London’s struggling Aim stock market for smaller companies suffered another setback today when one of its highest profile companies, model railway maker Hornby, said it will cancel its listing.
The 124 year old company, which also owns the model car racing brand Scalextric, said the move out of the publicy traded arena was “not taken lightly.”
But it said the change would “improve its decision-making ability” reduce the regulatory burden it faces, and cut costs by around £400,000 a year.
It also said it was “conscious of the limited liquidity of the company's shares on AIM.”
The number of companies listed on London’s junior Alternative Investment Market has fallen from a high of almost 1,700 in 2007 to about 679, the lowest level since 2001, according to research by UHY Hacker Young, the accountancy group.
Hornby is the second company this week to say it is leaving Aim following a similar decision by biotech firm Synairgen on Monday.
It was reported earlier this week that a group of City executives and financiers have drawn up a plan to revamp Aim.
The group, led by former London fintech boss Jon Prideaux, want to rebrand and relaunch the junior index as the ‘Global Growth Exchange.”
A shareholder meeting to approve Horby’s decision has been called for 1 April and requires 75% backing. The board already has the support of its two biggest shareholders investment company Castelnau and investment trust Aurora, which between them hold 69.79% of the stock. Directors with a total of 0.54% of the shares will also back the resolution. If passed the cancellation will take effect on 10 April.
The company said shareholders who wish to remain on the register will continue to receive “information, services and facilities similar to that of a publicly quoted company.”
After the delisting there will be a “matched bargain” arrangement for private share trading and an opportunity to exchange Hornby shares for those in Castelnau.
In a trading update Hornby said it “ remains on track for year-on-year sales growth, despite weaker trading in January and February. Temporary shipping delays have also impacted the company's operations which the company expects will ease in the coming months. “
