Hornby Plc ('Hornby'), the model and collectables group, is pleased to
announce that it has made an offer of ?8 million (eight million Euros) or
approximately £5.3 million (1) to acquire certain assets (the 'Assets') of Lima S.p.A (in liquidation) ('Lima') (the 'Offer'). It is intended that the Offer will be
funded from cash reserves and, if necessary, bank debt.
Lima, based in Vicenza and Brescia (Italy), is one of the best-known model
railway companies in Europe. Its brands include Lima, Rivarossi, Jouef,
Arnold and Pocher:
. Lima (HO gauge) features model railway subject matter from a variety of
European countries but with a focus on Italy. In addition, the Lima product
range includes OO gauge models based upon British and Australian locomotives and rolling stock.
. Rivarossi (HO gauge) is a premium brand specialising in Italian and
American subjects.
. Jouef (HO gauge) is the best-known model railway brand in France
specialising in French railway models.
. Arnold (N gauge) focuses on subjects drawn from a number of European
countries.
. Pocher is a premium range of diecast automobile kits.
For the financial year to 31 December 2002, the turnover and loss before
taxation attributable to the Assets was ?9.2 million (£6.1 million(1)) and
?7.1 million (£4.7 million(1)), before exceptional income of ?2.8 million (£1.8
million(1)), respectively. As at 14 July 2003, the net book value of those
assets that are the subject of the Offer was ?6.9 million (£4.6 million(1)).
Prior to its liquidation Lima manufactured all of its products in Europe. If
the Offer is successful Hornby intends to transfer manufacturing to China as it
has transferred successfully the existing Hornby and Scalextric ranges.
Lima went into liquidation during summer 2003. Consequently, pursuant to
Italian law, the Offer is binding on Hornby while it remains possible that the
competent Italian Court may determine not to proceed with the Offer. In accordance with due process, the current shareholders of Lima have on Friday, 5 March 2004 filed before an Italian Court an application for a 'concordato preventivo'. The admission by the competent Italian Court of such procedure requires, inter alia, the approval by the creditors of Lima. The granting of such an arrangement would ensure that Hornby is able to acquire only those assets that are the subject of the Offer without taking on any current or contingent liabilities. The process of approval of the 'concordato preventivo' may take up to 9 months from Friday, 5 March 2004. During this time the competent Italian Court may consider alternative offers. Subject to approval of Lima's creditors and the competent Italian Court and no other offers being accepted, Hornby is confident that the Offer will be accepted and will be able to complete the purchase of the Assets shortly after court approval is obtained.
Hornby will make further announcements as appropriate.
The Chief Executive of Hornby Plc, Frank Martin, commented:
' We are delighted to announce this offer, which, if successful, would form
the platform for our expansion into key European markets and importantly
increase our rate of growth in the USA. Our existing Hornby railway product range is largely restricted to sales in the UK.
' We have demonstrated with our Hornby and Scalextric brands in the UK that
the combination of a model railway brand leader and a strong international slot car racing business can produce excellent returns for shareholders. The
acquisition of Lima will bring model railway brand leadership in France, Italy and a strong position in the USA and other world markets.
' We believe that the primary reason for Lima's difficulties was its
inability to remain competitive, given its high-cost European manufacturing base. By moving production to China we believe that we will be able to return the Lima brands to profitability and generate similar margins in Lima product ranges to those that we have experienced since Hornby moved its manufacturing to China.'
announce that it has made an offer of ?8 million (eight million Euros) or
approximately £5.3 million (1) to acquire certain assets (the 'Assets') of Lima S.p.A (in liquidation) ('Lima') (the 'Offer'). It is intended that the Offer will be
funded from cash reserves and, if necessary, bank debt.
Lima, based in Vicenza and Brescia (Italy), is one of the best-known model
railway companies in Europe. Its brands include Lima, Rivarossi, Jouef,
Arnold and Pocher:
. Lima (HO gauge) features model railway subject matter from a variety of
European countries but with a focus on Italy. In addition, the Lima product
range includes OO gauge models based upon British and Australian locomotives and rolling stock.
. Rivarossi (HO gauge) is a premium brand specialising in Italian and
American subjects.
. Jouef (HO gauge) is the best-known model railway brand in France
specialising in French railway models.
. Arnold (N gauge) focuses on subjects drawn from a number of European
countries.
. Pocher is a premium range of diecast automobile kits.
For the financial year to 31 December 2002, the turnover and loss before
taxation attributable to the Assets was ?9.2 million (£6.1 million(1)) and
?7.1 million (£4.7 million(1)), before exceptional income of ?2.8 million (£1.8
million(1)), respectively. As at 14 July 2003, the net book value of those
assets that are the subject of the Offer was ?6.9 million (£4.6 million(1)).
Prior to its liquidation Lima manufactured all of its products in Europe. If
the Offer is successful Hornby intends to transfer manufacturing to China as it
has transferred successfully the existing Hornby and Scalextric ranges.
Lima went into liquidation during summer 2003. Consequently, pursuant to
Italian law, the Offer is binding on Hornby while it remains possible that the
competent Italian Court may determine not to proceed with the Offer. In accordance with due process, the current shareholders of Lima have on Friday, 5 March 2004 filed before an Italian Court an application for a 'concordato preventivo'. The admission by the competent Italian Court of such procedure requires, inter alia, the approval by the creditors of Lima. The granting of such an arrangement would ensure that Hornby is able to acquire only those assets that are the subject of the Offer without taking on any current or contingent liabilities. The process of approval of the 'concordato preventivo' may take up to 9 months from Friday, 5 March 2004. During this time the competent Italian Court may consider alternative offers. Subject to approval of Lima's creditors and the competent Italian Court and no other offers being accepted, Hornby is confident that the Offer will be accepted and will be able to complete the purchase of the Assets shortly after court approval is obtained.
Hornby will make further announcements as appropriate.
The Chief Executive of Hornby Plc, Frank Martin, commented:
' We are delighted to announce this offer, which, if successful, would form
the platform for our expansion into key European markets and importantly
increase our rate of growth in the USA. Our existing Hornby railway product range is largely restricted to sales in the UK.
' We have demonstrated with our Hornby and Scalextric brands in the UK that
the combination of a model railway brand leader and a strong international slot car racing business can produce excellent returns for shareholders. The
acquisition of Lima will bring model railway brand leadership in France, Italy and a strong position in the USA and other world markets.
' We believe that the primary reason for Lima's difficulties was its
inability to remain competitive, given its high-cost European manufacturing base. By moving production to China we believe that we will be able to return the Lima brands to profitability and generate similar margins in Lima product ranges to those that we have experienced since Hornby moved its manufacturing to China.'
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