Hornby has confirmed it has reached a conditional agreement to sell one one of its model vehicle brands, Oxford Diecast, to a company owned by the Thanet firm’s former chief executive.

It says Oxford Diecast lost around £200,000 before tax last year and its disposal is part of its plan to “rationalise” its portfolio of brands.

As a consequence, the brand and its wholly-owned subsidiary, LCD Enterprises, will be sold for £1.38 million to EKD Enterprises.

EKD is itself owned by Lyndon Davies and his family. Davies was former CEO and then chairman of Hornby and continues to serve as a non-executive director of the Margate-based company. He will step down from that role once the deal is complete. He was also previously CEO of Oxford Diecast before it was snapped up by Hornby.

Hornby added: “Oxford Diecast is currently a loss-making business…and is no longer aligned with the core activities of the group.”

Hornby says the move is part of a streamling of its business “enabling resources and investments to be focused on the core brands”.

It remains in the collectable diecast sector through its Corgi brand.

Earlier this year, Hornby confirmed Mike Ashley’s Frasers Group had upped its stake in the firm to just under 9%.

Neil Sachdev, Hornby’s non-executive chairman, said: “On behalf the board, I would like to thank Lyndon for his commitment to, and support of, Hornby in various roles over the last seven years. He has been a passionate member of the board and we wish him well with Oxford Diecast in the future.

“Hornby and its family of brands remains world renowned, and rationalising our portfolio in this way presents a more coherent offering to our customers. Through consistently adapting to change we will ensure that we are best placed to continue to support our existing customers whilst we create a new generation of hobbyists.”