Hornby Financial Report 2022

[The Stationmaster]

Hornby's Financial Report published today makes really interesting reading particularly as despite supply chain problems and increased costs they are recording an increased profit.  Year-on-year revenue has grown by just over 5% to £53.7 million and their operating profit has grown from £0.6 million to £1 million.  net cash - as might be expected - has declined slightly but all the various of showing profit are showing an increase.

 

Interestingly inventory has grown but only by a relatively small amount which apart from supply chain problems suggests to me - along with their sales figures - that they have been selling old inventory (which fits with retailers' adverts).  Onl;ine sales have grown alythough I haven't yet found a brand split and further growth is intended.

 

A fascinating comment is that 'Hornby will also announce certain products outside of the January window next year.'  (that's a quote so I take no responsibility for their poor English usage).  This is in addition to Corgi already staggering releases and Airfix will follow in 2023.  Looks like Hornby are actually starting to get that area of their marketing up to date at long last.

 

The Report also mentions moving some production out of China or duplicating 'evergreen tooling' outside China and developing partnerships with new manufacturers

[woodenhead]

So that's a 1.8% profit before tax and interest, it's slim margins isn't it.

[The Stationmaster]

47 minutes ago, woodenhead said:

So that's a 1.8% profit before tax and interest, it's slim margins isn't it.

Yes - part of the explanation of that is all the money they are spending on digital - for websites and, it is implied, for online selling.  So a strong hint of jam tomorrow.  Plus of course all the added costs of importing from China and money spent on tooling new models which haven't been delivered because of problems in China.  

 

But it is still a profit and to be honest I must admit to being a little surprised that the managed to turn any sort of profit at all.  But equally non-deliveries from China have given some big savings on shipping costs although it is still investment which has not yet produced a return, hence the poor capex figure.  Seems the stock market is not yet very much impressed as the share price high in trading so far to day only managed to get up from 30p to 32p and the averaged rise so far is 1.6p - so just over 5% on the opening price.

[JohnR]

Is there a link to it?

[CUCKOO LINE]

30 minutes ago, The Stationmaster said:

Yes - part of the explanation of that is all the money they are spending on digital - for websites and, it is implied, for online selling.  So a strong hint of jam tomorrow.  Plus of course all the added costs of importing from China and money spent on tooling new models which haven't been delivered because of problems in China.  

 

But it is still a profit and to be honest I must admit to being a little surprised that the managed to turn any sort of profit at all.  But equally non-deliveries from China have given some big savings on shipping costs although it is still investment which has not yet produced a return, hence the poor capex figure.  Seems the stock market is not yet very much impressed as the share price high in trading so far to day only managed to get up from 30p to 32p and the averaged rise so far is 1.6p - so just over 5% on the opening price.

Probably means as expected, if they go down it is worse than expected, only normally go up a lot if much better than expected.

[spamcan61]

29 minutes ago, JohnR said:

Is there a link to it?

it's helpfully not on the 'Annual Reports' page, it's here:-

 

https://www.Hornby.plc.uk/rns/

 

https://polaris.brighterir.com/public/Hornby/news/rns/story/w13dg3r

 

Edited June 16, 2022 by spamcan61

[The Stationmaster]

18 minutes ago, spamcan61 said:

it's helpfully not on the 'Annual Reports' page, it's here:-

 

https://www.Hornby.plc.uk/rns/

 

https://polaris.brighterir.com/public/Hornby/news/rns/story/w13dg3r

 

That's because it's not the Annual Report - that is a little while away yet.  This is basically the numbers part of it plus various other stuff.

[JSpencer]

4 hours ago, The Stationmaster said:

 Onl;ine sales have grown alythough I haven't yet found a brand split and further growth is intended.

 

 

But is that to the detriment of shop sales going down ? 

[The Stationmaster]

22 minutes ago, JSpencer said:

 

But is that to the detriment of shop sales going down ? 

That isn't possible to establish from what I can so far find in the Report.  Hornby have occasionally  in the past shown a split by brand and type of sale but I haven't yet found that in this Report - if it's there.  I expect that it will appear somewhere in the Annual Report when that arrives unless Hornby, for whatever reason, decide not to make it public.

