Hornby acquire 25% of Warlord

[CUCKOO LINE]

RNS Number : 3280F

Hornby PLC

07 July 2023

 

 

7 July 2023

Acquisition of a Minority Interest In Warlord and Extension of Loan Facility

 

Hornby Plc, the international models and collectibles Group, is pleased to announce that it has acquired a 25% share in Warlord Games Limited ("Warlord"), based in Nottingham, for cash consideration of £1.25 million.

Hornby has the option to acquire a majority stake in Warlord on or around the second anniversary of this initial acquisition and then to acquire any remaining shares in Warlord on future anniversaries.

Warlord was founded in 2007 by two former Games Workshop employees and is now one of the world's leading producers of principally historical tabletop wargames, miniatures and accessories. Warlord hold the licences to produce games and miniatures for the much-loved TV series, Dad's Army and the galaxy's greatest comic, 2000 AD.

Warlord manufactures primarily in the UK and sells to over 600 distributors and stores around the world via their sales teams in the UK, Europe and the Americas. Warlord also operates a successful direct-to-consumer operation via their website: https://warlordgames.com.

Warlord will continue to be managed by its existing Directors and the Company believes that this transaction creates a number of opportunities to accelerate growth of the business further still.

Olly Raeburn, CEO of Hornby, said, 'We are absolutely delighted to be able to join forces with Warlord Games, whose business we have always admired. We very much look forward to working with the team there to maximise the potential of the business and use their significant experience and expertise for the benefit of the wider Group.'

John Stallard, CEO and founder of Warlord, said, 'We are very much looking forward to working closely with Hornby as we have been big fans for many years. We see this as a huge opportunity to continue to build Warlord long into the future, as well as to contribute in any way we can to the future success of Hornby and its stable of iconic brands as there are innumerable opportunities and synergies in sales, marketing and production.'

The acquisition is being funded by an increase in the Phoenix loan as detailed below.

Loan Facility

 

Phoenix UK Fund Limited, the Company's subordinated lender, has agreed an extension to the term and the amount of its existing secured credit facility (the "Facility").

 

The Facility is being extended from £9 million to £11.25 million and the term extended by 12 months to 31 December 2024. Other than the extension to the loan term and amount, the terms of the Facility remain unchanged.

 

All advances made under the Facility become due and payable in December 2024 with interest charged at 5 per cent. plus SONIA on funds drawn and the higher of 1 per cent. or SONIA on undrawn funds.

 

The Company will have the option to draw down on these funds to capitalise on the positive momentum in the business and increase investment in our future development plans. In addition, the extension is in order to fund the acquisition of Warlord as set out above.

 

 

 

Related Party Transaction

 

Phoenix Asset Management Partners Limited ("PAMP") is interested in 121,662,481 ordinary shares of 1 pence each in the Company, representing 71.63 per cent. of the issued share capital of Hornby. Given that PAMP manages Phoenix UK Fund Limited, a substantial shareholder in the Company, the extension of the Facility is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

 

The Independent Directors consider, having consulted with Liberum Capital Limited, the Company's nominated adviser, that the extension to the size and term of the facility is fair and reasonable insofar as the Company's shareholders are concerned.

 

 

-ends-

 

Enquiries:

 

Hornby plc

Olly Raeburn, CEO                    01843 233 500

Kirstie Gould, CFO

 

Liberum Capital Limited, Nominated Advisor and Broker

Andrew Godber                           020 3100 2222

Edward Thomas

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END

 

 

ACQNKOBPABKKQOK

[34theletterbetweenB&D]

I read that as 'acquire 25% of Watford'. 

 

Virtual 'Battlespace' range revival?

[stonesboy]

Interesting they went for Warlord as I understand that they are 25mm or 12 mm scale figures so won’t fit in with the Hornby OO scale.

[009 micro modeller]

Just now, stonesboy said:

Interesting they went for Warlord as I understand that they are 25mm or 12 mm scale figures so won’t fit in with the Hornby OO scale.

Isn’t 25mm scale roughly right for 00? I don’t quite understand how wargaming scales work but aren’t they based on the height of a figure or something? Obviously they’re not mm/ft like model railways.

[melmerby]

Some info here:

https://wargameexplorer.com/post/what-scale-are-miniatures-in-wargames/

[009 micro modeller]

9 hours ago, melmerby said:

Some info here:

https://wargameexplorer.com/post/what-scale-are-miniatures-in-wargames/

Thanks. That’s helpful but it does suggest that the actual scale is potentially quite vague.

[phil_sutters]

9 hours ago, 009 micro modeller said:

Isn’t 25mm scale roughly right for 00? I don’t quite understand how wargaming scales work but aren’t they based on the height of a figure or something? Obviously they’re not mm/ft like model railways.

25mm figures are too big for 00. 20mm figures are the nearest wargames figure size. They are generally used with 1/72nd military vehicles. Different manufacturers' wargames figures can vary considerably in their height, degree of detail and 'chunkiness'. I haven't looked at examples of ranges available recently. There was a time when I painted and collected a large number. One couldn't make convincing units by combining figures from different manufacturers.

Mind you, until recently, the same could be said to some extent about 00 scale railway figures. Compare Andrew Stadden, Langley and Pete Goss figures and you would find totally different styles of reproduction of the human form! The arrival of scan & 3D print figures has created much more uniformity. It is hard to distinguish between Scale3D, Modelu and Hardy's figures. The last range is now being discontinued.

Edited July 9, 2023 by phil_sutters

[spamcan61]

9 minutes ago, 009 micro modeller said:

Thanks. That’s helpful but it does suggest that the actual scale is potentially quite vague.

