DJM, the end.

[letterspider]

13 minutes ago, Colin_McLeod said:

 

About the £250 none of us ever expected it back so none of us is short of planned cash.  What we expected was to have to pay another £750 and then get a model train in return.

 

Substitute appropriate figures for the King and the 92.

 

The model train will not now appear but our cash box is £750 better off.

 

The point I am making is that none of us have suffered a cash problem because of the collapse of DJmodels, unlike Dave who presumably had reckoned on getting back the much larger sums of money he invested in the company.

 

Just saying this to put relative "losses" in perspective.

 

He certainly invested time but surely the money was invested by the crowdfunders?

Isn't that one of the reasons for the delay in the Class 92 - slow pick up to the the critical number of orders?

 

[Colin_McLeod]

I believe there were other aspects to DJmodels apart from the crowdfunded projects.

 

Anyway my point still stands.  None of the crowdfunders have been put into financial difficulties because of this.

[GWR-fan]

A comment was made regarding the lack of communication and as there is only 24 hours in a day then something had to give.  That is fine if the manufacturer is self funded,  his time is his time.  However, when he is dealing with others' money then he has a social and ethical personal commitment to keep his funders informed on a regular basis,  something he clearly was remiss in doing.   Sporadic updates on his website do not encourage those whose money is funding his dreams and his ego.

 

The third party "explanation" is rubbing salt in the wound and would have been better off not stated as it seems more an excuse and not an explanation of the situation.  The history of the company of recent times seems nothing but tales of woe and misfortune.  Perhaps the owner of the company should look internally at his personality and how it impacts on those around him,  like say a Chinese manufacturing company.  Many other crowdfunder and niche manufacturers seem to have excellent working relationships with their Asian contractors. Dave was a small fish in a big pond trying to make a name for himself in the industry with his multiple intended projects, very few of which even made it to the drawing board.

 

[APOLLO]

Marsh Lane wrote -

 

Quote

 Dave had already commenced proceedings in recent weeks to recover money from the China factory after they failed to produce tooling and stopped responding to contact.

 

"Big problems in little China" I think has a lot to do with this whole sad affair. China is a hard negotiator, and has many problems right now with "The west" - though on a very much larger scale. 

 

Don't forget the unannounced closure of Sanda Kan caused huge problems for Hornby  - and that is a big company with feet on the ground over there. It must be very hard for a one man band such as Dave to do business there - they write the rules.

 

Other American model railway manufacturers are/ have finding it difficult too.

This was written by Jason Shron (Rapido) in 2012, quite a while ago - still relevant.

 

https://www.trainmaster.ch/Y-807.htm

 

There are still problems over there, especially for some smaller US model companies.

 

I think Dave bit off a bit more than he could chew over there.

 

Brit15

Edited June 7, 2019 by APOLLO
Typo

[dogbox321]

2 minutes ago, Colin_McLeod said:

I believe there were other aspects to DJmodels apart from the crowdfunded projects.

 

Anyway my point still stands.  None of the crowdfunders have been put into financial difficulties because of this.

 

The only, good, but unfortunate thing in all this, is at least for the APT and Class 92, no-one had out second installments in.  Hopefully, non of the crowdfunders have been put into financial difficulty, but ultimately its money they could have spend on their family, not done a day or two rest day work for etc..

 

I also think its sad, that the talented owner and enthusiastic promoter of model railways will have many problems from this, and has more than likely potentially left the industry, with such a "black cloud" above him.  Its hardly an enviable legacy. 

 

Also, people offered expressions of interest, which upon viability, then translated into a deposit.  Based on this, the numbers were crunched to make things viable.  If this is true, then the unviability has come from DJ Models short comings - endless delays (lots of companies have delays - i.e Class 90, TEA tans etc.), but virtually everything has been delayed, including announcements which irrespective of blame, have made people "twitchy" to say the least.  Then some have probably thought of wiping out there losses. 

