Hornby's financial updates to the Stock Market

[Legend]

Agree with Trains4U. The decision to market the 225 at that price was ridiculous and a sign , that at least in Marketing terms , Hornby had lost the plot. If there is a market for youngsters , and I defer to Gareth's experiences, he is living it after all, then there should be 225s, 390s,125s ,90s, 66s and 156s in Railroad Range in current liveries. Hornby already have the tooling so no great expenses there. We also need a low spec 800 IEP so folks can buy the latest fastest train they see. Add in Tornado , Flying Scotsman in BRGreen , a low cost shunter of some sort, and there's your Railroad Range.

 

Oh yes it's not for the purist , but it might stimulate the young enthusiast market, if there is one.

Edited April 12, 2017 by Legend

[dogbox321]

Spot on Dogbox. I'd get your name in there . Could do with you as CEO. Also reflecting back on what Trains4U says. A missed opportunity was not having a Railroad Flying Scotsman in BR Green , when the real thing took to the rails, and even sets based on it. Who wants an Eastern Region Trainset with a B17? But a trainset with BR Flying Scotsman with 2 or 3 crimson and cream coaches at a decent price point would have sold well

Thanks Legend.  

 

Hornby know where I am!  Lol!

 

Regards,

[Trains4U]

And while I'm on my soapbox...

 

The two most common questions regarding availabilty:

 

Have you got a Mallard?  (a blue one, not a green one)

Have you got a Flying Scotsman?

 

These should ALWAYS be available - in both NRM edition and railroad specifications.

[DJM Dave]

A further thought on the loss of concessions. Many of these were the shop window to the general public - in my vicinity, a large garden centre on the edge of town visited by thousands of people each week, and a Hawkin's Bazaar on a prominent corner with the main shopping area in the city centre.

 

These are now gone, so the Hornby brand is no longer in the eye of the general public within our city.

 

What are Hornby going to use for their shop window to the general public in the future?

Totally agree Mike.

Nothing has really been learnt from the predessors in charge, added to the fact that the guys who came in in the last round of musical chairs got shafted with the stock orders for delivery this year.

Also, no one seems to learn. Or, although they talk a good game, they aren't interested in any bodies way except their own.

The report I did for Simon Kohler to present to the board was met with astonishment apparently, and one of their directors video'd my presentation at a show in which my opinions were made.

 

All solid advice for anyone to take on board if they were so minded..........they weren't.

 

Model trains is not like any other business. It's transient, it moves quickly and changes faster. You have to recognise and change just as quickly. And having more factories available than ever should help that scenario. Mind you if the man with his hand on the rudder wants to go in circles while picking up a healthy wedge each week, instead of ploughing a straight course, who am I to argue?

 

Cheers

Dave

[The Stationmaster]

There IS a market for youngsters.   It just seems that it is not being seriously worked on.

 

As a prime example - the virgin East coast 225 - last year issued as a premium limited edition train pack, with an RRP of over £250 - I mean SERIOUSLY!

and then with no coaches to go with it.

 

That should have been a train SET, with track and controller - for no more than £150 - or a Railroad train pack at sub £100.  After all this model is now almost 30 years old, having been first released back in 1988, and I cannot see how this RRP can be justified.

 

This is what most kids want - what they see running through their town, and is a classic missed opportunity.

 

If Hornby were to release the Railroad HST in VTEC, East Mids and GWR liveries, with railroad spec Mk3s (plus complementary buffet and TSO coaches as add ons) they would sell loads - even though the railroad (ex lima) HST is not quite right - in terms of lights and cooler groups etc

 

Most of the youngsters I meet want something colourful and fast - and the disappointment when they see the prices of what they want (£300 or so, for just a 4-car HST) is sad to see

 

If an IEP train set is not released - for under £200 - I will be very, very disappointed at the missed potential to grow their market

 

Interestingly I understand from 'someone' at Hornby that the GWR Class 800 set is sold out at the factory - .ie. the retail trade have bought the entire production run.

 

That implies to me that either there are some stupid people in the retail trade (I do know of one or two) or - far more likely - there are people at retail level who are convinced it will sell and who are putting their money where their mouths are.  It will be interesting to see the outcome.  However I do agree entirely with your point about youngsters buying what they can see - many years ago I bought Triang Hymeks for that very reason, good looking models of something that I could see locally.  But we do come back to the Hornby problem (and it's not just theirs) of defined ranges and tackling more than one market area - but I somehow doubt that Mr Anton is aware of that problem and would therefore do nothing to resolve it.

 

A further thought on the loss of concessions. Many of these were the shop window to the general public - in my vicinity, a large garden centre on the edge of town visited by thousands of people each week, and a Hawkin's Bazaar on a prominent corner with the main shopping area in the city centre.

 

These are now gone, so the Hornby brand is no longer in the eye of the general public within our city.