 

In this Financial Report the only information I can find is shown under KPI 4 in this way - which shows direct sales by value.  As you can see Q3 and Q4 numbers have steadily risen.  But the last published information which split sales by brand, and then not for the whole year, showed considerable disparity between the various brands and Hornby (railways) had in fact fallen back while some other brands had continued steady growth. (n.b. Q3 covers the Christmas period)

 

[Legend]

There are some interesting snippets in there .

 

Firstly well done on a second year of profitability on what must have been a challenging year with Covid/Raw Material Increases / Container shortages etc .  I would say its only £1.0M on a turnover of £53.7m , so not spectacular , but nevertheless a good performance considering all these factors . I had expected that they may slide back into loss .

 

Good that sales continue to grow . Shows that they are maintaining growth and that it wasn't just the Covid Hobby bounce .

 

Sales/ Turnover up £5.2M  but Gross Profit  up £3.9M with an increase in GP% , shows they are getting more per product .  Unfortunately their overheads increased again by £3.6M  so really only added £0.3M to bottom line . 

 

I think Mikes already pointed out the section dealing with releases , but it is interesting that Hornby will make some introductions during the year

 

"Sales in Quarter 3 over the Christmas period will always be heavily loaded, but as part of the digital change we will move to announcing more products outside of the January window, which has always been the traditional time in our industry. The change will vary by brand; for example Corgi has already started staggering releases and Airfix will follow in 2023. Hornby will also announce certain products outside of the January window next year."

 

Interesting point on Container Charges 

 

"   Container shipping costs - previously £3,000 for a 40-foot container, but we experienced prices as high as £17,000."

Big increase , but then I wonder how many items you can get in a container , so cost per item is probably not that significant in the scheme of things .

 

Interesting on diversification of suppliers / supply chain . I think this is a really positive more and a far cry from the Frank Martin days when they had all their Hornby eggs in the Sanda Kan basket

"Over the last 12 months we have been planning more production outside of our main China base. This involves laying down duplicate tooling on some evergreen products in other countries. This should not be seen as a movement out of China, but rather an opportunity to work with new manufacturers on our extensive range of existing products; not just to supply ourselves, but also to build new demand in their local markets."

 

Then we see third party sales in UK only increase 1% in year - so the model shop market hasn't really grown but note the comment on direct sales 

"Third party sales by the UK business of £37.7 million increased by 1% in the year as a result of improvements in the choice of products on offer and a significant increase in direct sales via the website."

And under risks and uncertainties 

"In the short-term there is an opportunity to regain market share lost through previous underperformance. We have also implemented tiering and only allowing certain percentage of our goods to go wholesale with balance only being available on our website"

So there you have it , confirmation of what I think we all knew that Goods were being held back for Hornby to sell direct at expense of model shops .  Now I actually think this makes sense for them as a buisiness and is a good way of increasing their gross profit (because they keep their own and wholesalers portion of profit) its just the duplicity of pretending to support model shops while increasing their direct sales at model shops expense that leaves a bit of a bad taste . 

 

 

[spamcan61]

22 minutes ago, Legend said:

 

 

"   Container shipping costs - previously £3,000 for a 40-foot container, but we experienced prices as high as £17,000."

Big increase , but then I wonder how many items you can get in a container , so cost per item is probably not that significant in the scheme of things .

 

I did estimate that back in some thread I can't recall, but it was around 30-50p per loco (or loco/coach sized item). - I think that was based on 2K increasing to 16K so same increase.

Edited June 16, 2022 by spamcan61

[Paddy]

4 hours ago, The Stationmaster said:

Yes - part of the explanation of that is all the money they are spending on digital - for websites and, it is implied, for online selling.  So a strong hint of jam tomorrow.  Plus of course all the added costs of importing from China and money spent on tooling new models which haven't been delivered because of problems in China.  

 

But it is still a profit and to be honest I must admit to being a little surprised that the managed to turn any sort of profit at all.  But equally non-deliveries from China have given some big savings on shipping costs although it is still investment which has not yet produced a return, hence the poor capex figure.  Seems the stock market is not yet very much impressed as the share price high in trading so far to day only managed to get up from 30p to 32p and the averaged rise so far is 1.6p - so just over 5% on the opening price.

With regards to share price movements, it should be noted that over 90% of the shares are owned by two private equity organisations. The amount of free shares to be traded is therefore quite small.

Edit: Plus share valuations are all over the place at present.