 

I think the final nail in the coffin, was probably another manufacturer announcing a 4mm Class 92, a product DJM had invested heavily (via crowdfunders etc) in research, CAD/CAM etc., and then for the competitor to get to tooling first, would reduce demand whenever DJM's came along.... (like with the Class 71). 

 

Regards,

 

C.

[tomparryharry]

I feel very sorry about the current state of DJM, and I wish the guy well. Apart from the financial angle, he's lost a lot more:- credibility. I'd much rather lose money than credibility. You can make money, but credibility is like quicksilver though your fingers.

 

Building trust with your market, especially a small market such as this, is a narrow path to tread.  Perhaps there is a lesson for a great many people. It's sometimes more remunerative to stack shelves in Aldi , than to answer 50+ pages of **!t on the web. In any event, I'm (sorry to say) some £300-odd better off.  Had DJM had indeed bought the promised 18" austerity to market, I would have bought quite a few more....

 

Have a good weekend, everyone,

 

Ian.

Edited June 7, 2019 by tomparryharry
Sorry! I forgot some bits!

[Ravenser]

19 minutes ago, Colin_McLeod said:

 

About the £250 none of us ever expected it back so none of us is short of planned cash.  What we expected was to have to pay another £750 and then get a model train in return.

 

Substitute appropriate figures for the King and the 92.

 

The model train will not now appear but our cash box is £750 better off.

 

The point I am making is that none of us have suffered a cash problem because of the collapse of DJmodels, unlike Dave who presumably had reckoned on getting back the much larger sums of money he invested in the company. [Emphasis added]

 

Just saying this to put relative "losses" in perspective.

 

Putting this as gently as I can , in a very unhappy situation - one of the key features of the DJM saga is that the part I've emphasised wasn't how it was

 

Dave Jones seems largely to have been playing with other people's money, not his own. The bulk of the financial loss will be born by the hobby at large, not by Dave Jones. That is an unprecedented situation . Normally we can take the view "all very sad , but it's between him and the banks, a private matter, not our concern" - here we can't.

 

I think a target of 400 people was required for the N gauge APT. I don't know the OO figure but it can hardly have been less . At £250 a head, this should have meant the first instalment would have been at least £100,000 if fully paid up (We don't know if it was) - that would imply a £400K total project cost , and some have quoted the cost of doing a complex loco at £250,000, so it seems like a plausible figure

 

For some other projects DJM quoted a target of at least 1000 crowd-funders. RevolutioN have referred to a run of only 1500 units on a crowd-funded project - so again a minimum of 1000 units seems reasonable. At £30 each this means the Class 92 first instalment should have represented £30K in each of OO and N. A similar number might be assumed for the King in N. How much was "invested" on the Class 17?

 

If fully paid up , these models should have represented nearly £200,000 of crowdfunding.

 

Add in a few other bits of crowdfunding/pre-orders and you end up at around a quarter of a million pounds. I really doubt if Dave Jones had invested a " much larger sum of money" than that

 

Perhaps they weren't fully paid up. The amount of outstanding crowd-funding could be anywhere from £100,000 to £300,000

 

The J94 has been around for several years - there were several runs. DJM ought to have recovered their money on it. The Class 71 was crowd-funded - so shouldn't have been an investment by DJM . That just leaves the N Mermaid, of which he was able to sell some.

 

DJM should not have lost money on their consultancy /commissioning work for Kernow and Hattons

 

We don't know what money is left in the company or whether there might be a partial payout. But the hobby as a whole must have lost a sizeable 5-figure sum in this failure , and quite possibly a 6-figure sum.  As the hobby at large are major creditors I presume that we will find out the final scale of the loss at some point, as the liquidators have some duty towards the creditors. We can't simply brush this away as "trivial sums that don't really matter".

