Hornby 2022 - Trains on Film

[mdvle]

On 04/02/2022 at 09:17, scumcat said:

This is why it always bothers me with all the talk of wanting them to fail. Imagine the hobby without them, they bring in a lot of new blood. As I have said before company’s like accurascale, rapido, cavalex, Hattons and others are not interested in making models for beginners or for the enthusiasts who cannot spend hundreds on a new loco. So to me I will be careful what I wish for

 

There is a difference between Hornby (the brand), Hornby (the company and current management), and the tooling.

 

Hornby the company can disappear tomorrow and it would be a temporary blip on this hobby.  Someone else, perhaps with better management, would buy the tooling and the brand and things would continue on.

 

Arguably that might actually be the best thing for the hobby - it wipes out the debt that the current company has, meaning whatever replaces Hornby would be much healthier - and potentially means a company run by a management that understands that this isn't a winner takes it all market and that customer service - as in a healthy retail network - matters.

 

[Classsix T]

18 minutes ago, mdvle said:

 

There is a difference between Hornby (the brand), Hornby (the company and current management), and the tooling.

 

Hornby the company can disappear tomorrow and it would be a temporary blip on this hobby.  Someone else, perhaps with better management, would buy the tooling and the brand and things would continue on.

 

Arguably that might actually be the best thing for the hobby - it wipes out the debt that the current company has, meaning whatever replaces Hornby would be much healthier - and potentially means a company run by a management that understands that this isn't a winner takes it all market and that customer service - as in a healthy retail network - matters.

 

I'm sure yourself or Mike will be ready to correct me (indeed I'd be appreciative of confirmation or otherwise), but if Hornby did fold, wouldn't the debtors then descend to recoup their monies by selling off tooling etc as assets?

 

If that is the case, Hornby is more likely to pay off it's debts, or at least maintain an income stream, as a whole is is not?

 

C6T. 

[Dunsignalling]

39 minutes ago, Classsix T said:

I'm sure yourself or Mike will be ready to correct me (indeed I'd be appreciative of confirmation or otherwise), but if Hornby did fold, wouldn't the debtors then descend to recoup their monies by selling off tooling etc as assets?

 

If that is the case, Hornby is more likely to pay off it's debts, or at least maintain an income stream, as a whole is is not?

 

C6T. 

I don't think there's any immediate danger of that happening, but if it did, the most likely outcome would be to sell off the various arms of Hornby Hobbies as intact separate entities. Railways, Airfix, Scalextric, etc.

 

Hornby Railways as a unit would attract buyers not already in the field; splitting things down to tooling level, only other established players, as happened with Mainline and Airfix. That's only likely were it not to attract a buyer in a form that could continue to trade. It would be interesting, though, to see who, if anyone, was interested in the Railroad range, should such a scenario come to pass... 

 

John

Edited February 5, 2022 by Dunsignalling

[SamThomas]

My money for a new CEO will be a grey suit from a background well removed from scale models.

 

How long to the next financial "restructuring" ?

[adb968008]

On 05/02/2022 at 15:40, Classsix T said:

I'm sure yourself or Mike will be ready to correct me (indeed I'd be appreciative of confirmation or otherwise), but if Hornby did fold, wouldn't the debtors then descend to recoup their monies by selling off tooling etc as assets?

to understand more of what can happen when it all goes wrong, Google PNC and K’nex.

I don't think they are anywhere close to this, things are going the right way, but imo, it should have been faster by at least a year given the great poker hand they were gifted by covid in 2020, and I think 2021 should have been in the black too, instead it crawled over the line in 2020, fell back in 2021 and what I see from the approach of 2022 doesn't endear me to the companys behaviour.

 

 

Edited February 7, 2022 by adb968008

[CUCKOO LINE]

44 minutes ago, SamThomas said:

My money for a new CEO will be a grey suit from a background well removed from scale models.

 

How long to the next financial "restructuring" ?

Maybe they need a legal whizz as a CEO ?

