1andrew1

Thanks for that informative post, Gallows-Bait. It seems the core question is can the company hang on to Kader House long enough for an upturn in the Hong Kong property market without damaging its core business too much? And that upturn might depend on Hong Kong finding a new role now for itself as it becomes more integrated into China and its position as the financial gateway into Asia is challenged by other countries. As Kader is family controlled despite a stock market listing, I can understand why it hasn't cut its losses and sold the building. Until then, the model railway business has its arms tied behind its back a bit although the UK arm still seems to get investment...at the moment.

Really enjoyed reading your post. Thank you for sharing your insights, really helpful I would be interested to hear your take on Kader/Bachmann. Their issue seems to be on the property side.

I guess you try and target different markets (geographic, types of retailer, types of purchaser) and bundle or unbundle it. And perhaps try and influence buying patterns by making it more desirable through promotion and advertising?

I think this is hard to determine from the limited publicly available information available. I don't think Kader states its external customers' names anywhere nor breaks down revenue from external brands. I suspect its minimal as with production capacity constraints, it makes sense to focus on its own brands.

Good point that the operations made a marginal profit last year but if you just include the finance costs it still made a loss. The company as a whole made a loss due to four things: Finance costs Share of losses from associates Impairment loss from loans to an associate Deficit on revaluation of investment properties

Worth comparing Kader's losses with Hornby's - Kader's turnover £38.20m, generated a £7.5m loss - Hornby's turnover £55.1m, generated a £5.9m loss Kader does own property so has a backstop although that's mainly in Hong Kong which is not performing amazingly at the moment.

Agreed but they've been going in the US for a lot longer and I thought that would be their largest market. Credit to their European/UK presence for being bigger.

Bachmann's parent company Kader published its 2023 results last month. I think it's interesting to see that Europe (including the UK) is Kader's largest market, that it continues to be loss-making (last profitable year was 2018) and that permanent staff numbers have been reduced by a fifth. Until I looked at the accounts, I would have expected North America to be its largest market. 2023 £38.20m turnover £7.5m loss 2022 £36.09m turnover £8.7m loss Notes Europe accounts for 46% of income, US 39% Rental income represented approximately 13% of the Group’s revenue for the year. Full-time staff numbers reduced from 1,009 in 202 to 817. Source: https://www.kader.com.hk/investor_relations/pdf/press_240327_2e.pdf (HK $ converted to GB £)

Question for me is how PlayTrain's 00 gauge offering fits into this? It encourages owners to upgrade to a proper OO model railway as their existing trains can run on it.

I guess success here would be both where these locos operated in Europe and the popularity of TT120 in those countries. France might be logical for the class 20s, 58s and Eurostar but TT120 is not really a thing there as far as I know.

If Hornby does retain Oxford Rail, would it make sense to direct that brand to focus its efforts on TT120 as well? Maybe it could play to its strength in wagons?

There has been a change of management since TT120 was launched. Plus, we don't know what resources Hornby have. eg if a designer targeted to do GWR wagons has left Hornby, then the company may decide to realign its pipeline.

This is the day's share price graph: https://www.Hornby.plc.uk/share-price-graph/ Hornby plc opened the day at 38p, went up to 40p at 10am and again at 11am and now 37.33p (4.15pm)

The signals and level crossing looked good and better than their 00 Hornby counterparts. Understandable as the 00 ones must be 40-50 years old.

Just missing the Azuma...