Hornby secure £18 million loan

[adb968008]

There is a sort of inverted elitism when it comes to brass. Plain boxes tend to be the norm. Happiness comes in a plain green box I always say (although at the end OMI changed to a glossy blue box with yellow trim. Tenshodo used a plain silver box, Metropolitan a gold box, Fulgurex brown, Musashino a maroon box etc. However the boxes had a nice quality feel and conveyed a premium feel.

Lovely timing, today I received my first RTR UK outline coach in Brass, it is quite simply the nicest coach I’ve ever owned.

£150, rtr from eBay.

If anyone’s interested Ellis Clarke has more than 10, in this and rebuilt condition (as the preserved operational one at the GCR in Maroon).

 

Oh and er.. the box, is plain and simple.

Edited June 14, 2018 by adb968008

[jjb1970]

Lovely timing, today I received my first RTR UK outline coach in Brass, it is quite simply the nicest coach I’ve ever owned.48918B17-0E4E-4214-971B-884838402366.jpeg77EB0954-3D4A-41E2-8C1B-3BB2B15109B5.jpeg

£150, rtr from eBay.

If anyone’s interested Ellis Clarke has more than 10, in this and rebuilt condition (as the preserved operational one at the GCR in Maroon).

 

Oh and er.. the box, is plain and simple.48FEE652-3C56-4AD2-9D91-A395AFC19BF7.jpeg

Lovely!! Careful though, once you get a taste for high end brass nothing else is quite the same........

Edited June 14, 2018 by jjb1970

[jjb1970]

When the product speaks for itself you don't need a fancy box. I actually like the simple look and quality feel of quality of boxes like this;

[Mike Storey]

Outstanding. So we have found a way for Hornby to save somewhere between £30k (according to some) and perhaps over £100k according to others. Only another £9m to go.

 

Every little helps?

[rockershovel]

Completely agree, if that was the case. But Hornby have a major R&D team, with initial design capability. They are not, therefore, an uninformed commissioner/wholesaler. They need to re-introduce CAD ability (IMHO) to take greater control over their production line. That initially increases costs, but leaves them far more capable in determining ultimate practicability against target cost.

 

Apart from getting their overheads well down, which they have already acknowledged and are actioning, their key objective must then be to create a production strategy which fulfills demand at a marketable price. Understanding whether that demand is more of the same, but better, or radical change, is the 64 thousand dollar question. We will know more next week, I hope.

Agreed, as far as it goes. But, I didn’t describe Hornby as an “uninformed commissioner and distributor”. What I said was that by wholly outsourcing their production, they lost the ability to control that production, the ability to learn about the process from that production, and the ability to prevent those producers offering their capacity to anyone capable of assembling a design and/or marketing team.

 

Hornby are now at risk from anyone prepared to put up the overhead. Kader, previously a supplier to Palitoy (another British company run into the ground by such practices) have shown that clearly by their control of Bachman.

[rovex]

Outstanding. So we have found a way for Hornby to save somewhere between £30k (according to some) and perhaps over £100k according to others. Only another £9m to go.

 

Every little helps?

Well perhaps sacking half the board and saving on their exorbitant salary and pension conributions would get us a good way there! Edited June 15, 2018 by rovex

[adb968008]

Well perhaps sacking half the board and saving on their exorbitant salary and pension conributions would get us a good way their!

Taking the confidence of Hornbys masters, shareholders and the recently secured £18mn credit facility with them.

 

Great idea, guaranteed to send them over the abyss quickly.

Edited June 15, 2018 by adb968008

[rovex]

Taking the confidence of Hornbys masters, shareholders and the recently secured £18mn credit facility with them.

 

Great idea, guaranteed to send them over the abyss quickly.

Possibly but a well paid board didnt help Carillion! Edited June 15, 2018 by rovex

[adb968008]

Possibly but a well paid board didnt help Carillion!

The new CEO, COO and the return of the 35 yr veteran to the company may have slowed things, down, put prices up and somewhat upset the modeller..

but they have put confidence into the company, it’s shareholders and their customers (which isn’t you and me.. it’s the retailer).

 

They have stopped the ship lurching out, from one crisis to another, We find out how they plan to stop the ship sinking on Monday.

 

I’m sure if that £30k graphics designer was capable of negotiating with PAMP, Barclays and the Stock Exchange, they would have let him, but each person to their own jobs is better, jealousy of who does what and for how much is not going to solve any problem, and means failure is equally shared in the end when the ship sinks...everyone’s equal in the lifeboat at the job centre.

