The firm, currently listed on the main market, said the switch to Aim, which is subject to shareholder approval, would help to reduce costs.
Hornby also said it is unable to raise sufficient funds from investors because it can cannot afford to publish a prospectus – a document not required on Aim.
However, it today announced plans for a £15 million share placing to reduce its reliance on debt facilities.
The move came as Hornby posted an underlying pre-tax profit of £1.6m for the year to 31 March, compared with a £1.1m loss a year earlier, on revenues 13 per cent higher at £58.1m.
Chief executive Richard Ames said: “I am proud of what we have achieved during this phase of Hornby’s recovery.
“Next year will be another one of change for the group as we push for further growth. We are now heading in the right direction and the outlook has been greatly improved by the new equity and debt proposals announced today.”