Hornby results 2018/19

[The Stationmaster]

3 hours ago, Mike Storey said:

 

Quite damning about the previous team. New person(s), new broom, so all will be fine now? Quite heroic to be that bold about it.

 

I do hope he is right, though!

 

Especially as he's re-engaged one of Hornby's team from the time they really started to go downhill!

 

But it's odd in other ways when it comes to the market if you look at a lot of Hornby releases in the year or two prior to 2019 announcements because that was what the previous teams were delivering, as was most of the new tooling model railway items announced for the 2019 range.  And at the same time the 2019 range has seen the reintroduction of a lot of older tooling models which why they make some commercial sense by doing such things as cashing in on the new Class 66 market being created by Hattons they're hardly in the collector league!

 

In fact what is happening this year is a lot of stuff, mainly using old tooling, which is aimed somewhat further down market from the collector market - certainly as far as model railways are concerned.  I don't necessarily condemn that as a commerical policy because some of these releases are clearly selling quickly so they've hit the right buttons but it's the sort of thing which might eventually run out of steam as the old toolings are used up.

[adb968008]

3 hours ago, Mike Storey said:

 

Quite damning about the previous team. New person(s), new broom, so all will be fine now? Quite heroic to be that bold about it.

 

I do hope he is right, though!

 

Quote

He pointed out that many Hornby customers are collectors and hobbyists.

"A Harry Potter train set? How does that fit in my layout of Torquay in the 1960s? They can't relate to that," Mr Davies said.

Isn’t he the one to reintroduce Harry Potter, and the Coke Wagon etc ?

 

new management blaming old, is nothing new, I think they must teach that in day one of a business degree.

 

Cutting costs is good, cutting logistics must surely come.

The next year is the year of proof.

[Mike Storey]

19 hours ago, adb968008 said:

Isn’t he the one to reintroduce Harry Potter, and the Coke Wagon etc ?

 

new management blaming old, is nothing new, I think they must teach that in day one of a business degree.

 

Cutting costs is good, cutting logistics must surely come.

The next year is the year of proof.

 

But that is exactly not what LCD has said in this most recent statement - "overheads are about as low as they can be now" (or something very similar). So sales are everything from now on.

 

[Andy Hayter]

1 hour ago, Mike Storey said:

 

But that is exactly not what LCD has said in this most recent statement - "overheads are about as low as they can be now" (or something very similar). So sales are everything from now on.

 

 

It does depend how logistics costs are handled on the balance sheet.  Since much of these costs are now out-sourced to shipping lines and their local external warehouse operation, there is a good case to treat these as variable costs and not fixed cost overheads.

[Mike Storey]

9 minutes ago, Andy Hayter said:

 

It does depend how logistics costs are handled on the balance sheet.  Since much of these costs are now out-sourced to shipping lines and their local external warehouse operation, there is a good case to treat these as variable costs and not fixed cost overheads.

 

Fair point Andy, except that there appears to be a relatively fixed price for the Canterbury operation, as "distribution" costs reduced by £200k, reflecting the reduction in transactions, but the Hearsden cost stayed static at around £2m. I would guess a big part of that would have been increased warehousing, due to the increased end-of-year inventory. So, you move product, you pay, you don't move product, you still pay.

 

Edited June 22, 2019 by Mike Storey

[Andy Hayter]

Which in itself might suggest that there is something to go at if the costs have barely changed.  Depending on how the contracts are written, getting customers to make bigger orders of individual items through some sort of incentive might be a way forward.  

 

When you come to analyse them fixed and variable costs are a real nightmare to the uninitiated.  We under stand fixed costs.  These are things we have to pay no matter what - staff costs, insurance , rates, rent etc.  Variable costs are our raw materials.  If we make 1 item we need 1 item's worth of raw materials.

 

Now let's suppose we decide to make something.  All of our variable costs become fixed on a per item basis and our fixed costs become variable.  So the cost in raw materials is the same per item no matter if we make 1 or 1 million, but our fixed costs per item fall as the number of items made increases.

[No Decorum]

On ‎22‎/‎06‎/‎2019 at 18:42, Mike Storey said:

 

But that is exactly not what LCD has said in this most recent statement - "overheads are about as low as they can be now" (or something very similar). So sales are everything from now on.

 

So that’s why Hornby decided that the 87s’ pantographs didn’t need a servo to raise them. I wondered about that.  Seriously, a bob or two more on QC would be appreciated. I was all set to get a red Coronation when I leant of the stripes not meeting on the nose, the mess of the drawbar and the trailing wheel flanges fouling the rear stretcher on the trailing truck. Whilst I wait for the definitive Coronation, my money was directed elsewhere. The market is very competitive and Hornby needs to improve.

[Mike Storey]

On 22/06/2019 at 22:38, Andy Hayter said:

Which in itself might suggest that there is something to go at if the costs have barely changed.  Depending on how the contracts are written, getting customers to make bigger orders of individual items through some sort of incentive might be a way forward.  

 

When you come to analyse them fixed and variable costs are a real nightmare to the uninitiated.  We under stand fixed costs.  These are things we have to pay no matter what - staff costs, insurance , rates, rent etc.  Variable costs are our raw materials.  If we make 1 item we need 1 item's worth of raw materials.

 

Now let's suppose we decide to make something.  All of our variable costs become fixed on a per item basis and our fixed costs become variable.  So the cost in raw materials is the same per item no matter if we make 1 or 1 million, but our fixed costs per item fall as the number of items made increases.

 

True Andy, on the first comment.

 

Although, on the second, one of the "fixed" costs has changed the most in one year - salaries paid.

 

But the inversion of fixed and variable only occurs on a per unit basis. For that to assist the overall balance sheet, the volume of units produced and sold has to increase significantly. Hence (bar some unexpected re-negotiation over the Hersden contract), sales volume will be the most crucial element.