Edited June 15, 2018 by adb968008

[Mike Storey]

Agreed, as far as it goes. But, I didn’t describe Hornby as an “uninformed commissioner and distributor”. What I said was that by wholly outsourcing their production, they lost the ability to control that production, the ability to learn about the process from that production, and the ability to prevent those producers offering their capacity to anyone capable of assembling a design and/or marketing team.

 

Hornby are now at risk from anyone prepared to put up the overhead. Kader, previously a supplier to Palitoy (another British company run into the ground by such practices) have shown that clearly by their control of Bachman.

 

Yes, I see what you mean. I would guess that the new link to Oxford's production facility will obviate a large part of that.

[APOLLO]

Well perhaps sacking half the board and saving on their exorbitant salary and pension conributions would get us a good way there!

 

Agree. I received the National Grid Annual report yesterday. The Chairman and directors wages, bonuses, performance pay and share options etc are astronomical sums, Some are well over £3 million in total. Are they worth it ? - I don't know but their pay increases year on year are not small numbers either.

 

I know Hornby are nowhere near this - it's all proportional, but none are on minimum wage !!!!!!!!!!

 

Brit15

[adb968008]

Yes, I see what you mean. I would guess that the new link to Oxford's production facility will obviate a large part of that.

That doesn’t give me hope... the Mk3’s are coming slower than animals on Noah’s ark.

The dean goods weren’t much faster.

 

If the entire Hornby range moved to Oxfords plant, based on current performance the real Class 800’s will be obsolete before the next lot is delivered.

[dibber25]

Agreed, as far as it goes. But, I didn’t describe Hornby as an “uninformed commissioner and distributor”. What I said was that by wholly outsourcing their production, they lost the ability to control that production, the ability to learn about the process from that production, and the ability to prevent those producers offering their capacity to anyone capable of assembling a design and/or marketing team.

 

Hornby are now at risk from anyone prepared to put up the overhead. Kader, previously a supplier to Palitoy (another British company run into the ground by such practices) have shown that clearly by their control of Bachman.

 

Wasn't Palitoy owned by General Mills, an American company which diversified into toys when 'diversification' was all the rage, and got out again equally quickly when it ceased to be? (CJL)

[Legend]

Wasn't Palitoy owned by General Mills, an American company which diversified into toys when 'diversification' was all the rage, and got out again equally quickly when it ceased to be? (CJL)

 

Yes  but as Rockershovel points out Kader were previously a supplier to Palitoy/Mainline and made most , if not all of the Mainline Range .   When General Mills/ palitoy got out of model railways , didn't Kader set up Bachmann UK as an outlet for the tooling?

[adb968008]

Yes  but as Rockershovel points out Kader were previously a supplier to Palitoy/Mainline and made most , if not all of the Mainline Range .   When General Mills/ palitoy got out of model railways , didn't Kader set up Bachmann UK as an outlet for the tooling?

Replica and Dapol tried first

[The Stationmaster]

The new CEO, COO and the return of the 35 yr veteran to the company may have slowed things, down, put prices up and somewhat upset the modeller..

but they have put confidence into the company, it’s shareholders and their customers (which isn’t you and me.. it’s the retailer).

 

They have stopped the ship lurching out, from one crisis to another, We find out how they plan to stop the ship sinking on Monday.

 

I’m sure if that £30k graphics designer was capable of negotiating with PAMP, Barclays and the Stock Exchange, they would have let him, but each person to their own jobs is better, jealousy of who does what and for how much is not going to solve any problem, and means failure is equally shared in the end when the ship sinks...everyone’s equal in the lifeboat at the job centre.

 

I'm not so sure about the confidence bit.  Definitely so in the case of retailers (although is it matched by orders I wonder?).  Clearly the jury is still out, or even considering a 'guilty' verdict, in the case of some end customers such as us lot but things might change when we getting the summing-up from LCD next week.  However Phoenix Asset Management have obviously demonstrated their confidence in something by making a £6 million loan to help keep Hornby afloat.

 

However it definitely hasn't worked as far as wider shareholders and the stock market are are concerned.  The share price stood at 27.63p on 02 October last, the day before the LCD appointment, along with SK and TM, was announced,  it then rose to a peak of 33.50p on 12 October and stood at 28.50p on 02 January, the first trading day of 2018 I believe.  Since then it has dropped to a low of 20.50p at the beginning of March (its lowest point in the past 3 years) and has gradually struggled back up to close at 25.40p yesterday having risen by 1p after the announcement of the new loan/credit facility on the 6th of this month.  

