HGL stops toying with investors; exits model car business
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Diverse investor HGL Limited is exiting the toy car business, this week announcing the sale of its model car business to focus on its core portfolio.
HGL (ASX:HNG) will sell Perth-based Biante Model Cars to an Australian collector for about $3.3 million, pocketing $2.6 million after costs.
Biante sells small-scale replicas of Australian V8s, sports cars and classic vehicles that fetch up to $320 each.
Last year the model car business — founded about 20 years ago — recorded a $1.8 million drop in sales, resulting in a $200,000 loss before tax.
Biante projected future sales of more than 35,000 cars for the next 12 to 18 months but HGL opted to focus on its other businesses including building products, medical devices and work uniforms.
HGL shares were unmoved at 48c on Monday, valuing the company at $27.5 million.
This is the first divestment for the company, with more potentially on the cards.
Results of a review of its Leutenegger craft and needlework brand are imminent, after its performance was blamed for an increase in cash outflows last year.
For the year to September 30, the company made $2.7 million, down from $4.3 million the year prior.
It had $4.3 million left in the bank at the end of September.