 

Kind regards 

 

Paddy

Edited June 16, 2022 by Paddy

[The Stationmaster]

There are several other interesting things which emerge as we look at detail.  For instance £219,000, i.e. over 50% of the operating profit increase came from LCD which is brought to account for the first time in this sales year. So directly comparable operating profit growth is less than £200,000 on a massive increase in sales.    

 

And  while sales grew by 11% at the same time overheads grew by 17% - so back to Legend's point regarding costs  (but the gross profit margin increased from 44.9% to 47.9%).  Looking at the breakdown of revenue by region UK 'external revenue' in 2022 is reported  as £37.748 million plus £2.791million 'other segment' revenue whereas in 2021 it was £37.428 million plus 'other segments' amounting to £2.603 million.     Quite what the 'other segments' are is not made clear but the revenue is always added under UK sales.  But what might perhaps be a bit more significant is that the UK external revenue only grew by £320,000, just over 8.5%, in the year and I wonder if this reflects the impact of delayed deliveries from China?

 

[adb968008]

nice surprise to see a profit, however the YE was March 2022… the fall out of Tiers, Titfield, New pricing, Website, bdms etc havent yet had time to impact the books.

 

1. The headline number will have captured the additional 10% price rises of both June 2021 and January 2022… which conveniently were timed just before release of the APT, HST and Azuma sets… all >£500 rrp spend items… If adding 20% to the price of higher priced goods, moving channel to direct sales doesnt lift the margin, nothing will.
 

2. >£1mn less spent on capex (tooling) between this year and last produces a saving.. yet cash in the bank is down…

Maybe 78xxx are paying for the new Black5… in which case that 5MT maybe a very long time away… but the lights, heating and power is still being consumed at commercial rates whilst staff get paid waiting there arrival.

 

3. Increase in Marketing costs of £1m due to “ongoing investment in direct relationships with our customers”…. Really, £1m on woo’ing me to buy via their website at expense of my retailer…?  Havent seen a Hornby advert on rmweb, or a station billboard or anywhere else…indeed I see less advertising… the popup shops have gone too… maybe i’m the wrong type of customer ?.. perhaps titfield was a marketing stunt ?.. perhaps film licences are part of marketing ? I dunno, i’m lost on that one… but the size of the marketing budget has always been a mystery to me..

4. is the website what its cracked up to be…?

 

sales £54m, kpi 4… shows c£5.7mn via the website… so c90% sales are not via the website… its very easy to think, that simply increasing website sales, reduce trade gives better margins… but thats assuming your customers agree to buying mundane lower priced  “evergreen” like track, buildings etc from online rather than retailers, and that retailers are also happy to stock such items despite the change or purchase place for that alluring rolling stock.

 

my fear here is “evergreen” as a cash cow, could suffer if retailers cut back, but consumers don’t want to pay high postage for low value/need goods where competing options exist… if there was a competitive threat to Hornby imo this is it.. and core ranges (not rtr rolling stock) could be easily attacked by competitors.

 

5.  Trade margin vs retail..

obviously this isnt known to us “oinks”, but many industries work thereabouts 35%.

 

So profit or loss.. Well maybe its hiding in plain sight ? (2020’s website figures are c£4.9m )… if the £800k revenue increase between 2021 and 2022 was also attracting an extra 35% margin (£300k), add this to the European sales profit of £800k,  then it would seem this slight increase was a critical piece contributing to the difference between a profit or a loss for Hornby in 2022….

 

6. Manufacturing outside China…

Specifically growing markets in those countries… Whilst evergreen products to me suggests Scalextrix, Paints, Track, Accessories… rather than bespoke OO gauge UK locos and Coaches, it does sound interesting to me as production generally needs to be in a location where wage costs are lower than the market to sell those goods in, which is reliant on greater disposable spend to buy them and make a profit…. So it’ll be interesting to see which country can afford to make them and have a market ready buy them in sustainable volumes as to be worthwhile, and remain “evergreen” and more importantly, relevant to the buyers in that country without offering regional pricing between different countries… OO gauge Christmas trees probably arent that popular in India…and not with a Railroad 66.

 

7. STB £12m, replaces PNC’s £9mn lending facility

 

8. Risks..

imo they have ignored risks from,  Inflation, Ukraine, Interest Rates, Consumer Spending contraction, Rising energy costs, Higher taxation of customers, changing consumer interests associated with reopening after covid, additionally no risks are associated with changing their gtm model from B2B to B2C.

