Hornby Annual Results year ended 31 March 2018

[Ozexpatriate]

Now if you left off all the fiddly bits the collectors want and have to be attached labouriously, THEN there would be savings.

Phil, indeed so. After all, this is what the Railroad range is intended to address, so Hornby have paid attention to this.

 

I wonder what sells better* - the high spec items with all the expensive fiddly bits or truly simplified Railroad items with very little in the way of detailed parts?

 

* All costs, volumes, gross profit margins, etc factored in.

Edited June 22, 2018 by Ozexpatriate

[Ozexpatriate]

The more I read the more I see the only winners in this is the factories in China.

 

I suspect there is not enough factories to meet demand, which of course is a natural progression to price increases.

It's worth following Jason Shron's newsletters (both the North American and UK newsletters) for his perspective on Chinese factories.

 

Jason is wonderfully transparent for a model railway company executive and he very frankly describes the issues faced by both suppliers (like his company Rapido) and the factories. The wage situation in Guangdong is a huge factor. Very much like the razor thin margins "enjoyed" by suppliers, the factories are under huge cost pressures themselves, mostly driven by Chinese economic growth.

 

Like many companies today, Hornby is caught up in globalization factors involving corporate raiding, the 2008 banking crisis, and the stunning, sustained growth of the Chinese economy (somewhere in the 7% - 10% per year for each of the last 10 years!). "Business as usual" is a recipe for failure in the face of all these factors. For small companies, (and Hornby is a small company by global measures) any small mistake is almost fatal. It is Hornby's big challenge to manage through this change.

Edited June 22, 2018 by Ozexpatriate

[Ozexpatriate]

... on the whole we have discerning customers who require only very specific models for their layouts, collections, gifts or playrooms.

We know how this refers directly to us and the purchase of locomotives - particularly the reference to "layouts".

 

It makes me wonder however, when was the last time any of us purchased a Scalextric set, even as a gift or for a 'playroom'? How many of us know people who want or have a slot car set?

 

I can't help feeling that when we fixate on what locomotives Hornby should produce, we potentially lose sight of more significant financial implications at Hornby.

 

What if one of the hard choices Hornby should make to return to profitability is to massively de-emphasize (I'll not say shut down) one of the other brands?

Edited June 22, 2018 by Ozexpatriate

[adb968008]

It's worth following Jason Shron's newsletters (both the North American and UK newsletters) for his perspective on Chinese factories.

 

Jason is wonderfully transparent for a model railway company executive and he very frankly describes the issues faced by both suppliers (like his company Rapido) and the factories. The wage situation in Guangdong is a huge factor. Very much like the razor thin margins "enjoyed" by suppliers, the factories are under huge cost pressures themselves, mostly driven by Chinese economic growth.

 

Like many companies today, Hornby is caught up in globalization factors involving corporate raiding, the 2008 banking crisis, and the stunning, sustained growth of the Chinese economy (somewhere in the 7% - 10% per year for each of the last 10 years!). "Business as usual" is a recipe for failure in the face of all these factors. For small companies, (and Hornby is a small company by global measures) any small mistake is almost fatal. It is Hornby's big challenge to manage through this change.

I work with various resale partners and suppliers in my own industry.

I have one partner in particular who stands out to make me smile.

Every time I speak him, things are bad, really bad, red ink everywhere, he’s bleeding dry, we’re screwing him. His figures show 7 figure losses on time he’s invested to make the customer happy etc etc. It’s never ending, every time for years he’s like this. You have to wonder why he stays in business.

 

As OEM supplier, I get speak to his customers to and suppprt him at various trade shows. There it’s different... he’s growing, expanding, year on year growth. He drives a high end Tesla and his vacations are extreme. A customer meal with him is top notch. He’s always professing a full order book and high prices due to demand but “he’ll find a way” to squeeze you in, but discounting is limited and prices are always soon to rise. Safe option he’s the best in the business.

 

You look at the financials.. His business is going for years, his order book is healthy and staff turnover is low. His credit with is excellent, his customers are very long term and way above average.

 

What business managers say to the customer and what people say to their suppliers are very different things, it’s all part of the negotiation and the marketing.

