Hornby Regulatory News (HRN)

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