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Hornby plc in the UK has made an offer for all the Lima assets, including the Rivarossi, Arnold and Pocher brands. This is in the Italian courts at present and, if successful, the process should be completed by the end of this year. Other offers may be received and considered in that time. Hornby has stated all production will be moved to China where the current Hornby production is. Hornby has also just purchased the Spanish firm of Electrotren. This is likely to be good news for both sides of the pond. Hornby has introduced live steam into an OO scale model of A4 Mallard. Just think what live steam would be in a Rivarossi Big Boy! Mouth watering or what! Below are the two press releases regarding Lima and Electrotren:- The information on this page is updated via a feed from the London Stock Exchange's Regulatory News Service. Hornby PLC - Offer for Lima Assets RNS Number:2324W Hornby PLC 08 March 2004 HORNBY PLC OFFERS TO ACQUIRE CERTAIN ASSETS OF LIMA S.P.A (IN LIQUIDATION) Hornby Plc ("Hornby"), the model and collectables group, is pleased to announce that it has made an offer of Euro8 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 Euro9.2 million (£6.1 million(1)) and Euro7.1 million (£4.7 million(1)), before exceptional income of Euro2.8 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 Euro6.9 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." (1) Based on Euro/£ exchange rate of Euro1.503/£ per the Financial Times, 4 March 2004 -ends- Date: 8 March 2004 For further information contact: Hornby Plc City Profile Group Frank Martin, Chief Executive Simon Courtenay John Stansfield, Finance Director 020-7448-3244 01843-233500 Web: www.hornby.com or: www.scalextric.com This information is provided by RNS The company news service from the London Stock Exchange The information on this page is updated via a feed from the London Stock Exchange's Regulatory News Service. Hornby PLC - Acquisition RNS Number:1528X Hornby PLC 31 March 2004 HORNBY PLC STRENGTHENS EUROPEAN MARKET POSITION WITH ACQUISITION OF SPANISH FIRM ELECTROTREN S.A. Hornby Plc ("Hornby"), the model and collectables group, is pleased to announce that it has acquired the business and assets of Electrotren S.A. ("Electrotren") for a cash consideration of EUR 7.9 million (seven million nine hundred thousand Euros) or approximately £5.3 million* funded from cash reserves. The acquisition will strengthen Hornby's position in its key European markets for model railways and slot car racing products. Hornby's strategy is to enlarge its stable of market leading hobby brands in the UK, Europe and the USA. *Electrotren, based near Madrid (Spain), is the brand leader in model railways in Spain. *Electrotren has been, for the past three years, the exclusive distributor of the Hornby "Superslot" slot car racing system in Spain. For the financial year to 31 December 2003, the declared turnover and profit before taxation of Electrotren was EUR 3.0 million (£2.0 million*) and EUR 0.8 million (£0.5 million*) respectively. As at 31 December 2003, the net assets of Electrotren were EUR 1.9 million (£1.3 million*). Electrotren was founded in 1951 and, until its acquisition by Hornby, has remained under the ownership of the founding Gonzalez family. Electrotren has specialised in the design and production of HO and N gauge model railway locomotives, rolling stock and accessories. These products are marketed in Spain and throughout mainland Europe. Following the acquisition, Pablo and Almudena Gonzalez, the son and daughter of the founder, will continue to be responsible for the day-to-day management of Electrotren. In June 2001, Hornby appointed Electrotren as its exclusive distributor in Spain for slot racing products. Spain is the only major market in the world where Hornby does not possess the rights to market its slot racing products under the "Scalextric" brand. Instead, the brand "Superslot" is used. Since June 2001, Electrotren has succeeded in trebling sales of "Superslot" in Spain and has recently completed the relocation of all model railway manufacturing to China. The Spanish market for slot racing products is one of the largest in the world. Spain also has a strong following for the MotoGP motorcycle race series. Hornby has recently acquired worldwide exclusive rights to produce a range of slot racing motorcycles based on MotoGP. It is expected that the MotoGP range will provide a unique opportunity to increase sales of Superslot products in Spain. Hornby's bankers have indicated that, following the acquisition of Electrotren, they would be prepared to extend the necessary lines of credit in order for Hornby to complete the acquisition of certain assets of Lima S.p.A announced on 8 March 2004, should the offer be accepted, subject to negotiating acceptable facility agreements. The Chief Executive of Hornby Plc, Frank Martin, commented: " We are delighted to announce the acquisition of Electrotren. This will provide a platform to increase our sales of slot racing products in Spain, spearheaded by our recently launched MotoGP range. In addition, the market leading position of Electrotren in the Spanish model railway market will provide a significant platform for sales growth arising from the recently completed move of production to China. In many ways Electrotren is in the same position as Hornby was 3 years ago - the difficult decisions have been implemented, whilst the full benefits have yet to be realised. We are also delighted to welcome Pablo and Almudena Gonzalez to the Hornby team. They will continue to run Electrotren as Managing Director and Operations Director respectively. Over the past 3 years we have formed an excellent business relationship with them and we have every confidence that they will continue to improve the performance of Electrotren over the coming years. Their knowledge of the Spanish market and the wider European market will also be of great help to us as we develop our model railway business outside the UK. " The proposed acquisition of certain assets of Lima S.p.A is also proceeding to plan. If, as expected, we are able to complete the acquisition of the Lima assets later this year, we will be in a position of brand leadership in model railways in Spain (Electrotren), France (Jouef), Italy (Lima/Rivarossi) and of course the UK (Hornby). " Thus, Lima, when coupled with Hornby and Electrotren, will enhance further our continental European presence. Whilst we expect Lima to take some months before contributing positively to earnings post acquisition, we expect Electrotren to contribute positively from the outset. " We have demonstrated in the UK that a brand leading position in model railways, coupled with a strong slot-racing business, provides an exceptionally strong trading platform. We expect to be able to leverage similar positions in the markets mentioned above." * Based on EUR/GBP exchange rate of EUR 1.4996/£ per the Financial Times, 31 March 2004. -ends- Date: 31 March 2004 For further information contact: Hornby Plc City Profile Group Frank Martin, Chief Executive Simon Courtenay John Stansfield, Finance Director Chris Lane 01843-233500 020-7448-3244 Web: www.hornby.com or: www.scalextric.com
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