 

What are Hornby going to use for their shop window to the general public in the future?

 

Hornby did at least realise the particular problem that they were suffering from (most?) concessions in that stock was slow moving and as a consequence was tying-up capital and having an adverse effect on the balance sheet  (and was in turn probably responsible for some of the 'fire sales').  So they took the axe to them - and judging by the nearest one to me (in a branch of WHS) it was exactly what they needed to do.

 

However if other concessions could produce a decent turnover and were managed as units from which stuff would continue selling then just maybe they might have worked effectively - or possibly they could convert to retail on normal trade terms (although I doubt the big multiples would accept that).  Thus there is something of a quandary and I'm not entirely sure of the answer.  However I also bet that Mr Anton hasn't got a clue - beyond shutting them to reduce stock holdings and money tied up in stock.

 

So to answer some of these problems, and others that have been mentioned - let's try a different idea; a group of retailers combine to takeover Hornby's distribution and run it efficiently (most seem capable of that at smaller volumes so it's mainly a matter of scale perhaps?) and once they have done that they look at 'High Street' presence as well.  Although I tend to the view that at that stage they might well reach the same conclusion as Hornby have - at least in economic terms.

[The Stationmaster]

Thankyou Stationmaster.

 

I do hope that the production skills of Hornby's team will survive in a profitable entity of some sort, I don't see from what little I know of Mr Anton a promoter of a specialised and successful high-quality model production.   That makes me think of DJM...     where Mr Anton is more along the lines of cliches like re-prioritising asset management profiles, going forward of course. 

Rob the point really is one of economics rather than anything else.

 

If we want Hornby's model railway business to continue in roughly the same way as it has recently developed product wise people aren't going to do it by mortgaging their houses or taking out a second mortgage or whatever because we are talking about a business measured in millions of £s where annual investment in development and tooling together with production spend is going to be greater than - for example - all the UK commissioners put together.  And taking away Airfix and Scalextric would increase development costs rather than reduce them because of the loss of shared design facilities and staff.  Hornby is too big to do that with it and at the same time it is, as I previously said, in my view too small to sit in the financial markets in the way it does at present.

[JSpencer]

It is illuminating to have a  look at Mr Anton's other involvement on the 'net and study his history and involvement with various companies - quite a number of which have since been dissolved.

 

I might be doing him an injustice but following on from Ron Ron's comments above I get the impression that Mr Anton is unlikely to deliver any sort of miracle pill and is more likely to dig the company into the mire as his 'toy making' strategy goes the way of other recent 'toy making' strategies at Hornby and may result in selling off various bits as it takes his fancy (I believe there is a name for such activities).

 

Overall Hornby face one major problem - they are a company with a large shareholding with a poor P/E ratio offering limited returns in a business area where having that sort of structure is probably an outdated mode of ownership and far too top heavy for their core, and most profitable, business areas.  Effectively they need to be either much smaller and simpler or have larger and more diverse capital backing and assets to be this sort of overall size of company in this business area.  I somehow suspect that Mr Anton hardly views the future of Victoria Carpets as being part of a wider corporate package with a high investment, high product price, part of that package involved in a specialised market area (which his utterings suggest that he fails to understand from either an historical or present market viewpoint).

 

I have a nasty feeling that if he gets his way we can kiss Hornby goodbye as far as our interests, and those of various other hobbyists, are concerned. 

 

If I was an objective share holder then my choice is:

1/ keep the current person, hope they really have learned and really have stabilized the ship

or

2/ swap him for someone who has so far shown no clear vision to move forwards and does not even know the market

 

Logic would dictate number 1 should remain. Of course the battle will be one probably by the person who puts on the best show. It could be argued that maybe neither are really apt to run Hornby, however unless someone else steps into the light, I would keep the devil we know than the devil we don't until such a suitable person arrives (or considers themselves ready).

 

The only thing I find more scary right now is that where I live in France, we have to choose between 11 idiots to become the next president. 2 perfectly apt candidates from the main stream parties were voted out by their respective parties because they were not right wing enough or left wing enough respectively. 

[Legend]

It'll be who commands most shares. So if Mr Anton , who seems to represent the no2 volume shareholder, can convince nos 3 and 4 he is the best bet, then he will command a majority

[GordonC]

I totally agree that the rising prices are a barrier to the hobby. However I do not think we should press the panic button over the idea that we are an ageing hobby. The pattern has been there for many years - people gain an interest through a train set in their early years, build a simple layout with a parent or grandparent before dipping out of the hobby in their teenage years and early adulthood before returning when older and perhaps having their own property. If you read articles in model railway magazines you will see many a layout owner describing such a route through the hobby. The fact is older people have more disposable cash, more time and potentially more space.