 

I like Rapidos style and approach to marketing, an expensive message hidden in comedy, but remember we are the customer and those videos are not personal diaries but focused sales tools and marketing brochures, in digital form. The messages delivered are preplanned, not just 20 random tourist pictures that just happen to make a funny story about their business in logical order every time. Watching those videos I see an average factory just like everyone else’s, with staff wearing coats at their desks. At the retail end I see higher than average prices and a bleeding heart message on costs. In my simple mind I see a “margin” of difference, which as my sales head says is healthy for the one making the video. No one begged them to enter the UK market and if it wasn’t worth their while they would leave. As they are expanding considerably “Rapido Trains Ltd” was founded as a business with the known characters, in Birmingham 3 weeks ago, its an intention to to be positive sign for their balance sheet not a negative one, so those videos seem to work.

 

Returning to Hornby one minute. There are only 3 entities that control Hornbys future, one of them a bank and two shareholders with 90%. The 10% of shareholders are irrelevant. The message in the annual reports is optional, and often nothing other than accounts and basic business are included. The CEO has written that message, not for the 10% shareholders, or for PAMP or Artemis, but knowing that the Hornby customer base is going to read it. That’s why it’s written not in management terminology but in high street language. It’s a marketing message, acknowledging they understand what we know, but not necessarily how they are planning to fix it.

Edited June 22, 2018 by adb968008

[The Black Hat]

Yes, I find it a bit ironic just how much of the last couple of pages was spent on defining "collector". It's on topic - given the reference in the executive statement, but it's well trodden ground with little consensus.

 

(My emphasis.) I agree and disagree with you here. Increased competition is a real marketplace change and there is no question in my mind that it is a contributor.

 

The turning point in Hornby's fortunes was the shuttering of the Sanda Kan factory. This, in my opinion, was the proximate cause of all their troubles.

 

They had all their manufacturing eggs in one basket. When JP Morgan dumped all their acquisition debt on Sanda Kan, leading to the sale to Kader after the 2008 credit crunch, Hornby continued to do well. Even after Kader/Sanda Kan dumped most of Sanda Kan's customers, Hornby continued to do well. During this period they produced fine models with high quality.

 

The bottom fell out when Kader closed the Sanda Kan factory in the wake of industrial disputes and rising wages. Hornby had to scramble to find alternative suppliers and they have not yet recovered financially.  (The Olympics souvenir diversification decision didn't help either.)  Initially there was very uneven quality control compounded by worse "design clever" decisions.

 

The emergence of more widespread commissioning approaches by companies with far lower overheads than Hornby had it's greatest impact as Hornby scrambled to bring multiple suppliers online. Happily quality has returned, but Hornby has no real operational advantages (other than their expert design team) over their more nimble competitors.

 

Finally we are talking about the key strategic issues which are the driving force behind Hornbys situation. Talking about who models what and how or if they get boxed and stored or displayed is not an issue. Hornby each time get a sale and sales with cashflow back to the business is what Hornby are desperately after.

 

Yes the issues you raised are detrimental to the business. The closure of factories and the legacy of design clever still haunt Hornby, with the losses incurred being a chain around their neck as they carry debt forwards and try to get back to profitability. Hornby I think could come out of this a smaller operation, but the problem will be that they have so much baggage with them unlike some of the new start up companies that are taking market share and able to get product made using slots Hornby could previously have been able to get to more easily at short notice if capacity was there and there were less companies after them. That all means its harder to get products made and to market, but Hornby need these to be ones that will sell quickly and well, so that they can commission follow up runs of popular designs and also pay down some of the debt that the company has, so as to improve the balance sheet.

 

While that course is clear, its then essential that Hornby choose models that will do just that, to get pent up demand released and turn that into a cash flow. Thus, avoiding periods and areas of the prototype where companies have pilled in would be a good move, as there's plenty of others which are not as well served. Bachmann have been more adept at diversifying their range to have products from different areas and eras which helps them tap into several areas of demand - but they too have suffered delays and disruption - even if I'd question the choice of so many midland engines are produced when polls show the popularity of that area has plummeted. Yet, Hornby have shown signs of doing just this, with the J36 an excellent choice to diversify their range. Hopefully, this continues and they bring other choices to market that bring good sales and cashflow to Hornby.  

[The Stationmaster]

The more I read the more I see the only winners in this is the factories in China.

 

I suspect there is not enough factories to meet demand, which of course is a natural progression to price increases.

 

The financial report indicated that Hornby are at mercy of gaps in production to get stuff made.

