RMweb Gold Culmhead Posted March 30, 2016 RMweb Gold Share Posted March 30, 2016 Announced this morning, that Barclay's have agreed to waive the March covenant tests. So there appears to be some relief for the time being. The next statement (they say) is likely to be June when the annual report and accounts are published Also announced, that UK sales were up 4% year on year but overall sales in the second half of the year ( to the 27th March) were down 2%. 3 Link to post Share on other sites More sharing options...
DonnyRailMan Posted March 30, 2016 Share Posted March 30, 2016 Announced this morning, that Barclay's have agreed to waive the March covenant tests. So there appears to be some relief for the time being. The next statement (they say) is likely to be June when the annual report and accounts are published Also announced, that UK sales were up 4% year on year but overall sales in the second half of the year ( to the 27th March) were down 2%. Here`s hoping that the next few months are kind to Hornby and shares rise on the F T Index. Link to post Share on other sites More sharing options...
RMweb Premium Brit70053 Posted March 30, 2016 RMweb Premium Share Posted March 30, 2016 For a link to the announcement, see post #24 under 'An Idea to Help Hornby' Thread for details of this welcome news. Sorry I don't know how to post links, but hopefully someone will do that soon. Link to post Share on other sites More sharing options...
Fenman Posted March 30, 2016 Share Posted March 30, 2016 For a link to the announcement, see post #24 under 'An Idea to Help Hornby' Thread for details of this welcome news. Sorry I don't know how to post links, but hopefully someone will do that soon. Here's the link. Paul Link to post Share on other sites More sharing options...
andyram Posted March 30, 2016 Share Posted March 30, 2016 It sounds promising news. Hopefully Hornby can gradually turn their fortunes around. The supply issues of the past, poor stock management and other mistakes have cost the company over the years. Hopefully there is now a clear direction for the company to move forward. 1 Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted March 30, 2016 RMweb Gold Share Posted March 30, 2016 So good news and I'm sure Hornby will respond well - and to our particular advantage - with that worry off its shoulders. And that the various action it is already taking plus what might be planned for the future will help it to avoid a similar situation (at least as far as model railways are concerned) this year and in the future. 1 Link to post Share on other sites More sharing options...
RMweb Premium Legend Posted March 30, 2016 RMweb Premium Share Posted March 30, 2016 (edited) Yep as said, dialogue has clearly been going on with bankers and Roger Canham is a completely different kettle of fish. Really glad at this, not just for the employees, but for me a UK market dominated by Bachmann , driving three large increases in price in last year, was not something I found palatable. They are probably already doing it, but a root and branch of what lines are profitable would be what I'd be carrying out. While a rationalisation of some of the range is a possibility I would maintain the rate of new introductions to maintain interest (at least for Hornby). What makes money, what doesn't and watch out for synergies ie cutting back on part of range doesn't materially affect other parts. Restore relationship with retailers. Interesting there was no end of year sale this year, might be a sign that things have already changed. Edited March 30, 2016 by Legend 2 Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 30, 2016 Share Posted March 30, 2016 (edited) Here's the link. Hornby's press release is also available here. I found this interesting: The Group confirms that recent trading remains in line with expectations. Sales for the second half of the year to date*, have been down 2% year on year, within which the UK business has been up 4% year on year. I'd say that suggests the British outline railway business is doing OK - not gangbusters, but OK. I still suspect that while Hornby has no doubt had to spend a lot of money on tooling, the sink hole for Hornby finances might be somewhere other than British outline railway models. They indicate that full year results will be published in June (as usual). Edited March 30, 2016 by Ozexpatriate Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 30, 2016 Share Posted March 30, 2016 They are probably already doing it, but a root and branch of what lines are profitable would be what I'd be carrying out. I would presume that the Bankers have only given their blessing based on a turn-around plan that has already been communicated and that they will want some oversight. It will be interesting to see whether there will be any changes to the Board at the next shareholders meeting. 1 Link to post Share on other sites More sharing options...
