s old company, despite the problems at its own business showing few signs of abating.
Lyndon Charles Davies will become the 116-year-old company’s new chief executive after majority shareholder Phoenix Asset Management announced last month that it needed a new team to lead its turnround.
Phoenix took control of the group earlier this year, despite opposition from Hornby’s old board.
Mr Davies is the founder and chairman of rival model business Oxford Diecast, in which he remains a majority shareholder. Hornby said it is “exploring the opportunity to invest” in Oxford, and will give more information “in due course”.
Phoenix is hoping to revive Hornby’s fortunes after a series of profit warnings forced the toy maker to repeatedly raise new capital, pushing down the value of its shares down more than 70 per cent.
In June the company said “much remains to be done to return the business to sustainable profit and positive cash generation”, and in a trading update last month Hornby said trading so far this year had been weaker than expected.
Mr Davies will be joined by Tim Mulhall and Simon Kohler – two more industry veterans – as “operational consultants” who will report directly to the new chief, in an effort to “complement the group’s existing management with additional highly experienced model and hobby expertise”.
David Adams, Hornby interim chairman, said:
I am delighted to welcome Lyndon to the board. His obvious expertise in and enthusiasm for the toy and hobby industry will provide the group with experienced leadership for the next stage of our development. Hornby will continue with its turnaround plan and Lyndon is ideally qualified to steer the group through this period.