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Mel_H

Hornby's financial updates to the Stock Market

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You have totally missed the point in what I was trying to say there!

 

The figures I used were just easy numbers to show the principle, not to reflect actual prices in the market.

So, a retailer buys his batch in at trade price, puts a mark up on and sells at his retail price. Some way through selling that batch at his retail price, he breaks even; from then on his sales bring in a profit. Hopefully fairly quickly, as stock laying around costs him money (no income from it, bank charges, cost of providing storage space etc). 

After a period of time, he may decide to introduce a SALE, at a lower retail price, to get cashflow, even clear his stock on the shelf. Anything in that sale is still profit on that batch though.

Every retail organisation does it to a certain extent. Normal business trading.

 

Stewart

 

Sorry for missing your point, having read it again and read the above reply. Using easy numbers makes things look "easy". Harsh reality is just like Hornby, we have to use reallistic figures. The breaking even and then profitability even after reducing items in a Sale which still creates even more profit? Normal business trading in this industry and day and age, managing to stay in business.

Edited by Widnes Model Centre

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There is one way of doing it.

 

If they buy in 10 items at £50 each, (£500) and sell 9 at £75 each. (£675) they have overall made £175 profit with 1 still remaining. They could GIVE it to you and still be in profit!

 

Stewart

You principle holds true but reality is so much more complicated... items can be good ‘uns or bad ‘uns and you have to make the money where you can. Take Rails, they are still trying to sell Windhoff MPV’s at less than half RRP, but in contrast were able to hike the price of their last Ivatt Coronation’s well above RRP because they sold so well. They do this because they have to look at aggregated performance across their entire range, not just at individual item level.

 

I doubt if many sale items are reduced just because the trader is being philanthropic. There is always a business imperative for price reductions - to increase sales volume with the intent of improving profit in the short term (in £, not % margin), or gaining market share, or clearing out poor performing product lines to make way for new stuff, or maybe a competitor has dropped their prices for one of these reasons, and you need to remain competitive.

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I was once involved in organising production runs for spare parts I the automotive industry. It was only after doing this that I understood why spare parts are so expensive. It’s all the overhead, production set up and storage costs that do the damage. Standard production runs are so much cheaper specials.

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Sorry for missing your point, having read it again and read the above reply. Using easy numbers makes things look "easy". Harsh reality is just like Hornby, we have to use reallistic figures. The breaking even and then profitability even after reducing items in a Sale which still creates even more profit? Normal business trading in this industry and day and age, managing to stay in business.

The harsh reality is it’s expensive doing business whatever the trade is your in. Even Tesco have a very small profit margin, I know people will raise an eyebrow but when you consider their turnover against actual profit as a margin in reality it’s small and they have to shift a lot of product to achieve it and they have a lot of resources. So imagine what it’s like for smaller companies with not so many resources and a competive market with fickle customers who’s total spend is discretionary

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Tesco lives on high turnover small margins, as do all other supermarkets and things like petrol stations . On the other hand something like an Antiques shop, or a jewellers has relatively low turnover but much higher margin. Between them is a whole range. There is no way a model shop can be compared to Tescos

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There is no way a model shop can be compared to Tescos

I think that was the point.

 

Some enthusiasts seem to expect grocery chain-level discounting and pricing in their model railway items.

Edited by Ozexpatriate

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Tesco lives on high turnover small margins, as do all other supermarkets and things like petrol stations . On the other hand something like an Antiques shop, or a jewellers has relatively low turnover but much higher margin. Between them is a whole range. There is no way a model shop can be compared to Tescos

 

Going back to previous comments about cashflow, one big advantage that supermarkets have is that they are generally paid for things they sell long before the supplier has to be paid. So cashflow isn't the problem it can be for a lot of companies.

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This applies to anything you buy in pieces "parts" go to your local car dealer and buy a engine, gearbox and clutch and it will add up to more than half the cost of a new car, or buy a new motor for a Dyson on line and pay about 45% of the complete new unit price. Like it or not that's the going rate.

 

Quite so. Again what quite a few folk on here (and in the wider modelling community) completely fail to appreciate that when it comes to consumer goods - be they childrens toys, motor cars, clothes or model rails - manufacturers DO NOT WANT US TO REPAIR THINGS! They want to sell us brand new products - not bits to keep old ones going. Hence many will frequently make spares difficult to get hold of or so awkward to fit that 'buying a replacement', particularly one with 'upgrades' of some form. In this they are aided by batch production methods which makes it very expensive / awkward to 'go back and make some more / make some spares' outside of the main production batch.

 

Its no good whinging to Hornby about this change - as a business, particularly one listed on the stock exchange, they are obliged to follow current business thinking - which is admiralty ultimately unsustainable in the long run (but longer than the lifespan of most decision makers lives so they don't care) in terms of waste produced, natural resources consumed and energy requirements.

 

People who don't like this state of affairs need to look long and hard at their own voting choices over past decades as ultimately business behaviour is shaped by international trading regulations / Tariffs etc - and its not rocket science to see that if you elect political parties on a pro 'liberalisation of trade' / 'pro globalisation agenda' / low tax agenda then business will arrange itself in the way it does today.

