Hornby's financial updates to the Stock Market

[Clearwater]

Being a listed company chief executive is a bit like being a football manager. Do well and a bigger company will pay you more. Lose your shareholders money, it's the sack.

 

Suspect the chairman and broker have had some to the point conversations with shareholders in the last few days and over the weekend

[Ron Ron Ron]

No doubt there will be a generous financial package being handed to the departing CEO.

Another £million or two being written off ???

 

 

 

.

[Joseph_Pestell]

Being a listed company chief executive is a bit like being a football manager. Do well and a bigger company will pay you more. Lose your shareholders money, it's the sack.

 

Suspect the chairman and broker have had some to the point conversations with shareholders in the last few days and over the weekend

 

The football club analogy works well. Do the shareholders actually have any real understanding of the market (game)? Is it the CEO's (Manager's) fault really or is he being forced to do things that he knows are wrong? He may have "failed" but gets a nice big payout anyway.

[Gwiwer]

The warning was there....

 

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9436936/Ladbrokes-fires-digital-director-Richard-Ames-over-botched-strategy.html

 

 

The stock marker reacts immediately to the news.....

 

http://www.cityam.com/234583/Hornby-chief-executive-richard-ames-is-out-following-profit-warnings-and-concerns-over-its-banking-covenants

 

 

 

.

 

The CityAM link wants me to disable my Adblocker and firewall in order to read it - it won't display the text until I'm effectively funding the site by accepting ads.  It's my choice to not do so.  

 

The share price is rising slowly.  I can see that elsewhere and can be thankful for what it's worth that the head rolled just in time.  His may yet not be the only one.

[DavidH]

The warning was there....

 

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9436936/Ladbrokes-fires-digital-director-Richard-Ames-over-botched-strategy.html

.

 

But from that article: "Some insiders suggest Mr Ames’ departure is simply designed to offer up a scalp to protect Mr Glynn."

 

 

 

 

Edited February 15, 2016 by DavidH

[Ian Hargrave]

But from that article: "Some insiders suggest Mr Ames’ departure is simply designed to offer up a scalp to protect Mr Glynn."

 

And perhaps it should be underlined for readers of this forum that the article refers to Richard Ames departure from Ladbroke's in 2012 and not the current situation with his departure from Hornby.

[JohnR]

I think the point is that this outcome was predicted when he was appointed, by looking at what had happened at Ladbrookes.

[Godfrey Glyn]

DavidH wrote

 

But from that article: "Some insiders suggest Mr Ames’ departure is simply designed to offer up a scalp to protect Mr Glynn."

 

 

Perhaps you should be careful when working with a Glynn, much safer with the four letter version!!

 

This removal may indeed be cosmetic but hopefully it will help to stabilise things for the firm. I suspect we will have to wait a long time to find out what exactly has happened at Hornby. I am sure someone in a business school will be working on it as we ponder.

 

I am always astonished how often in so many types of business - manufacturing, retail, football and even in something like Further Education - that highly paid people who have not been successful in one organisation can get appointed very quickly to a new CEO post in another organisation and make a mess of that too. I do hope the Hornby board takes great care when making its next appointment, my particular dream of owning one or two original Merchant navies this autumn may depend on it.

 

all the best

Godfrey

[rovex]

To be honest it was probably inevitable given the scale of the proposed losses and the loss in shareholder value.

 

So any volunteers for new MD, I have a slot in my diary for a few days a week. 

 

Dean

[71H]

No doubt there will be a generous financial package being handed to the departing CEO.

Another £million or two being written off ???

 

 

 

.

 

 

You forgot his pension pot Ron

[Hroth]

You forgot his pension pot Ron

Perhaps that could be funded in Hornby PLC shares? 

[DJM Dave]

To be honest it was probably inevitable given the scale of the proposed losses and the loss in shareholder value.

 

So any volunteers for new MD, I have a slot in my diary for a few days a week. 

