Hornby CEO Steve Cooke to step down

AIM-listed model train set maker Hornby said on Monday that chief executive Steve Cooke will step down at a date to be agreed following the increase in Phoenix UK Fund's stake in the business, which has led to a strategic review.

Cooke, who joined the company in June 2015 as chief financial officer, will stay on in the role for a transitional period.

Interim chairman David Adams said: "The position of Phoenix as Hornby's majority shareholder represents a new chapter in the development of the group and the board is working closely with Phoenix to set the direction of the business going forward.

"The board would like to thank Steve Cooke for his huge contribution to the group, in particular his leadership of the first stage of the turnaround that was announced to the market last year. We are delighted that Steve has agreed to remain in the post and effect an orderly transition to the appointment of the new CEO."

Hornby said the decision for Cooke to leave had been "mutually agreed".

Phoenix UK Fund made an offer of 32.375p per share for Hornby back in June, upping its stake to 55% and triggering a mandatory cash offer for the entire company.

Hornby said that the offer, which values Hornby at a £27.4million, "significantly undervalues" the company.

Last week, Hornby warned over its full-year performance as trading in the financial year to date has been behind the board's expectations due to increased competition and weaker demand over the summer.

In an update ahead of its annual general meeting, the company highlighted softer market demand over the summer months and increased competition in the important UK independent channel. In addition, as previously indicated, it pointed out that some new product releases have shifted to the second half of the year and there has been a reduction in the amount of promotional activity and discounted stock being offered to the market, which was a feature of the comparative period last year.

Trading this year was expected to be more heavily weighted to the second half due to the timing of the new product releases and significant stock reduction in the first half. While it still has the key Christmas trading period ahead, Hornby cautioned that "there is a risk that the shortfall in performance to date may not be fully recovered over the remainder of the financial year".

At 1030 BST, the shares were down 6.4% to 27.38p.