If you look back at the wider market.. we’ve have 102xx, Barclay, P, Turbot, HUOs, PCAs, Beilhacks, B4’s, 47xx, 07, Janus etc etc show up in the short term. But there is also a wider up take in low volume Swedish, Polish, Australian, US, Dutch, Belgian prototypes coming to those markets too.

 

The suggestion is these have eaten the production slots Hornby may have previously occupied.

Sadly that means the Chinese factories are able to shrug off Hornby and survive without them.

 

 

Seeing the glacial rate of Oxford Rail, i’m not convinced there is capacity there to serve Hornby either. They could invest heavily in expansion of Oxford Rails capacity (conflict of interest ?) but these things take time..maybe that’s what is meant by resolving it by March 31st 2020 ?

The alternative scenario, is armed with their new large bucket of cash Hornby could muscle their way into future production slots to gain space..but if that was the case I wonder where this leaves the massive increase in pipeline of commissions down the road...knowing their seems to be a capacity constraint.

 

I think the only factor we as modellers can recognise, is we will, at least in the short term, get our annual dose of 15-20 new toolings a year in one coloured box or another...but no more or no less than we are currently used to.

 

Has Oxford actually got any model railway production capacity at all?  They certainly own 50% of a factory in Hong Kong which is listed as making diecast models but that is that, with no indication in any of LCD''s published accounts that it has any sort of preponderant or even shared ownership of any factory on the Chinese mainland although it might possibly have a minor financial involvement with one.  The factory they use for model railway items obviously works for people other than Oxford (otherwise it would have closed long ago) so they might have no clout whatsoever in obtaining production etc time in that factory.

 

Some factories in mainland China involved in model railway manufacture are still crying out for business if what I have heard is even half way correct but I suspect the key thing is that they would like a steady stream of business with an equally steady stream of income - for which one could hardly blame them.  In the meanwhile following the Sanda Kan closure Hornby spread its business over numerous concerns with several producing model railway items and according to what I was once told (rightly or wrongly) by a Hornby employee tooling for one particular size of GWR tender had been separately developed by several different factories and each of them was using its own tooling.  Throwing all your eggs into the Sanda Kan basket left Hornby with numerous problems but it would seem that the opposite course might also have brought its own problems as they are just another small customer at several different factories potentially fighting for production time with bigger customers and they can't necessarily get best economic use of their tooling.  Clearly a way forward would be to provide several factories with a constant stream of work and thus become a more important customer for those factories - assuming they can offer enough work.

 

The other thing which it is very easy to overlook in the case of Hornby is that its model railway market and production requirement is spread over far more than our comparatively small off shore island and the producing, say, SNCF loco subjects could be just as important to their bottom line, or even more so, than knocking out a retooled 'Britannia' or whatever and therefore is competing with UK outline models for production slots.  The simple LCD conclusion is that Hornby aren't selling enough product and therefore aren't generating enough revenue and that makes enormous sense.  But what we don't know is the extent to which individual product profit margins are influencing their decisions to make what they do make, or will make if they can solve the capacity problems?

[The Stationmaster]

Phil, indeed so. After all, this is what the Railroad range is intended to address, so Hornby have paid attention to this.

 

I wonder what sells better* - the high spec items with all the expensive fiddly bits or truly simplified Railroad items with very little in the way of detailed parts?

 

* All costs, volumes, gross profit margins, etc factored in.

 

Not just which 'sells better' but as, if not more, importantly which achieves the greatest nett return and gives the best contribution (to the overall profitability of the business).  If margins are  consistent then the gross return on something which sells for, say, £90 is going to be less than on something which sells at, say, £160 although the decider between the two also has to take account of quantity sold and consistency of sales volume over several years

[Ozexpatriate]

Not just which 'sells better' but as, if not more, importantly which achieves the greatest nett return and gives the best contribution (to the overall profitability of the business). 

Thank you Mike, that is exactly the sentiment I wanted to convey.

[90rob]

An unusual thing to say, but may I thank recent posters on this topic for such interesting and careful analysis of the situation. Fascinating stuff...

[adb968008]

.

Edited November 6, 2018 by adb968008

[Ozexpatriate]

A well known individual is quoted as saying that Hornbys strategy is to move away from Toys and focus on Collectors Models, referring to the new “Top Link” range as the way out of Hornbys Financial troubles with a new learning emphasis on detail... does anything really change ?

That comment would prove to be prescient with the move to Chinese manufacturing and the release of the rebuilt Merchant Navy followed by the phenomenal growth of the company.