 

Dean

 Let's hope that this is the start of the revival that continues to see great products, a more defined mainstream to railroad demarcation, way better margins for stockists and an end to direct sales in direct competition to stockists.

 

However with most of the board still there (minus the one) I can't truly see it happening unless the Lightning that has struck galvanises the board into positive action........the trouble is, shareholders want dividends, and profit year on year so it's tricky especially with the current year on year debt.

 

I'd have preferred the company to have gotten broken up, with someone buying the railway side and running it like a model railway business rather than a pure profit making industry.

[t8hants]

I am always astonished how often in so many types of business - manufacturing, retail, football and even in something like Further Education - that highly paid people who have not been successful in one organisation can get appointed very quickly to a new CEO post in another organisation and make a mess of that too.

 

there is no point in having an old boy network if it doesn't bring some benefits.  That's the joy of being a CEO, absolutely no responsibility, if the level of responsibility is measured in the level of sanction you suffer for failure.

 

I guarantee you the office cleaner has more 'responsibility' resting on their shoulders than the clown whose office they clean - the office cleaner looses something worth a fiver, and all hell will descend upon them, the CEO may loose millions, but walk away with a large golden handshake, a pension settlement, perhaps following a period of 'Gardening Leave' to play golf, lifestyle more or less unruffled.

Edited February 15, 2016 by t8hants

[The Stationmaster]

Being a listed company chief executive is a bit like being a football manager. Do well and a bigger company will pay you more. Lose your shareholders money, it's the sack.

 

Suspect the chairman and broker have had some to the point conversations with shareholders in the last few days and over the weekend

Surely the big question about Ames was why on earth did they hire him in the first place?  And with a track record like his he would be in line for a major honour if he was a very senior Civil Servant.

[Rob F]

I am always astonished how often in so many types of business - manufacturing, retail, football and even in something like Further Education - that highly paid people who have not been successful in one organisation can get appointed very quickly to a new CEO post in another organisation and make a mess of that too.

 

there is no point in having an old boy network if it doesn't bring some benefits.  That's the joy of being a CEO, absolutely no responsibility, if the level of responsibility is measured in the level of sanction you suffer for failure.

 

I guarantee you the office cleaner has more 'responsibility' resting on their shoulders than the clown whose office they clean - the office cleaner losses something worth a fiver, and all hell will descend upon them, the CEO may loose millions, but walk away with a large golden handshake, a pension settlement, perhaps following a period of 'Gardening Leave' to play golf, lifestyle more or less unruffled.

<Pedant mode very firmly on> Not wishing to single out t8hants in any way but are the words 'lose' and 'losing' the most widely misspelt on this forum, often rendered as 'loose' and loosing'? I wonder why that should be? <Pedant mode off> 

[Mike Storey]

Share price now risen to 33.5p, up about 37% since start of trading. The market liked that announcement at least!

 

I copy this quote from the Guardian today, the contents of which I have not seen in any other explanation (my use of bold):

 

Sales in Britain recovered in December but then plunged after Christmas as retailers decided not to order new stocks.

 

It doesn't show this as a quote from Hornby so maybe it is speculation from the journalist.

[The Nth Degree]

I'm the proud owner of 3000 shares this morning. It's looking quite good for a short-term investment, especially if a renegotiated finance facility can be quickly put in place before next month.

[t8hants]

Not wishing to single out t8hants in any way but are the words 'lose' and 'losing' the most widely misspelt on this forum, often rendered as 'loose' and loosing'? I wonder why that should be?

 

Thanks for pointing that out - I would have been far more miffed if my contribution had been ignored!

[Ron Ron Ron]

The removal of the CEO won't change the immediate precarious financial situation Hornby find themselves.

The underlying problems are still there and the losses are mounting.

If a newly appointed CEO is given the remit to change course and adopt different strategies to those currently in place, any benefits of such a change will take time to filter through and no doubt cost money to implement.

