Hornby has become the latest firm to quit the London stock market after nearly four decades as a public company.
The model train maker will cancel its listing on the junior Alternative Investment Market (AIM) and become a private firm.
Hornby, which is in the middle of a major transformation with the backing of Sports Direct tycoon Mike Ashley, blamed ‘the regulatory burden and cost of maintaining the public quotation’.
The move marks another setback for the City as London struggles to attract initial public offerings while suffering an exodus as companies leave or are taken over.
FTSE 100 giants Shell and Glencore are considering a move to New York while Unilever has chosen to list its ice cream business in Amsterdam.
And research by UHY Hacker Young shows the number of companies on AIM has fallen by 61 in the year to 679 – the lowest since 2001 and down from a peak of 1,694 in 2007.
Departing City: Hornby will cancel its listing on the junior Alternative Investment Market and become a private firm
The report blamed ‘the cost burdens and excessive red tape’. Analysts said Hornby’s need to be listed was dubious as shareholder Phoenix Asset Management has an 82 per cent stake and Frasers Group 9 per cent.
‘Hornby’s decision to delist from AIM is not a damning criticism of the UK stock market,’ said Russ Mould, investment director at AJ Bell. ‘When two shareholders own 91 per cent, it doesn’t make sense to be a listed entity.’
Hornby, which was set up in 1920 and joined the stock market in 1986, said the move would ‘improve its decision-making ability’ and cut costs by about £400,000 a year.
‘The board is well aware of the place Hornby has in the hearts of its loyal shareholder base, and the announcement today is not taken lightly,’ it said in a statement.
Shares in Hornby, whose toy brands include Scalextric and Airfix, fell 26.3 per cent, or 5p, to a record low of 14p.
Hornby also announced that trading was weaker in January and February – but added that it remains on track for full-year sales growth.
It has been hit by shipping delays, but said these are expected to ease ‘in the coming months’.
The firm said in March last year that Ashley would advise Hornby after building up a stake.
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