 

I haven't spent a lot of time looking for a online charting tool for HRN that goes back to the early 2000s* but the increase in Hornby's stock price in the first half of that decade was a rocket ride fueled by manufacturing hi-spec models for enthusiasts in China. Since then, not so much.

 

 

* Most of them only seem to look back 10 years.

Edited June 22, 2018 by Ozexpatriate

[jjb1970]

I suspect that ice hockey and ice skating are far and away the most expensive pursuits for children. The combination of costs for kit and ice time is staggering.  (I have a couple of colleagues whose children pursued these sports over the years and have heard their stories.)

 

It's not cheap, that's for sure, and the girl does figure skating, oh dear..... I really don't mind paying, I'd rather pay for them to do activities like that than have them sat in front of the TV or playing X Box games. As well as the fact it's healthy for them to be active in a sport I also think stuff like that is good for their general development.

[Ron Ron Ron]

...I also have a list of no less than 97 retailers selling model railways in London in 1995.....

I don't know how accurate or comprehensive the data is, but today (2018) the UK Model Shop Directory lists only 4 model railway retailers in the whole of Greater London, increasing to a total of 10 within the M25.

 

.

[Ozexpatriate]

It's not cheap, that's for sure, and the girl does figure skating, oh dear..... I really don't mind paying, I'd rather pay for them to do activities like that than have them sat in front of the TV or playing X Box games. As well as the fact it's healthy for them to be active in a sport I also think stuff like that is good for their general development.

Of course. It's what we do as parents.  A colleague of mine did exactly the same thing. His son played hockey and his daughter figure skated. He delighted in complaining about what it cost, but he wouldn't have done anything differently.

[railroadbill]

 

We know how this refers directly to us and the purchase of locomotives - particularly the reference to "layouts".

 

It makes me wonder however, when was the last time any of us purchased a Scalextric set, even as a gift or for a 'playroom'? How many of us know people who want or have a slot car set?

 

I can't help feeling that when we fixate on what locomotives Hornby should produce, we potentially lose sight of more significant financial implications at Hornby.

 

What if one of the hard choices Hornby should make to return to profitability is to massively de-emphasize (I'll not say shut down) one of the other brands?

 

A very old friend of mine (just one day older than me) is a real petrol head and has a Scalextric layout in his loft as I have a railway layout. He collects specific Scalextric releases and tells me there is a collectors market for these cars. So - maybe- this brand could be as popular as Hornby for sales?

[railroadbill]

I work with various resale partners and suppliers in my own industry.

I have one partner in particular who stands out to make me smile.

Every time I speak him, things are bad, really bad, red ink everywhere, he’s bleeding dry, we’re screwing him. His figures show 7 figure losses on time he’s invested to make the customer happy etc etc. It’s never ending, every time for years he’s like this. You have to wonder why he stays in business.

 

As OEM supplier, I get speak to his customers to and suppprt him at various trade shows. There it’s different... he’s growing, expanding, year on year growth. He drives a high end Tesla and his vacations are extreme. A customer meal with him is top notch. He’s always professing a full order book and high prices due to demand but “he’ll find a way” to squeeze you in, but discounting is limited and prices are always soon to rise. Safe option he’s the best in the business.

 

You look at the financials.. His business is going for years, his order book is healthy and staff turnover is low. His credit with is excellent, his customers are very long term and way above average.

 

What business managers say to the customer and what people say to their suppliers are very different things, it’s all part of the negotiation and the marketing.

 

I like Rapidos style and approach to marketing, an expensive message hidden in comedy, but remember we are the customer and those videos are not personal diaries but focused sales tools and marketing brochures, in digital form. The messages delivered are preplanned, not just 20 random tourist pictures that just happen to make a funny story about their business in logical order every time. Watching those videos I see an average factory just like everyone else’s, with staff wearing coats at their desks. At the retail end I see higher than average prices and a bleeding heart message on costs. In my simple mind I see a “margin” of difference, which as my sales head says is healthy for the one making the video. No one begged them to enter the UK market and if it wasn’t worth their while they would leave. As they are expanding considerably “Rapido Trains Ltd” was founded as a business with the known characters, in Birmingham 3 weeks ago, its an intention to to be positive sign for their balance sheet not a negative one, so those videos seem to work.