How much time will they be given and what short term remedial action will be required of them by the banks?

 

The departure of the CEO would be expected to cause a rally on the share price and thus restore some value in the company.

That's useful, if not essential to the major creditors if that value has to be realised in securing or recovering the debts.

If restructuring, or selling off bits, or all, of the company is going to be considered, then anything that will pump up the share price is useful.

 

I expect the annual report will be full again of "Jam tomorrow", just like the last 7 years.

 

 

 

.

[Ron Ron Ron]

.....I copy this quote from the Guardian today, the contents of which I have not seen in any other explanation (my use of bold):

 

Sales in Britain recovered in December but then plunged after Christmas as retailers decided not to order new stocks.

 

It doesn't show this as a quote from Hornby so maybe it is speculation from the journalist.

 

That isn't news Mike.

Although I don't think anyone has mentioned that in this thread, it has been mentioned elsewhere on-line, including on another forum.

Many retailers have reduced their orders of have held back or desisted from dealing with Hornby.

Do you blame them?

 

 

.

[Ian J.]

To be honest it was probably inevitable given the scale of the proposed losses and the loss in shareholder value.

 

So any volunteers for new MD, I have a slot in my diary for a few days a week. 

 

Dean

 

I'm unemployed at the moment, so available to do the job. Do you think I would make a bigger hash up of it than Mr. Ames?

[Coryton]

It's a horrible idea!

 

Quite apart from the most efficient place for this work to happen being the factory in China it rather assumes retailers currently spend their time doing nothing at all.

And it assumes they have the tricksy fingers necessary.

And what about liability? If the model doesn't run it's Hornby's fault, but now if the retailer spills glue on the model, as well as losing his former infinitely long tea break he now has to fork out to replace a model he never wanted to mess with in the first place.

 

Well quite. I probably should have used a less ambiguous word than "interesting". "Courageous", perhaps, in the Yes Minister sense?

[Nearholmer]

Fascinating.

 

If one looks at the history of toy train / model railway makers, it becomes clear that the real value (as opposed to price) of a company boils down to three things:

 

- talent (the relatively small number of people who actually know how to get stuff designed and made, or who actually know the market well-enough to be able to sell stuff);

 

- tooling;

 

- brand name.

 

These three things tend to "resurface" elsewhere when a company crashes (which in model railways is usually because of crazy over-diversification of products, and/or over-production, both of which tie-up money big time).

 

The Hornby brand name must be worth a few bob, since it is the only one in the UK that non-fans recognise, so that will survive whatever happens next. The tooling is the worry for hobbyists. The people we can only wish the best of fortune.

 

Kevin

[Coryton]

The  cost   is  minimal,  it  matters  not  whether  the  loco the loco is to have  a  digital  socket  or  just  a  PCB  the  wiring   would be  the  same, unless of  course it  is  suggested  that  wiring should  revert  to  the  good  old  days    when  the  pick up wirng  went  straight  to  the  motor terminals, to  save  a  few   pence?  and  make  the  wiring less complex?

 

Genuine question: if running on analogue, what is the advantage of bringing pick-up wires to a PCB and then back out to the motor?

 

And it wasn't so much the cost of the wire I was thinking of, but the time taken to solder - potentially 12 joints instead of 4. Also more to fail and have to be re-worked, assuming they test pick-up on all wheels.

 

Clearly it would be ridiculous to design different DCC-ready and non DCC-ready versions of the same model, but presumably analogue modellers are paying a (small) premium for DCC-readiness they (think they?) will never use.

[Ron Ron Ron]

I'm unemployed at the moment, so available to do the job. Do you think I would make a bigger hash up of it than Mr. Ames?

 

Has Mr. Ames made a hash of it, or has it been circumstances or a failure elsewhere that he either didn't recognise, or wasn't told of earlier?

As I said earlier, his departure may have been designed to recover the share price. I can't see how it will change the company's immediate financial situation, other than restore some of its value.

 

 

 

.