 

So in shareholder terms, or rather share trading terms, the new team have not exactly been kindly treated by the stock market and potential investors since the initial reaction to the appointments and in fact the share price had fallen lower than the pre-announcement figure by 24 November when it dropped to 26.50p.  In the past month or so the share price has been running at about 7-8p lower than it was year ago knocking roughly 20-25% off the share value of the company over that timescale.  So while Phoenix no doubt have some confidence thus far the stock market doesn't share it although we obviously must not rule out significant gains if the next week's statement hits the right notes.

 

 

Yes  but as Rockershovel points out Kader were previously a supplier to Palitoy/Mainline and made most , if not all of the Mainline Range .   When General Mills/ palitoy got out of model railways , didn't Kader set up Bachmann UK as an outlet for the tooling?

 

Full story here -

 

https://www.collectors-club-of-great-britain.co.uk/model-railways/articles/history-of-Bachmann-branchline-uk

[The Stationmaster]

Yes, I see what you mean. I would guess that the new link to Oxford's production facility will obviate a large part of that.

Mike, what production facility would that be?    Oxford havea share in a factory in Hong Kong which makes diecast models and they possibly have some sort of involvement with a factory on the Chinese mainland which makes model railway items for the US and Japanese markets (and used what was basically a c. 30-40 year old Athearn motor and drive arrangement in the Radial tank).  But in view of Chinese legal requirements I don't think you'll find they actually 'own' (in the usual understood by us sense of the term) a factory on the Chinese mainland any more than any other off-(Chinese) shore model company owns a factory in China.

[adb968008]

.

Edited November 6, 2018 by adb968008

[Mike Storey]

Mike, what production facility would that be?    Oxford havea share in a factory in Hong Kong which makes diecast models and they possibly have some sort of involvement with a factory on the Chinese mainland which makes model railway items for the US and Japanese markets (and used what was basically a c. 30-40 year old Athearn motor and drive arrangement in the Radial tank).  But in view of Chinese legal requirements I don't think you'll find they actually 'own' (in the usual understood by us sense of the term) a factory on the Chinese mainland any more than any other off-(Chinese) shore model company owns a factory in China.

 

Yep, that link. I don't recall using the word "own" Mike. I had three years' experience trying to import large voltage regulator types of appliances (as a part-owner and director of a re-seller for B2B sales), which were highly innovative and leading edge kit in theory (and the prototypes were received warmly by potential clients on a dozen trial sites) which were invented by a firm in Croydon, who claimed to be based in Hong Kong and who also claimed to manufacture there at their own factory. It turned out they not only did not own the factory, but they only assembled the final units, from the components made across five or six other factories in mainland China. QC was a huge problem, and they demanded 50% payment up front before we had sold any, so not only did we have problems breaking the monopoly of a couple of big boys in the UK and Irish markets, with cash flow and credit rating problems, we also had the embarrassment of a Hong Kong firm delivering spasmodically and denying there were any real quality problems and accusing us of badly installing them (also not true, as we proved). Currency fluctuations with the HKD were also a crazy nightmare, as we were too new to hedge. Many parallels, I think, to the current model railway scene.

 

We switched to an Egyptian firm in the end, making a different version of the same thing, and it took off.

 

So I do know and understand how it all works.

Edited June 15, 2018 by Mike Storey

[LBRJ]

Pheonix Asset Management own 70odd % of Hornby shares.

Somewhat cynically I edge toward thinking that their cash injection is just that, an injection of cash to keep things going; and to get the bank to "play ball" not so much an investment.

[jjb1970]

Interestingly, Hobby Master (a purveyor of really rather good diecast aircraft and military models) have moved production to Bangladesh. Other model producers seem to be moving to the sub-continent too.

[Clearwater]

Pheonix Asset Management own 70odd % of Hornby shares.

Somewhat cynically I edge toward thinking that their cash injection is just that, an injection of cash to keep things going; and to get the bank to "play ball" not so much an investment.

No, I think it’s more the other way round: the bank has required the owner to put more capital at risk before they’d agree to lend.

[LBRJ]

No, I think it’s more the other way round: the bank has required the owner to put more capital at risk before they’d agree to lend.

 

That's really a clearer way of saying what I meant!

The bank may have said "show us the colour of your money" or words to that effect.

[rockershovel]

..... moving to The Sub-Continent to improve QC? I believe the expression rhymes with “clucking bell”, as Mr Blackadder so appositely summed it up...

Edited June 16, 2018 by rockershovel

[BWsTrains]

..... moving to India to improve QC? I believe the expression rhymes with “clucking bell”, as Mr Blackadder so appositely summed it up...

Very funny but I think 163 million Bangladeshi would be very upset if you called them Indian.

 

If production there gets delayed it can always be blamed on a typhoon or flood, that poor country seems to get far more that it's share of misfortunes.

Edited June 15, 2018 by BWsTrains