 

Returning to Hornby one minute. There are only 3 entities that control Hornbys future, one of them a bank and two shareholders with 90%. The 10% of shareholders are irrelevant. The message in the annual reports is optional, and often nothing other than accounts and basic business are included. The CEO has written that message, not for the 10% shareholders, or for PAMP or Artemis, but knowing that the Hornby customer base is going to read it. That’s why it’s written not in management terminology but in high street language. It’s a marketing message, acknowledging they understand what we know, but not necessarily how they are planning to fix it.

Very insightful, thanks for this.

[Ozexpatriate]

I haven't spent a lot of time looking for a online charting tool for HRN that goes back to the early 2000s*  * Most of them only seem to look back 10 years.

Here's a full view:

 

 

You'll note the dramatic growth of the company up to Ca 2007.

Edited June 22, 2018 by Ozexpatriate

[adb968008]

I don't know how accurate or comprehensive the data is, but today (2018) the UK Model Shop Directory lists only 4 model railway retailers in the whole of Greater London, increasing to a total of 10 within the M25.

 

.

Here’s the summary, in 1995.

 

Is Gatwick still a no go for models ? (It looks like it’s always been the worst place to buy a model.)

The numbers are amazing, but I actually have pages of contact details to back that up !

Edited June 22, 2018 by adb968008

[jjb1970]

I really don't envy the Hornby senior management team. We've heard a lot of stories about them being in the last chance saloon for years now but this time I think it's true. They've found a bank willing to give them a further credit line but it's not one f the usual suspect banks, a bank which is apparently receiving monthly progress reports. The fact they found that credit line is probably a bit of a coup for the management team but the latest results are dire and follow quite a few years of very poor results, but the fact they had to go off piste and are subject to monthly reviews tells a story itself. I suspect they're now in the unenviable position of still having a potential route out of this mess but one where they've used up the proverbial nine lives and where they can't make any more mistakes otherwise the plug will be pulled.

[Ozexpatriate]

A very old friend of mine (just one day older than me) is a real petrol head and has a Scalextric layout in his loft as I have a railway layout. He collects specific Scalextric releases and tells me there is a collectors market for these cars. So - maybe- this brand could be as popular as Hornby for sales?

In the 2017 Annual Report, Hornby did actually share the breakdown. The numbers are as follows: (percentages are my quick calculations, careful observers will note some roundup)

 

Model rail: ........... £22m ... 48%

Slot car: ............. £12m ... 26%

Plastic modelling: ..... £6m ... 13%

Collectible models: .... £4m ...  9%

Specialist paints ...... £2m ...  4%

 

Model rail is the lion's share of the business and is almost the majority share. We don't know the relative profitability - particularly in the absence of heavy discounting - of each brand.

 

Scalextric is significant.

Edited June 22, 2018 by Ozexpatriate

[adb968008]

In the 2017 Annual Report, Hornby did actually share the breakdown. The numbers are as follows: (percentages are my quick calculations, careful observers will note some roundup)

Model rail: ........... £22m ... 48%

Slot car: ............. £12m ... 26%

Plastic modelling: ..... £6m ... 13%

Collectible models: .... £4m ... 9%

Specialist paints ...... £2m ... 4%

 

Model rail is the lion's share of the business and is almost the majority share. We don't know the relative profitability - particularly in the absence of heavy discounting - of each brand.

 

Scalextric is significant.

Don’t forget model rail is 1 number for the unit, it covers European railway ranges (Jouef) too.

The figures quoted worldwide don’t breakdown the sectors, it’s just 1 number for that region.

Similar the 38% margin preferred doesn’t breakdown which sectors or geographies produce the most margin.

 

I would assume this is to protect commercial sensitivities.

 

However one thing I found odd in the report...perhaps..

 

“The Board considers the business from a geographic perspective. Geographically, management considers the performance in the UK, USA, Spain, Italy and the rest of Europe.”.

 

I have to question how £940,000 from Spain, and £1.1mn in Italy is a sound enough business to have premises in those markets called out, indeed the total “European” Number would only represent £4.7mn, could this nót be managed from the UK ?

 

Hornby reports from these regions, however this forum does have a high proportion of Australian modellers, whom obviously use this site to get information on the UK OO scene, and many whom often buy in the UK to export to Australia and New Zealand.

 

Given this anomaly, wouldn’t it make sense for Hornby to have a presence in Australia and serve this market directly ?

Edited June 22, 2018 by adb968008

[Ozexpatriate]

Given this anomaly, wouldn’t it make sense for Hornby to have a presence in Australia and serve this market directly ?

