It’s been far from full steam ahead for Hornby of late, but it got a boost today. Shares soared 33% to 32.7p by lunchtime after deflated CEO Richard Ames announced he was stepping down. Investors won't be cracking open the Scalextric to celebrate just yet though - there's still a long way to go to recover from the 77% plunge the shares took last week.
The firm, which owns the Airfix and Corgi car brands, has had a torrid time recently. Profit warnings came thick and fast (three in five months) and the company admitted it risked breaching a lending agreement with its bank. Hornby has around £9m of net debt, with all the outstanding loans at Barclays. Breaking a banking covenant is serious business with serious consequences so the picture's undeniably bleak.
If anything it’s a surprise Ames held on so long – in November Hornby said it expected to make a pre-tax loss of £2m in the year to March 2016, compared to a £1.14m loss in 2015. A week ago, a more dire announcement warned of an underlying pretax loss of between £5.5m and £6m.