As I walk around model railway shows I agree that the majority of visitors are from the older age groups, but there are many families with younger children. I am sure many of these will start with a cheap train set at some point. Admittedly the train sets could be improved to add more play value which may draw more people in. Yes the use of new technology could attract the teenage market, but realistically I doubt many people from the teenage / young adult bracket will be starting in the hobby. The important thing is to provide fun train sets to grab the interest early, then detailed models that draw more people back in later in life.

Speaking for myself I certainly followed that route. For me it was a simple Lima train set that arrived at Christmas in the early 1980's. I expanded that onto a baseboard and maintained my interest until secondary school demands took over in my mid teens. Through my late teens and twenties there was no chance of containing in the hobby. GCSE pressures, A Levels, University, starting work and not having space at home all kept he away from layout building. Yes I did still visit shows and from time to time added to my collection when I had disposable cash. I finally returned to the hobby when I bought my first home in 2005, aged 30. It was not until eight years later that I actually found the time to complete my first layout when pushed to do so for a show I was organising. Now, at 41, work and family life continue to get in the way of layout building and operating. I am sure many more people of a similar age have the same issue to deal with.

Hornby therefore need to target two specific areas. The youngsters in order to ignite the hobby and the older demographic who are returning. I am not sure they are doing the younger end well enough. I certainly agree that the Railroad range has lost focus. This should be a cheap range to help youngsters expand their layout. Brightly coloured small steam and diesel tank engines, simple models of famous trains and maybe more modern types too would fit this idea perfectly. Perhaps play value scenic items with operating parts should also fill this range - more like the car loading ramp, stone leader etc. I agree that a Crosti 9F, D16 etc do not really suit this idea.

 

So target getting the youngsters to gain their interest, do not waste time and funds targeting an age group that will rarely participate. Make sure the returning modellers get the quality they are seeking. I would suggest doing away with the niche models like the Fathers Day wagons that,not me, do not fit with either market.

 

One comment I would make on this is that yes, things like the Crosti 9F may be an odd choice for Railroad, but would there really have been enough of a market to do it in full fat and recover the tooling costs? It might be a case of either you get a Railroad model that looks like a Crosti but is at the basic end of the detailing spectrum or no Crosti 9F at all.

 

Its not my kind of thing but from what I saw, I thought they did a decent job with it

[andyram]

Just read of the plastic train sets that Hornby are shortly to release aimed at the junior modeller. It will be interesting to see how these perform.

[Legend]

Just read of the plastic train sets that Hornby are shortly to release aimed at the junior modeller. It will be interesting to see how these perform.

The key will be can they get into Toys r us or Smyths . The last time I was there there was only a cheap Western Trainset in Smyths . Nothing at all in Toys r us

[Clearwater]

Just read of the plastic train sets that Hornby are shortly to release aimed at the junior modeller. It will be interesting to see how these perform.

  

The key will be can they get into Toys r us or Smyths . The last time I was there there was only a cheap Western Trainset in Smyths . Nothing at all in Toys r us

I had a very quick look at Ally Pally and I don't think they're as nice as the marklin sets: a bit cartoony. I hope they are interoperable with marklin. (Note success of brio, wooden Thomas, Tesco version, big jigs (nearly an autocorrect disaster there!) etc which you can mix and match). Marklin is a bit harder to put together but crucially doesn't require wiring working off batteries and radio control.

 

Agree it needs to be in the big multiples but not on a sale or return basis to Hornby as otherwise they could easily be facing another toy related disaster development and write off

 

David

[Widnes Model Centre]

And while I'm on my soapbox...

 

The two most common questions regarding availabilty:

 

Have you got a Mallard?  (a blue one, not a green one)

Have you got a Flying Scotsman?

 

These should ALWAYS be available - in both NRM edition and railroad specifications.

 

Maybe even more basic than that. Hornby and Scalextrix Track in short supply. Please don't ask for matt black paint.

[Coryton]

Maybe even more basic than that. Hornby and Scalextrix Track in short supply. Please don't ask for matt black paint.

 

I wasn't planning on asking for Humbrol matt black - I've been rather put off since hearing of a batch that dried blue...

[rue_d_etropal]

Just read of the plastic train sets that Hornby are shortly to release aimed at the junior modeller. It will be interesting to see how these perform.

 

any pictures please?

 

Just spotted one, but only one on other thread.

Edited April 12, 2017 by rue_d_etropal

[Ozexpatriate]

Aren't Lego Trainsets Radio Controlled?

The power functions controller is infra-red. The receiver is selectable so you can operate two trains independently.  A battery compartment needs to be incorporated in the design, but it and the receiver come with LEGO studs on the top and holes on the bottom so they can be 'bricked in'.

 

They abandoned metal conducting rails in their track some years ago.