 

Going back to Hornby and spares, I note that if the primary reason for Chinese assembly is low wage costs, then employing someone in the UK on UK wages to try and undo the Chinese handiwork (preferably without breaking the bits you are trying to remove) won't come cheep. Hence the 'high prices' Hornby charge for spares is not exactly hard to understand by those who truly appreciate the realities of business in the 21st Century.

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I think that was the point.

 

Some enthusiasts seem to expect grocery chain-level discounting and pricing in their model railway items.

Exactly

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I think Hornby and model railways in general are pretty good on the spares front. We are a 'make do' type market.

 

By contrast I needed to change the control board on my gate opener, it was 3/4 of the price for a complete new one! Half the price if you brought a board that was a repaired one. The problem with that for a business is when they don,t provide affordable spares, they are then at risk of me going elsewhere and buying a complete gate opener which is half the price of what my existing model costs when new.

 

For trains, if we can,t fix our favourite models because the manufacturer ceases to supply them, there are plenty of cottage industries out there.

Edited by JSpencer
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I think that was the point.

 

Some enthusiasts seem to expect grocery chain-level discounting and pricing in their model railway items.

 

Although Hattons used to do exactly that - very small margins but high turnover on many r-t-r items.  Fortunately that sort of distortion has largely vanished from the model retail scene after distorting it for many years and giving purchasers a very distorted understanding of retail prices which still lingers.

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I think that was the point.

 

Some enthusiasts seem to expect grocery chain-level discounting and pricing in their model railway items.

 

 

Only some ?????

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For spare parts there is always ebay.

 

It’s the boneyard of our hobby, and everything always ends up there at some stage.

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For all the panic on the stock market... it’s failed to awake let alone scare the zombie.

 

Hornby shares are unmoved today.. literally, with so far no trading in these shares..at all... up nor down.

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I think a Dragon should step in and buy Hornby up

AKA Peter Jones . He as done wonders for Jessops.

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For all the panic on the stock market... it’s failed to awake let alone scare the zombie.

 

Hornby shares are unmoved today.. literally, with so far no trading in these shares..at all... up nor down.

 

It's not very surprising when the large majority of shares is held by one controlling party, i.e. Phoenix.  There are not many shares available to be traded so who is likely to be panic buying or selling?

Edited by Riddles
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I've been in the NRM both yesterday and today. Regular visitors may be aware that the tunnel between the two main halls has a display of Hornby models. Yesterday it was in place. Today:

 

post-22698-0-37389300-1518531512_thumb.jpg

 

Either:

A) Hornby's supply chain issues have got such that they've needed to recall items on loan to the NRM to fill gaps in their warehouse

B) things are so desperate at Hornby Towers that they're selling anything they can

C) NRM is feeling the pinch and needs some more revenue itself

D) this presages a refurb of a fairly gloomy passageway..

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I've been in the NRM both yesterday and today. Regular visitors may be aware that the tunnel between the two main halls has a display of Hornby models. Yesterday it was in place. Today:

attachicon.gifIMG_1707.JPG

Either:

A) Hornby's supply chain issues have got such that they've needed to recall items on loan to the NRM to fill gaps in their warehouse

B) things are so desperate at Hornby Towers that they're selling anything they can

C) NRM is feeling the pinch and needs some more revenue itself

D) this presages a refurb of a fairly gloomy passageway..

Or..

E. The cabinet has joined the national collection and is awaiting conversion back to Triang Livery

F. New range of invisible models

G. It’s fake news.. the cabinets are full and the picture was taken in China 3 years ago.

 

Any advance on that ?

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Or..

E. The cabinet has joined the national collection and is awaiting conversion back to Triang Livery

F. New range of invisible models

G. It’s fake news.. the cabinets are full and the picture was taken in China 3 years ago.

 

Any advance on that ?

 

H) They are in number 10 attending a Cabinet Meeting.

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Or..

E. The cabinet has joined the national collection and is awaiting conversion back to Triang Livery

F. New range of invisible models

G. It’s fake news.. the cabinets are full and the picture was taken in China 3 years ago.

Any advance on that ?

I think they’ve donated it to the Swanage Railway who will restore them to running condition Edited by Legend
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I) They've been de-accessioned to make space for some coffee vending machines. (Mallard next up to go; it's being replaced by a Pizza Bistro by the turntable, whilst a cocktail bar is being fitted inside the Dynamometer Car).

Edited by County of Yorkshire
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I) They've been de-accessioned to make space for some coffee vending machines. (Mallard next up to go; it's being replaced by a Pizza Bistro by the turntable, whilst a cocktail bar is being fitted inside the Dynamometer Car).

Having had the pizza in the Great Hall earlier, any upgrade to the catering would be very welcome. It was an authentic BR catering experience...

 

We have wood fired ovens. Why not convert Mallard's fire box to a coal fired pizza oven? Would be quite something! Sure it will upset a few people but its the best chance the old girl has of getting a fire inside her. Smoke out the chimney would help for photos and hot water from the boiler could be used for making tea and any steam to make lattes!

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