 

What matters is that the hobby never sustains another loss like this

[JSpencer]

1 hour ago, woodenhead said:

DJ Models was a limited company therefore Dave's personal liabilities were limited - correct we don't know what banking guarantees he may have had to make for some borrowing but much of his delivered work was for Kernow and Hattons who would have provided the finance.  The J94 and some wagons were not crowdfunded so may have been based on company borrowing to fund.  But the majority of his money probably came from lots of individual investors in the company in the form of deposits for the APT, the 92 and the King - the purpose of all monies paid on crowdfunded models is to pay for each stage - in this case the CADs.  For Dave to make no profit (but also no loss) all the development and trips to China would have had to come out of the deposits on those models, if the deposits dried up then quickly the funds to develop the models would dry up just as quick leading to where the company is now.

 

I would have hoped that once they were realeased the first runs of J94s and wagons at least recovered the investment made in them + their share of overheads. If they did not, then its clear there is something wrong with the business calculation. He did not have the resources to wait for profit to come from future runs. I know he used the devaluation of tooling in the accounting calculations but devaluation does not bring in cash. And when you have none, its over. 

 

 

[Karhedron]

9 minutes ago, Ravenser said:

Dave Jones seems largely to have been playing with other people's money, not his own. The bulk of the financial loss will be born by the hobby at large, not by Dave Jones. That is an unprecedented situation . Normally we can take the view "all very sad , but it's between him and the banks, a private matter, not our concern" - here we can't.

 

I am not sure that is true. Before he left RMWeb, I am sure I remember Dave commenting that he had remortgaged his home to startup DJM. My memory may be fallible but I don't think it is fair to assume that Dave won't have lost anything out of all this.

[Widnes Model Centre]

2 minutes ago, Karhedron said:

 

I am not sure that is true. Before he left RMWeb, I am sure I remember Dave commenting that he had remortgaged his home to startup DJM. My memory may be fallible but I don't think it is fair to assume that Dave won't have lost anything out of all this.

 

If he had remortgaged his home, he would have never got  a full value remortgage for a business venture. The value of his home would not have paid for any tooling even if he managed to borrow what it was worth.

[DavidH]

4 minutes ago, Karhedron said:

 

I am not sure that is true. Before he left RMWeb, I am sure I remember Dave commenting that he had remortgaged his home to startup DJM. My memory may be fallible but I don't think it is fair to assume that Dave won't have lost anything out of all this.

 

He did say this, and it was repeatedly used on here to silence critics. But it depends what everyone thinks his house is worth. According to Zoopla the house is worth around £100k. Still not what crowdfunders may have risked on the company.

[Roy Langridge]

3 minutes ago, DavidH said:

 

He did say this, and it was repeatedly used on here to silence critics. But it depends what everyone thinks his house is worth. According to Zoopla the house is worth around £100k. Still not what crowdfunders may have risked on the company.

 

His filed accounts show creditors were owed £65,597 on 31/7 last year. Now, we don't know if/how the crowdfunders were included in that figure. I believe that they must have been as a product was owed for that commitment provided and there is no "loan" figure quoted to otherwise address it.

 

From a post above it appears that others may now be claiming as creditors to increase that amount to the point that the venture was no longer viable. If July 2018 figures stand, that would be an increase in the order of £60K+ to exceed the capital and reserves figure.

 

Roy

[DavidH]

1 hour ago, MarshLane said:

I would make it clear, that in no way, will I expand on, or reply further to anything contained within this response, so please do not ask

 

And then go on to make veiled accusations at people who can't respond, such as:

 

1 hour ago, MarshLane said:

it has been forced on him in recent weeks by a third party in the UK

 

1 hour ago, MarshLane said:

 Dave had already commenced proceedings in recent weeks to recover money from the China factory

 

1 hour ago, MarshLane said:

if two organisations had kept their word

 

Rather typical of Dave's recent communication style: accept some responsibility for the situation but make sure everyone knows you did your best but were pulled down by everyone else's perfidy.

[Ravenser]

23 minutes ago, DavidH said:

 

He did say this, and it was repeatedly used on here to silence critics. But it depends what everyone thinks his house is worth. According to Zoopla the house is worth around £100k. Still not what crowdfunders may have risked on the company.