Edited April 12, 2017 by Ozexpatriate

[Ozexpatriate]

It'll be who commands most shares. So if Mr Anton , who seems to represent the no2 volume shareholder, can convince nos 3 and 4 he is the best bet, then he will command a majority

Yes the application of logic has little to do with a hostile boardroom maneuver.

[Loconuts]

Totally agree Mike.

Nothing has really been learnt from the predessors in charge, added to the fact that the guys who came in in the last round of musical chairs got shafted with the stock orders for delivery this year.

Also, no one seems to learn. Or, although they talk a good game, they aren't interested in any bodies way except their own.

The report I did for Simon Kohler to present to the board was met with astonishment apparently, and one of their directors video'd my presentation at a show in which my opinions were made.

 

All solid advice for anyone to take on board if they were so minded..........they weren't.

 

Model trains is not like any other business. It's transient, it moves quickly and changes faster. You have to recognise and change just as quickly. And having more factories available than ever should help that scenario. Mind you if the man with his hand on the rudder wants to go in circles while picking up a healthy wedge each week, instead of ploughing a straight course, who am I to argue?

 

Cheers

Dave

 

 

 

Hornby are producing the right models ie the Pecket, it is just getting the quantity of the batches right. Too many models for the market place result in fire sales and moans from the retailers. Regional requirements is another thing, Blue A4's and Green A3's do not sell well down here in the South, whereas Southern and GWR models do. Modern image units are just too big to run on the average layout and also too expensive. So it would appear the marketing needs looking at with smaller batches and higher prices to stop the market being flooded by cheap second hand models as in the case of the Bachmann 0n30 range.

 

I fear that if Mr Anton gets his way will see the end of Hornby as a serious producer of model railway items and turn into a manufacturer of cheap plastic tat aimed at young children.

 

Loconuts   

Edited April 13, 2017 by Andy Y

[Horsetan]

.....The only thing I find more scary right now is that where I live in France, we have to choose between 11 idiots to become the next president. 2 perfectly apt candidates from the main stream parties were voted out by their respective parties because they were not right wing enough or left wing enough respectively.

 

OT, but I understand that's a greater choice of eejits than the French electorate normally gets presented with. I suppose half the problem is that the two apt, but unsuccessful, candidates represented the "same old, same old", which perhaps France is a little tired of.

 

 

....I fear that if Mr Anton gets his way will see the end of Hornby as a serious producer of model railway items and turn into a manufacturer of cheap plastic tat aimed at young children.

 

True, but at least said children will be able to run such tat on the products of Victoria Carpets....

Edited April 13, 2017 by Horsetan

[Bernard Lamb]

I think you would be the last person I would take business advice from as your past exploits in the business are not exactly covered in glory.

 

 

 

Loconuts   

I do love to visit this forum and enjoy the friendly banter.

At least the chap you are slagging off has the guts to start a business and then come on here to openly discuss things.

That's your name in my book.

Bernard

[Fenman]

I do love to visit this forum and enjoy the friendly banter.

At least the chap you are slagging off has the guts to start a business and then come on here to openly discuss things.

That's your name in my book.

Bernard

 

I'm full of admiration for his entrepreneurial spirit. It's just that the things he was discussing involved making very negative comments about one of his business rivals. Slagging off your rivals on a public forum strikes me as a tad... vulgar, frankly. Whether he's right or not.

 

Paul

[DJM Dave]

I'm full of admiration for his entrepreneurial spirit. It's just that the things he was discussing involved making very negative comments about one of his business rivals. Slagging off your rivals on a public forum strikes me as a tad... vulgar, frankly. Whether he's right or not.

 

Paul

I suppose I should clarify something that I didn't in my last post here.

 

I do not, repeat NOT want Hornby to disappear or suffer. The problem is they are suffering through decisions of others in the past.

This is not good for the hobby In general, and let's be honest here, we need them! We need the brand awareness the name brings to the hobby, we need the Hornby trainsets, the railroad range, the Thomas, as without Hornby, who else will take up 'that' mantle??

 

They ARE British Model railways in my book!

 

Hope that helps?

Cheers

Dave

[Horsetan]

They ARE British Chinese-produced Model railways in my book!

 

Let's not forget the reality.

[Mike at C&M]

I do not, repeat NOT want Hornby to disappear....

And this is a sentiment that all manufacturers are agreeing with.

 

It isn't that if Hornby disappear, everyone else will get a bigger slice of the pie, Hornby is the pie base upon which everyone can be part of that pie.

[DonnyRailMan]

And this is a sentiment that all manufacturers are agreeing with.

 

It isn't that if Hornby disappear, everyone else will get a bigger slice of the pie, Hornby is the pie base upon which everyone can be part of that pie.

 

I think that Bachmann are keeping their powder dry ready to pounce should the banck pull the plug on Hornby as they could ant time they want. Bachmann Hornby TRAINS PLC.