Crichel Down Posted March 30, 2016 Share Posted March 30, 2016 Before the champagne corks start popping, maybe we should read between the lines of the corporate 'spin'. Barclays have only let Hornby off the hook (temporarily) by effectively waiving the breach of their banking covenant which would otherwise have occurred this month. It seems that the company is still in a 'cap in hand' relationship with Barclays, and will remain dependent on the bank's continuing forbearance for the time being. Whether the bank's patience will be extended further will depend on the progress Hornby is able to make in showing that its financial position is beginning to recover. No doubt Barclays will be watching the position closely, and the price of their continuing support may be the realisation of some assets (certain brands, one or two product ranges, etc.) and other necesary 'adjustments'. What the year end figures will show when they are published in June is anybody's guess. In the meantime, Hornby's well-wishers will have to keep their fingers tightly crossed. 2 Link to post Share on other sites More sharing options...
andyram Posted March 30, 2016 Share Posted March 30, 2016 Before the champagne corks start popping, maybe we should read between the lines of the corporate 'spin'. Barclays have only let Hornby off the hook (temporarily) by effectively waiving the breach of their banking covenant which would otherwise have occurred this month. It seems that the company is still in a 'cap in hand' relationship with Barclays, and will remain dependent on the bank's continuing forbearance for the time being. Whether the bank's patience will be extended further will depend on the progress Hornby is able to make in showing that its financial position is beginning to recover. No doubt Barclays will be watching the position closely, and the price of their continuing support may be the realisation of some assets (certain brands, one or two product ranges, etc.) and other necesary 'adjustments'. What the year end figures will show when they are published in June is anybody's guess. In the meantime, Hornby's well-wishers will have to keep their fingers tightly crossed. Not sure I have seen any evidence of champagne corks popping! Think most posts are accepting that Hornby have been given greater time to sort things out, and hoping that they do. Link to post Share on other sites More sharing options...
RMweb Gold ruggedpeak Posted March 30, 2016 RMweb Gold Share Posted March 30, 2016 Hornby will presumably have to have presented a detailed plan to Barclays of how things are going to improve, and hopefully Barclays have told them to stop messing about with branding and digital stuff and concentrate on the core business of flogging model trains, Corgi cars and Airfix kits. If an activity doesn't directly sell trains, planes or automobiles, stop doing it. 1 Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 30, 2016 Share Posted March 30, 2016 Hornby will presumably have to have presented a detailed plan to Barclays of how things are going to improve, and hopefully Barclays have told them to stop messing about with branding and digital stuff and concentrate on the core business of flogging model trains, Corgi cars and Airfix kits. If an activity doesn't directly sell trains, planes or automobiles, stop doing it.I found this turn of phrase curious: Barclays has agreed to waive the banking covenant tests that it was due to undertake on the struggling company this month, giving the Scalextric producer breathing space to that it can attempt to revive its fortunes.I'm not assuming this is a clue but I'm thinking about it. 2 Link to post Share on other sites More sharing options...
RMweb Gold ruggedpeak Posted March 30, 2016 RMweb Gold Share Posted March 30, 2016 Well at the NEC this weekend is the Gadget Show 2016 which has a Gigantic Scalextric Track, and no sign of any digitally controlled trains. "This Giant Scalextric Track has an extremely exciting race format complete with twists, turns, overtaking opportunities and a pit lane! It uses the latest digital technology to create the need for compulsory fuel in the pit lane in the duration of the race making the experience that little bit more life like." http://www.gadgetshowlive.net/whats-on/better-life/big-toy-track Maybe the latest strategy is to push Scalextric into gadgetland since that is where the mass market and big bucks are? Certainly ties in with other comments about the application of technology to that brand. I guess model trains is not predicted to be a major area of business growth for the foreseeable, and with increased direct competition in the model train sector and little in slot cars....... 1 Link to post Share on other sites More sharing options...