 

Technically Dave Jones' own investment should have only funded setting up the company , the J94 , the Mermaid and any other non-crowdfunded DJM-own brand projects .

 

Everything else was funded by others :

 

- The commissioned projects were funded by the commissioners

- The crowd-funded projects were funded by the crowd-funders

 

And really he ought to have recovered his investment on the J94  - or close to it - before he lost control of the tooling

 

I did say "largely" and "the bulk" and did not imply that Dave Jones hadn't himself lost money .

 

The last accounts showed almost £66K of creditors - presumably crowd-funding monies and Dave Jones' own investment?  If crowd-funding monies have been regarded as "off-balance sheet" - and several professionally-qualified people suggested in the DJM Announcement thread that that was possible - there might be significant additional crowd-funding over and above this. Either that , or the crowd-funded projects were in fact horribly under-subscribed (and should therefore have been pulled)

 

Presumably the next set of DJM accounts would have been for the year to end June 2019 - it might be that liquidation has come because it was apparent they wouldn't show DJM as a solvent viable concern  

Edited June 7, 2019 by Ravenser
To correct creditors in 2018 accounts in view of correct figure stated above

[BR Blue]

There are a lot of questions outstanding especially regarding the accounts and where the money went. That is why my sympathies lie only with the crowdfunders at this point. The Companies House filings are not very detailed but looking at what Ravenser set out above there does seem to be a discrepancy in there some where. There is also no evidence Dave invested substantial sums into this. He may have said he re-mortgaged his house but he said a lot of things. We do not know the facts and Dave was a bit fast and lose with them.

[Colin_McLeod]

Fair points Ravenser.

For clarity I was comparing Dave's personal investment with that of an individual crowdfunder. I was not comparing his investment with the totality of crowdfunders income.

 

I was making the point that financially the crowdfunders have saved money they had planned to part with in return for a model train whereas Dave is now probably in financial difficulty.

 

 

 

[ruggedpeak]

23 minutes ago, DavidH said:

 

He did say this, and it was repeatedly used on here to silence critics. But it depends what everyone thinks his house is worth. According to Zoopla the house is worth around £100k. Still not what crowdfunders may have risked on the company.

If there is a mortgage it can be confirmed by looking up the title to the property, which anyone can do via the Land Registry for a few quid. The mortgagor will be on the title.

 

One assumes the money from the mortgage would be shown as a loan or creditor balance in the accounts.

[Persephone]

1 hour ago, MarshLane said:

I was intending to stay quiet on this subject, as it has all the potential to fall into the usual pit of assumption, guesswork and opinionated rubbish, but given that I am privy to some inside information,

 

Presumably from Dave Jones himself

 

1 hour ago, MarshLane said:

 

there is certainly no aspect of him walking away with money.

 

How can you actually say that with any degree whatsoever of certainty  (see comment above)

 

Until the liquidators have actually finished their job there is no certainty at all.

 

[Colin_McLeod]

It would be shown as a loan if the company took out the loan. More likely it would appear as a Director's loan whereby the company owes Dave money.  In that situation Dave would end up out if pocket if the company can't pay the Director's loan.

[ruggedpeak]

In the interest of balance it is worth remembering that another business folded recently taking a significant amount of modellers' deposits with it. Not exactly the same and not crowd funded but still modellers lost serious sums of money.

 

If it is not on the shelf there and then you are taking a punt. Some punts are riskier than others.

[scottystitch]

13 hours ago, Edwardian said:

 

Not hindsight in my case, I assure you, as I long since concluded that this manufacturer could not live up to its claims. it had every chance, including a loyal fanbase, sympathetic treatment on RMWeb and commissions from major retailers.  Despite this, it managed to fail, in the process letting down commissioners with flawed products and loyal fans and crowd-funders who had invested emotionally and financially. In short, DJ Models had its chance and blew it, and we have seen how hollowly the attempts to blame everyone else for this have rung, adding insult to not inconsiderable injury. No, I was not a fan.  For my part, I wrote DJ Models off some time ago, so, no, this is no surprise; I have been expecting this manufacturer to run out of road for some time. Further, I cannot see it as a loss to the hobby, because the designer never managed to produce a product within my areas of interest that was to an worthwhile standard and really it had become a thing of empty promises long before the end.  I'm not going to say nice things about the company just because it's dead; it had serious flaws and that's why it died.  