[mdvle]

3 hours ago, Classsix T said:

I'm sure yourself or Mike will be ready to correct me (indeed I'd be appreciative of confirmation or otherwise), but if Hornby did fold, wouldn't the debtors then descend to recoup their monies by selling off tooling etc as assets?

 

First, I agree with others, there is no current indication that Hornby is anywhere close to folding - for now at least Phoenix seems happy with the situation.

 

Speaking in generic terms, when a company the size of a Hornby goes under there will be official legal procedures in place to handle the disposal of assets and the attempted repayment of debtors.

 

Generally (there will be exceptions) the nature of bankruptcy is the sale of the assets doesn't fully recoup the money owed - that the people/company owed money only get back a percentage of what they are owed.

 

There is unlikely to be a lot of interest, so unlikely to be a bidding war - thus whoever ends up with the brand and/or tooling should be able to end up with those assets at a reasonable (for the new company) price.

 

3 hours ago, Classsix T said:

If that is the case, Hornby is more likely to pay off it's debts, or at least maintain an income stream, as a whole is is not?

 

Generally speaking it will be better for a company to continue, because then there is at least the potential for the debt to be paid off - or at least further income in paying the interest on the debt for the lender before needing to write it off.

 

This is why the first stop is usually an attempted financial reorganization instead of liquidation.

 

 

 

 

 

 

[BMS]

catalogues still available; Tescos had several in "Newspapers", so my better half got me one.

[andyman7]

42 minutes ago, mdvle said:

 

First, I agree with others, there is no current indication that Hornby is anywhere close to folding - for now at least Phoenix seems happy with the situation.

 

Speaking in generic terms, when a company the size of a Hornby goes under there will be official legal procedures in place to handle the disposal of assets and the attempted repayment of debtors.

 

Generally (there will be exceptions) the nature of bankruptcy is the sale of the assets doesn't fully recoup the money owed - that the people/company owed money only get back a percentage of what they are owed.

 

There is unlikely to be a lot of interest, so unlikely to be a bidding war - thus whoever ends up with the brand and/or tooling should be able to end up with those assets at a reasonable (for the new company) price.

 

 

Generally speaking it will be better for a company to continue, because then there is at least the potential for the debt to be paid off - or at least further income in paying the interest on the debt for the lender before needing to write it off.

 

This is why the first stop is usually an attempted financial reorganization instead of liquidation.

And we have been here many times before...

- in 1964 the 'original' Meccano Ltd, founded by Frank Hornby and originator of the Hornby trade mark, was sold lock, stock and barrel to the Lines Brothers Group, who through their Rovex subsidiary made Triang Railways. This marked the end of Hornby Dublo production, although many HD models end up being made by G & R Wrenn Ltd who at that time were part of the Lines Brothers group.

- in 1971 Lines Brother went into administration and was broken up. G & R Wrenn became an independent company again, but with the Hornby Dublo tooling assets but NOT the Hornby name; Dunbee-Combex-Marx acquired Rovex and with it the Triang model railway tooling but NOT the Triang name - they got the 'Hornby' trade mark instead. The Triang trademark went with Pedigree, which had been another Lines Brothers subsidiary.

- in 1981 Dunbee-Combex-Marx itself went into receivership in 1980 and Rovex was the subject of a management buyout, becoming Hornby Hobbies Ltd in the process (this is the holding group, so the name now covered all group products including Scalextric etc). This corporate entity has now survived over 40 years with many ups and downs, with the share capital and ownership moving around various venture capitalist firms. Having barely survived the 1980s (a desperate decade for makers of 'traditional' hobby items) and been seen as a very likely takeover target in the 1990s, the move of all production to China in 1998 coupled with the growth of 'silver shoppers' (i.e. 'boys' in their 50s and 60s splashing huge amounts of money on superdetail models that could be produced at ridiculously low prices thanks to the China manufacturing boom) led to Hornby's most successful decade for years, during which it acquired a host of other classic hobby brands (Airfix, Humbrol, Corgi, Jouef, Electrotren, Rivarossi, Arnold, Lima).