I don't think wargaming is meant to be scale modelling in the same sense as Hornby or Airfix indeed I don't see much common ground with existing brands here, presumably that's the point, spreading the riisk.

 

 

Edited July 9, 2023 by spamcan61

[PeterStiles]

Warlord do _28mm_ figures and 12mm.

 

28mm are about 1/53 and the 12mm about 1/100 ish.

 

Some of the. 12mm stuff would look ok on a TT120 layout...

 

This feels like a solid bit of Investment and Diversification - Warlord's USP are the quality wargaming rules, used by a good percentage of the wargaming community and popular in many countries. I also prefer their webstore to Hornby's :)

[Kris]

This just looks like brand diversification which hopefully will be a good thing in the long run. The main links I see are the knowledge of the hobby market and Hornby's existing brand of Airfix. 

[Guest]

Getting a toe hold in the war gaming market would seem like a logical expansion of Hornby’s brands. Given that the rival Games Workshop have their GW & Warhammer stores in town/city centres, then there’s possibly a view here too towards widening the appeal of whatever retail plans Hornby have. 

[Fair Oak Junction]

Oh marvellous, another fantastic brand Hornby can eventually get a majority stake in and run into the ground! 🙄

And then bang goes the biggest player in the non-Warhammer wargaming market.

Seriously Hornby? Can you please not try to ruin all the hobbies I like?

[stewartingram]

I read this as another diversion into an irrelevant subject (to Hornby), much like the Olympics fiasco. Sign of the new breed of management?

Edited July 9, 2023 by stewartingram

[Mark Dickerson]

19 minutes ago, stewartingram said:

I read this as another diversion into an irrelevant subject (to Hornby), much like thOlympics fiasco./ Sign of the new breed of management?

One might almost say They're doooomed. 😏

 

(Note the IP licences. No, not Dredd.)

[Widnes Model Centre]

Warlord Games already had ties with Hornby. They produced the Airfix War Gaming set, Blood Red Skies, been on sale for some time.

In stock at Airfix, £69.99 or from Warlord Games, £25. Available elsewhere for less. 

[Bucoops]

1 hour ago, Mark Dickerson said:

One might almost say They're doooomed. 😏

 

(Note the IP licences. No, not Dredd.)

 

Who do you think you are kidding?

 

2 hours ago, 009 micro modeller said:

Thanks. That’s helpful but it does suggest that the actual scale is potentially quite vague.

 

Should fit in well - OO is pretty vauge.

[Mark Dickerson]

2 minutes ago, Bucoops said:

Who do you think you are kidding?

[Don't tell him, Pike!] Quite. After Only Fools and Horses, I can see Hornby getting a bit WW2 - and why do miniatures necessarily have to be military?

[The Stationmaster]

Interesting comments some of which are irrelevant when talking about different scales etc - Warlord itself is in a different market area so it represent diversification into a cash positive company.  So owning 25% of it will contribute money to Hornby's bottom line which also makes logical the way in Phoenix are bankrolling the acquisition.  Provided Hornby don't try to manage the company then it will hopefully continue to be a profitable concern.

 

But why among all these remarks about scales etc has everybody missed (apart from mention of Airfix) the potentially  obvious complementary connection between Warloard and another Hornby group brand?   It took me only a few minutes to find that Warlord are the owners of Skytrex

 

https://skytrex.com/collections/oo-gauge

[Tim Dubya]

1 minute ago, The Stationmaster said:

It took me only a few minutes to find that Warlord are the owners of Skytrex

 

Now that makes perfect sense 👍

[Guest]

8 minutes ago, The Stationmaster said:

Interesting comments some of which are irrelevant when talking about different scales etc - Warlord itself is in a different market area so it represent diversification into a cash positive company.  So owning 25% of it will contribute money to Hornby's bottom line which also makes logical the way in Phoenix are bankrolling the acquisition.  Provided Hornby don't try to manage the company then it will hopefully continue to be a profitable concern.

 

But why among all these remarks about scales etc has everybody missed (apart from mention of Airfix) the potentially  obvious complementary connection between Warloard and another Hornby group brand?   It took me only a few minutes to find that Warlord are the owners of Skytrex

 

https://skytrex.com/collections/oo-gauge

 

Interesting comment on their website here:

“In addition, we provide a comprehensive subcontracting service, from mould-making to production in both white metal and resin.”

[Hroth]

2 hours ago, Gatesheadgeek said:

 

Interesting comment on their website here:

“In addition, we provide a comprehensive subcontracting service, from mould-making to production in both white metal and resin.”

 

So an interesting entry into getting ranges of figures made for 4mm and 2.5mm scales.  I wonder who made Hornbys whitemetal Steampunk figures?

 

[1andrew1]

Looks a logical acquisition to me with potential synergies down the line on procurement and distribution.

 

Games Workshop has stood out as a thriving British hobby brand so trying to get into that market makes good sense to me.

[PeterStiles]

45 minutes ago, 1andrew1 said:

Games Workshop

Yup,

Hornby wishes it had the share price, turnover or profit the GW has...

[Ravenser]

22 minutes ago, PeterStiles said:

Yup,

Hornby wishes it had the share price, turnover or profit the GW has...

 

 

I(t's rather difficult to prove that they've modelled an orc or a Paladin incorrectly 

[PeterStiles]

49 minutes ago, Ravenser said:

an orc or a Paladin

Given that, these days, GW sculpt Orruks and Stormcast Eternals, instead I feel I must agree.

 

Warlord, however, specialise in historic wargames... Napoleonic wargamers are even bigger nit-pickers for accuracy than any member of the Brotherhood Of The Counted Rivet...