 

This does not in any way make it any the less sad for all those affected, and I extend my sympathy to the proprietor; for all the early hubris and recent grandstanding antics I suspect that he is in a whole world of pain at the moment and that is a matter for regret.  I hope he can pick himself up, dust himself off and start again at something.  I've had my fair share of failure in life, so I can sympathise, but I also know that these things happen and when they do we must carry on as best we may.  Good luck to him in that.  Like many of us, I suspect he must take the consolation of emerging from an experience sadder but wiser than when he started. 

 

Also, I cannot help but feel that it might have been better had loyal customers received some communication from the proprietor rather than find out the truth in the way it has unfolded. But, then again, he has clearly had a lot on his plate, so, perhaps, he should be forgiven for that. 

 

I actually found this post pretty well balanced. Whilst I wouldn't necessarily agree with everything that's written, I didn't view it as a "gloat" or an "I told you so". I think it eloquently sets out the position and view that many of us are in and have, respectively.

 

It offers sympathy for the main protagonist, whilst providing a view  of the reason for the company demise. It separates the actions of the company, from the aims and intentions of the individual, something many posts on this thread have failed to do, whether intentional or not. 

 

As such I don't see much wrong with it, other than the bits I disagree with (which after all, is merely a difference of opinion)

 

My view, for what it may be worth, speaking as someone who has potentially lost money, and more importantly (for me), the opportunity of multiple Class 17s - A King, was really a Rule 1 altruistic punt.

 

Best

 

Scott

[letterspider]

Is this the same Dave Jones?

 

https://www.liverpoolecho.co.uk/news/liverpool-news/man-wife-assaulted-after-row-13997345

[scottystitch]

2 minutes ago, letterspider said:

Is this the same Dave Jones?

 

https://www.liverpoolecho.co.uk/news/liverpool-news/man-wife-assaulted-after-row-13997345

 

Yes it is.

[Ravenser]

26 minutes ago, Colin_McLeod said:

It would be shown as a loan if the company took out the loan. More likely it would appear as a Director's loan whereby the company owes Dave money.  In that situation Dave would end up out if pocket if the company can't pay the Director's loan.

 

Either way , it should be included in the  "£65,597 owed on 31/7" 

 

If we assume:

 

400 crowd-funders for the OO APT, (same as N ) @£250 and

1000 crowd- funders for 92 in OO @£30 and

1000 crowd-funders for 92 in N @£30 and

1000 for King in N  @ £30 (same as the target for the 63xx in N) ,

 

we get a notional £190K of crowd-funding, if these projects were fully funded (and if they weren't they shouldn't have proceeded...)

 

If Dave Jones had made a director's loan of £50K to the company, from the proceeds of his re-mortgage , this would imply that only £13K of crowd-funding was on the balance sheet at 31/7/18, and trade creditors were zero. Given the situation in China, "trade creditors =zero" must be a very questionable assumption

 

Then we are left with 3 options:

 

- The creditors on 4/6/19 should have been at least £240K (reflecting subsequent crowd-funding calls - DJ loan of £50K + £190K crowdfunding)

- Crowd-funding was not included within the company accounts and was completely off-balance sheet

- DJM had in fact raised only a fraction of the crowd-funding required.

 

Something must give - either the size of Dave Jones' directors loan, or the the amount of crowd-funding on the balance sheet

 

It's pretty difficult to see how Dave Jones could have put more than £50K into the business, based on those accounts. It might have been significantly less

Edited June 7, 2019 by Ravenser

[letterspider]

1 minute ago, scottystitch said:

 

Yes it is.

 

Poor guy - he has had a rough time.