- the last 12 or so years have been much tougher; their original Chinese manufacturing partner Sanda Kan shut up shop and exposed their vulnerability to a single supplier (which is why they now use several manufacturers); the 2012 Olympics licensing investment didn't pay off; and the costs of manufacturing in China have risen. Covid led to a leap in sales but also a leap in costs, so business is tough. In other developments, the Triang trademark, having long been defunct since last being used in the 1990s was able to be 're-adopted' by Hornby Hobbies.

So any 'success' or 'failure' of the Hornby brand just adds to a story that is now over 100 years old and counting. Besides which there are still folk out there who haven't considered anything to be proper Hornby since it stopped being made of tinplate in Liverpool and run on coarse-scale O gauge track....

[GWR-fan]

Remember that the current brandname "Hornby" exists only due the failure of its predecessors.  Too many view the company with rose coloured glasses,  fearing that the collapse of the company will result in the failure of the model railway hobby in general.

[Bucoops]

49 minutes ago, andyman7 said:

Besides which there are still folk out there who haven't considered anything to be proper Hornby since it stopped being made of tinplate in Liverpool and run on coarse-scale O gauge track....

 

*Waves*

[Andy Hayter]

Did I miss something?  Why are we discussing the demise of a company that, as far as I can see, remains a going concern?

 

It's a bit like discussing the demise of the crown when Price William dies.

[andyman7]

7 minutes ago, Andy Hayter said:

Did I miss something?  Why are we discussing the demise of a company that, as far as I can see, remains a going concern?

 

It's a bit like discussing the demise of the crown when Price William dies.

True, but the wider point is that Hornby as a brand has continued even when that hasn't been the case. It's an antidote to the sentiment from some that the current issues (including the now apparently abandoned Trains on Film range) represent some uniquely cataclysmic occurrence in the history of Hornby

[Classsix T]

10 minutes ago, Andy Hayter said:

Did I miss something?  Why are we discussing the demise of a company that, as far as I can see, remains a going concern?

 

It's a bit like discussing the demise of the crown when Price William dies.

Obviously you have. Rhetoric of the potential demise of a company is streets away from actual cessation of a business. 

6 hours ago, Dunsignalling said:

I don't think there's any immediate danger of that happening, but if it did, the most likely outcome would be to sell off the various arms of Hornby Hobbies as intact separate entities. Railways, Airfix, Scalextric, etc.

 

Hornby Railways as a unit would attract buyers not already in the field; splitting things down to tooling level, only other established players, as happened with Mainline and Airfix. That's only likely were it not to attract a buyer in a form that could continue to trade. It would be interesting, though, to see who, if anyone, was interested in the Railroad range, should such a scenario come to pass... 

 

John

Indeed John, I'm just being hypothetical about any possible Hornby wind-up. I personally don't see it happening. 

But Titgate has indicated Margate still has much to learn about it's occupancy within the market. 

 

C6T. 

[The Stationmaster]

9 hours ago, Classsix T said:

I'm sure yourself or Mike will be ready to correct me (indeed I'd be appreciative of confirmation or otherwise), but if Hornby did fold, wouldn't the debtors then descend to recoup their monies by selling off tooling etc as assets?

 

If that is the case, Hornby is more likely to pay off it's debts, or at least maintain an income stream, as a whole is is not?

 

C6T. 

Technically at the Hornby have two loan facilities which they pay for irrespective of whether or not they use them although the interest rate is higher for any money they have drawn down from these facilities - and they have taken some.  The loan facility from the US company comes from a concern which has form when if comes to clients who are unable to repay on time and in full and the loan agreement is basically written to their terms (obviously).  So they could - if it came down to it - recoup their loan in the shape of assets from the company, i.e. parts of Hornby if it cannot be repaid as money.  But the loan is way below Hornby's market capitalisation which theoretically represents the capital value of the company. (albeit a rather old fashioned way of looking at it).  

