Hornby financial update

[stonesboy]

For those that are interested.

 

Released: 9 April 2019

Hornby PLC

 

9 April 2019

 

Hornby PLC

("Hornby" or the "Group")

 

Hornby PLC

Trading Update - Year Ended 31 March 2019

Hornby Plc, the international hobby products Group, provides an update to shareholders on the progress of the Group's new turnaround strategy which was outlined in the 2018 Annual Report and Accounts.

Revenue for the year is lower than last year primarily due to a shortage of stock arriving on time and in full in the first half of the year. We have previously discussed the difficulties caused by technical specifications and purchase orders being sent to the factories late in 2017. For more details, please refer to the Executive chairman's statement of the annual report for the year ended 31 March 2018.

Despite the tailing off of these legacy issues, our underlying margins have improved and the reduction in overheads has continued. The focus on doing more with less through continued cost-cutting and efficiency improvements has resulted in a significantly lower underlying Group loss compared to last year. The loss is in line with the board's expectations despite the reduced product availability and lower sales in the first half of the year.

This is a real achievement under the circumstances and we are grateful to our passionate and hardworking staff who are working tirelessly to get the Group back to profitability.

As previously explained, we are rebuilding trust with our customers and suppliers. This takes time, but the initial signs are encouraging as we move into the first full year where all the new products and marketing strategies have been designed by the new management team.

More information on the progress of the turnaround strategy will be included in the full year results announcement, which will be released in June.

[Kingzance]

Hopefully this presages the return to profitability and hence to longevity for this business. Despite its recent issues and the trend for crowd-funding or dealer commissioned models, we need the likes of Hornby and Bachmann as RTR specialist to survive for the hobby to prosper and to introduce new blood to it.

 

 

[The Stationmaster]

Having just read it I find bits of it rather disingenuous to say the least.  The claim about moving ' into the first full year where all the new products ...' 'habve been designed by the new management team.' is clearly erroneous as with the two year lead time there are obviously products which were well under development before the new team arrived.  The new team has no doubt pressed the 'go' button for full production, but some items - such as the GW non-gangwayed stock - would have been pretty close to it and it would have been an awful lot of work and money to throw away if it had not gone ahead.

 

Mind you the Daily. Telegraph's business section has got things really off kilter having understood part of the statement to say that Hornby could not get products into its own shops and I think it also rather misreads the strengths and weaknesses of the business.  Which, fortunately, is very definitely not so in the case of LCD and the way he has clearly been steering the strategy of the business with great emphasis on overhead cost reduction,  recognition of the value of the Hornby brand together with positive moves to rebuild retailer confidence

 

What we really don't know as yet is whether or not changes to marketing strategy will work, or indeed to what extent that strategy has changed apart from the important support to it coming from the changes wrought by LCD.  Hopefully the company will succeed but it is working in several very different market areas at once and whether it can keep on top of all of them will be interesting to see.

Edited April 10, 2019 by The Stationmaster
correct a small typo

[Mike at C&M]

Two related things have been noticeable over the last few months: An increase in the amount of product coming into the shop, which then gives a much higher monthly amount payable to Hornby.  From the shop floor, it appears to us that Hornby are definitely moving in the right direction, financially.

[adb968008]

57 minutes ago, 87029 said:

Two related things have been noticeable over the last few months: An increase in the amount of product coming into the shop, which then gives a much higher monthly amount payable to Hornby.  From the shop floor, it appears to us that Hornby are definitely moving in the right direction, financially.

Is the product leaving the shop at an equal churn rate ?

if so, then all is definitely good.

Edited April 10, 2019 by adb968008

[Widnes Model Centre]

10 hours ago, adb968008 said:

Is the product leaving the shop at an equal churn rate ?

if so, then all is definitely good.

 

 

To add to 87029’s post. We have also seen an increase in Hornby  products resulting in larger payments to them. Equally we have seen a very large increase in sales in both Hornby and Airfix products. Still a great deal of room for improvement in Humbrol which continues to frustrate. 

 

Top Sellers have been track and the 66 locos which have sold incredibly well. No matter what the opinions of the 66 are, they have sold out in most derivatives and sold out at Hornby. That has got to be good for the company.

 

Hornby continue to work with retailers, in no small way a lot of that can be put the way of the Company area representatives and Simon Kohler.

[adb968008]

Thats very encouraging.

 

if the big guys, Rails etc agree then it would appear Hornby has successfully grown the pie, rather than moving the slices about.

 

The annual report in June could be encouraging if sales are up and they successfully maintained and reduced costs. The ultimate measure of success has to be a better share price, even if trades are small, good news jumps.

[The Stationmaster]

7 hours ago, adb968008 said:

Thats very encouraging.

 

if the big guys, Rails etc agree then it would appear Hornby has successfully grown the pie, rather than moving the slices about.

 

The annual report in June could be encouraging if sales are up and they successfully maintained and reduced costs. The ultimate measure of success has to be a better share price, even if trades are small, good news jumps.

Interestingly the statement produced (or should that be preceded?) a drop in Hornby's share price but it has since rallied although it is a bit up and down.  However it is considerably better than it was a years ago.

[rovex]

1 hour ago, The Stationmaster said:

Interestingly the statement produced (or should that be preceded?) a drop in Hornby's share price but it has since rallied although it is a bit up and down.  However it is considerably better than it was a years ago.

 

Can we still afford it if we all rally round?

 

Rovex

[The Stationmaster]

18 hours ago, rovex said:

 

Can we still afford it if we all rally round?

 

Rovex

Rather a large amount of shares in circulation to do that I would think but 12,000 shares changed hands about an hour ago and the price bumped up a little.

[Mike at C&M]

On 11/04/2019 at 07:36, Widnes Model Centre said:

 

 

To add to 87029’s post. We have also seen an increase in Hornby  products resulting in larger payments to them. Equally we have seen a very large increase in sales in both Hornby and Airfix products. Still a great deal of room for improvement in Humbrol which continues to frustrate. 

 

Top Sellers have been track and the 66 locos which have sold incredibly well. No matter what the opinions of the 66 are, they have sold out in most derivatives and sold out at Hornby. That has got to be good for the company.

 

Hornby continue to work with retailers, in no small way a lot of that can be put the way of the Company area representatives and Simon Kohler.

Perfectly put, Barry

 

The Terriers have also sold incredibly well with us, despite their territory being at the opposite end of the country.

 

We have found that both the Great Model Railway Challenge and the James May programme have had a positive effect on Hornby sales. The brand has been put back in front of people's eyes, and they are responding.

[No Decorum]

My word, it’s quiet in here! Yesterday at an exhibition I had a striking example of the value of the brand. A man had a boy (estimated age 3) on his shoulder. I grinned at him, thinking of my 5-year-old grandson, who was creating chaos elsewhere. The man said that he wasn’t in the hobby himself but someone in the family was and the little lad was mad keen. His parting words were, “I think I’ll be buying a Hornby train set soon.”

[johnofwessex]

Its a pity Hornby dont get Lidl to take some train sets for one of their Special Offers

[stonesboy]

Aldi did have a basic starter trainset from Hornby a few months ago as one of their offers.

[bigherb]

On 14/04/2019 at 19:51, johnofwessex said:

Its a pity Hornby dont get Lidl to take some train sets for one of their Special Offers

They did, over the Chrismas period.