NickC Posted March 30, 2016 Share Posted March 30, 2016 The Telegraph article says sales down 2% in total and down 4% in the UK, not up as was posted by Culmhead. It doesn't say which part(s) of the business have falling sales, but the fact the article mentions Scaletrix might be a clue? Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 30, 2016 Share Posted March 30, 2016 (edited) Maybe the latest strategy is to push Scalextric into gadgetland since that is where the mass market and big bucks are?It might be where the £14m raised by relisting on the AIM went. Said in the full knowledge that most of the railway brands, including the international ones have cumulatively launched a lot of new tooling. Edited March 30, 2016 by Ozexpatriate Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted March 30, 2016 RMweb Gold Share Posted March 30, 2016 I found this turn of phrase curious: I'm not assuming this is a clue but I'm thinking about it. I trust the printed version of the 'Telegraph' tomorrow might offer a more considered article rather than an internet bang out job we've had already. 1 Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 30, 2016 Share Posted March 30, 2016 (edited) I trust the printed version of the 'Telegraph' tomorrow might offer a more considered article rather than an internet bang out job we've had already.Indeed so, particularly this: ... the UK business has been up 4% year on year sales ... had fallen 4pc in the UK Edited March 30, 2016 by Ozexpatriate 1 Link to post Share on other sites More sharing options...
jetmorgan Posted March 30, 2016 Share Posted March 30, 2016 Just caught the end bit on the BBC south east news apparently Hornby have been thrown a lifeline...I think by the money people...so it's looking a bit better now, we can all breath a sigh of relief!!! Link to post Share on other sites More sharing options...
KalKat Posted March 30, 2016 Share Posted March 30, 2016 I wouldn't ............ The only agreement is to suspend the breach tests. There is still the need foe Hornby to demonstrate to Barclays that they can pull back to an even keel. Emma Link to post Share on other sites More sharing options...
RMweb Premium Legend Posted March 30, 2016 RMweb Premium Share Posted March 30, 2016 Nothing like thinking positive Link to post Share on other sites More sharing options...
KalKat Posted March 30, 2016 Share Posted March 30, 2016 Don't get me wrong - I really wouldn't want to see Hornby collapse, but equally I think it important to realise they aren't out of the woods yet. Emma Link to post Share on other sites More sharing options...
Clearwater Posted March 30, 2016 Share Posted March 30, 2016 The way loan documents usually work is that they test covenants at specific dates. There are only two outcomes at the point. Either you are within your covenants or you are not. If you are not, you are in breach. Unless the bank waives the breach, the loan will default. However, merely because you pass the covenant at any given testing date, it would never absolve you of the need to pass the test in the future. The drafting will be along the lines of "the borrower covenants that at each testing date, the ratio of X:y will be less than / more than (as appropriate) suitable level." What we do not know from Hornby's brief statement, is what they have had to agree in order for the breach to be waived. They could have had to agree to give the bank a new, mutually acceptable business plan by a given date, find new investors, execute asset sales, enhance information sharing etc. It is not "out of the woods" but nor is it "we see no way out from this." If the latter, the bank would enforce and seek to get back what they can. We'll see what they say inJune they announce their annual results. David 2 Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted March 30, 2016 RMweb Premium Share Posted March 30, 2016 I don't think anybody is under any illusion that this magically makes the financial woes of Hornby disappear, but what it does do is offer some re-assurance to people that the bank see's their interests as being best served by supporting Hornby (at least at this time) and indicates that the bank considers that Hornby management have a viable turnaround plan. Which is positive. Link to post Share on other sites More sharing options...
robmcg Posted March 30, 2016 Share Posted March 30, 2016 I am curious as to the role of Scalectrix in Hornby's woes and whether or not continuing investment in car-race pit-stop modelling is seen as a wise do-or-die investment. Meanwhile I am very relieved for the people who work at Hornby, and the positive outlook for my own personal interests, high-quaility railway models. Nice to see similar sentiments shared here, too. Link to post Share on other sites More sharing options...
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