Hornby traditionally sold (and still sells) to independent resellers in the antipodes. Prices through these outlets (presumably due to import tariffs, but I don't know) are eye-wateringly high.

 

Many enthusiasts down under purchase online from UK outlets.

 

At one point (in the 1960s and 1970s) Hornby (more accurately Tri-ang)  had dedicated product lines for Australia.

 

I believe this website was created by an enthusiast down under, though I might be wrong about that. You can find many of the items offered for the Australian market here. (Search "Aust").

Edited June 22, 2018 by Ozexpatriate

[adb968008]

Hornby traditionally sold (and still sells) to independent resellers in the antipodes. Prices through these outlets (presumably due to import tariffs, but I don't know) are eye-wateringly high.

 

Many enthusiasts down under purchase online from UK outlets.

 

At one point (in the 1960s and 1970s) Hornby (more accurately Tri-ang) had dedicated product lines for Australia.

 

I believe this website was created by an enthusiast down under, though I might be wrong about that. You can find many of the items offered for the Australian market here. (Search "Aust").

This Category is the Tariff code for model railways:

 

9503.00.60 --- Goods, as follows:

(a) electric trains, including tracks, signals and other accessories therefor;

(b) reduced-size ("scale") model assembly kits, whether or not working models

23 .. Electric trains, including tracks, signals and other accessories therefor

24 No Reduced-size (scale) model assembly kits, whether or not working models, excluding 9503.00.60.23

 

Both UK and Australia is import tariff free

 

Australia

 

https://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/importing-goods/tariff-classification-of-goods/current-tariff-classification/schedule-3/section-xx/chapter-95

 

UK

https://www.trade-tariff.service.gov.uk/trade-tariff/commodities/9503003000

 

US - Tariff free unless from North Korea / Cuba.. then it’s 70%.*

https://hts.usitc.gov/view/Chapter%2095?release=2018HTSARevision5_1

 

* anything’s possible to change in the current mad climate.

Edited June 22, 2018 by adb968008

[Andy Hayter]

“The Board considers the business from a geographic perspective. Geographically, management considers the performance in the UK, USA, Spain, Italy and the rest of Europe.”.

 

I have to question how £940,000 from Spain, and £1.1mn in Italy is a sound enough business to have premises in those markets called out, indeed the total “European” Number would only represent £4.7mn, could this nót be managed from the UK ?

 

 

 

I think since the last reorganisation the regions are indeed managed from the UK, if that is what you meant.

 

If however you meant served 100% from the UK then I see a problem.  The job of a salesman is not just to go into (or phone up/email/facebook) the model shop in Valencia, tell them about the latest AVE models and take orders.  It is also to try and pick up market intelligence - what did customers think about the last model.  How are customers reacting to the announcement form (name competitor).  And your  average Valencian model shop owner probably does not speak a great deal of English, so "How dido your cliento react to the newo modelo from Trix?"  will probably not cut the ice.  So you need fluent Spanish, French, Italian and German speakers to visit and communicate by other means with your trade customers in Europe.

 

You probably need therefore a locally based salesperson - maybe a couple for bigger markets - but managed from Sandwich by one person for all regions.

 

I can see why Spain in particular might raise questions based on the numbers, but that is an in/out debate.

[robmcg]

Hornby traditionally sold (and still sells) to independent resellers in the antipodes. Prices through these outlets (presumably due to import tariffs, but I don't know) are eye-wateringly high.

 

Many enthusiasts down under purchase online from UK outlets.

 

At one point (in the 1960s and 1970s) Hornby (more accurately Tri-ang)  had dedicated product lines for Australia.

 

I believe this website was created by an enthusiast down under, though I might be wrong about that. You can find many of the items offered for the Australian market here. (Search "Aust").

 

As an NZer I believe the high local retail prices for Hornby models are because of distribution by a wholesaler to bricks and mortar shops which have high overheads and very low turnover of stock.  I don't know about Australia, but NZ has no tariffs on toys so far as I know, sales are subject to our equivalent of VAT  which we call 'goods and services tax' at 12.5%, rendering prices far higher than VAT-free  GST-free imports from the UK, if under NZ$400 (c£200).

 

Australian prices are astronomical, I have seen  UK RRP priced £120 engines for sale on Amazon or from a 'large respected trusted retailer' for around AU$599 or £260.

equivalent.

 

We don't have the buyers to support a wide selection of stock, basically, for model engines and carriages at least.