 

More importantly, possibly, is that the recent period extension of the Phoenix loan facility effectively could (if not otherwise used) cover 75% of of the US loan facility  repayment as it now extends past the date of the US facility repayment.  Phoenix making available capital to Hornby can be seen as business sense in terms of supporting moving a major asset towards profitability through investment but it also might provide a potential backstop for Phoenix to protect its asset as by far the largest shareholder in Hornby.

 

If Phoenix follow their usual approach they are in Hornby for the long term and perceive it as a company which will improve in value thus providing a return on their investment in Hornby shares and providing a loan facility.  Phoenix seem to be pretty good at  holding their nerve when playing the long game but ultimately it would depend at what point they decide to take their profit so I think Hornby is safe thus far - as has already been pointed out above it remains trading as a going concern.  Things can always change for any business but TItgate isn't going to break Hornby whichever way things go because in investment terms so far it's small beer compared with plenty of other new 2022 models which will cost big money for tooling.

[Dan Griffin]

erm. 

 

unless I'm mistaken, the trains on film range seems to have been removed from Hornby's website!

 

 

I wish I'd put money on it now,  i said this would happen a few pages back. 

 

what a stunt to pull.  I'm sorry but whoever's idea it was to launch that range should be shown the door. 

 

do Hornby really need that bad publicity? 

Edited February 6, 2022 by Dan Griffin

[Bucoops]

12 minutes ago, Dan Griffin said:

erm. 

 

unless I'm mistaken, the trains on film range seems to have been removed from Hornby's website!

 

 

I wish I'd put money on it now,  i said this would happen a few pages back. 

 

what a stunt to pull.  I'm sorry but whoever's idea it was to launch that range should be shown the door. 

 

do Hornby really need that bad publicity? 

 

It's been like that for a few days - made me chuckle

[Butler Henderson]

It would be more funny if StudioCanal made them provide a link https://rapidotrains.co.uk/the-titfield-thunderbolt-70th-anniversary-range/

Edited February 6, 2022 by Butler Henderson

[Markwj]

2 hours ago, Dan Griffin said:

erm. 

 

unless I'm mistaken, the trains on film range seems to have been removed from Hornby's website!

 

 

I wish I'd put money on it now,  i said this would happen a few pages back. 

 

what a stunt to pull.  I'm sorry but whoever's idea it was to launch that range should be shown the door. 

 

do Hornby really need that bad publicity? 

You know this has been discussed for at least the last 3 days?

[Fireline]

Quite aside of discussing the asset stripping of a company that is far from a Norwegian Blue yet, most people seem to be missing the rather indicative fact that the head of Phoenix is a massive Hornby fan. If you want any indication of why Hornby isn't likely to go down the tubes just yet, there it is....

[Hilux5972]

1 hour ago, Fireline said:

Quite aside of discussing the asset stripping of a company that is far from a Norwegian Blue yet, most people seem to be missing the rather indicative fact that the head of Phoenix is a massive Hornby fan. If you want any indication of why Hornby isn't likely to go down the tubes just yet, there it is....

Phoenix what?

[Compound2632]

48 minutes ago, Hilux5972 said:

Phoenix what?

 

https://en.wikipedia.org/wiki/Hornby_Railways#Financial_troubles,_PAM_takeover

[JohnR]

1 hour ago, Hilux5972 said:

Phoenix what?

 

Phoenix Asset Management, the owners of a substantial majority of Hornby shares (75%?)

 

https://www.phoenixassetmanagement.com/

[Pmorgancym]

1 hour ago, JohnR said:

 

Phoenix Asset Management, the owners of a substantial majority of Hornby shares (75%?)

 

https://www.phoenixassetmanagement.com/

Isn't Hoskins lurking behind all this

[Fireline]

59 minutes ago, Pmorgancym said:

Isn't Hoskins lurking behind all this

Nope. He used to be a major shareholder, but sold up most of his shares in one go, crashing the share price in the process. Phoenix bought most of the shares he sold.