 

That section to me suggests they see no risk of consumers cutting back spending… whilst humble me, has cut back a lot of spending this year, more vacation, outdoor  focussed and Hornby especially as I feel Quality has dropped, that the website transition / high prices has removed urgency need to purchase and longer term looking at winter may look like.. all in all means i’m less prioritised on Hornby than I used to be… I guess i’m a lone consumer in that approach.

9. Web and digitalisation strategy…

I consistently see these words in the annual reports, yet aside of a new erp and a new website (and the controller app) I dont know what else there is ? if this is about “feel good” in the reports to play to a tune, or if theres a serious behind the scenes innovation awaiting to be sprung on the market, is it just added smoke on a DCC chip ? or have I as a humble consumer missed something ?

 

Overall, Imo, I feel a sense of strain between this years and last years numbers, cash down, stock up,  price rises, costs up, better margin for comparatively little profit…

 

My feeling is theres been a lot of hard work to make the profit what it is, and the profit occurred through the culmulation of the sum of the tinest of actions coming together.. thats very commendable, but is it sustainable ?.. 

 

On the website particularly, is the juice worth the squeeze or will pips get stuck in the filter ?

Have the actions since January, which are yet to be seen, going to help or hinder ?

 

 

 

 

 

 

 

 

 

 

 

 

Edited June 17, 2022 by adb968008

[Paddy]

It is clear to see that the folks at Hornby have worked exceptionally hard to deliver a profit (again). No doubt, like many companies there is an element of smoke and mirrors but well done to the team. Three things that concern me (and I am a Hornby shareholder) are:

 

1. The expected change in CEO. History has shown us that changes in leadership at Hornby can lead to disaster. Lyndon has done a good job of steadying the ship and focussing the company on growth. Lyndon also seems to have a good understanding of the hobby business which I believe is vital. Hopefully, they will not replace Lyndon with someone who thinks selling “toys” is simply a case of flashy images on a website.

 

2. Quality control. It is all very well producing expensive new models (assuming they can get them delivered) but they need to be of high quality. There are people who will pay hundreds of Pounds for a model but the expectation level will be very high. Hornby need to get their arms around these issues quickly as in the days of social media “bad news” travels fast.

 

3. Finally, the comment about replacing one website with twenty seven at the beginning of 2021. No doubt this has been done to give each set of customers a personalised experience but it also sounds expensive and a maintenance nightmare. One can only hope these websites share the vast majority of their functionality and the differences are only skin deep. I had to read this line in the report several times as I kept thinking it must be the other way around i.e. 27 replaced by one! 😉

 

Kind regards 

 

Paddy

Edited June 17, 2022 by Paddy

[adb968008]

1 hour ago, Paddy said:

It is clear to see that the folks at Hornby have worked exceptionally hard to deliver a profit (again). No doubt, like many companies there is an element of smoke and mirrors but well done to the team. Three things that concern me (and I am a Hornby shareholder) are:

 

1. The expected change in CEO. History has shown us that changes in leadership at Hornby can lead to disaster. Lyndon has done a good job of steadying the ship and focussing the company on growth. Lyndon also seems to have a good understanding of the hobby business which I believe is vital. Hopefully, they will not replace Lyndon with someone who thinks selling “toys” is simply a case of flashy images on a website.

 

2. Quality control. It is all very well producing expensive new models (assuming they can get them delivered) but they need to be of high quality. There are people who will pay hundreds of Pounds for a model but the expectation level will be very high. Hornby need to get their arms around these issues quickly as in the days of social media “bad news” travels fast.

 

3. Finally, the comment about replacing one website with twenty seven at the beginning of 2021. No doubt this has been done to give each set of customers a personalised experience but it also sounds expensive and a maintenance nightmare. One can only hope these websites share the vast majority of their functionality and the differences are only skin deep.

 

Kind regards 

 

Paddy

Totally agreed, in my opinion they need a CEO, who has knowledge from within the hobby. Its very niche. Imo A supermarket CEO would be bad, as would a finance derived one. If online retail is the strategy a CEO from a tech and with a hobbist (not neccessarily railways) background would seem more logical.

 

Quality is a big one, to me its dived this year to the point where i’m just not buying a nice detailed model with a transfer pixelated paint job… i’ve canceled more than i’ve bought this year. Theres no point making detailed models with railroad paint jobs, even if the inverse brings quick wins.

 

The website imo is hard to navigate, the search is poor, you need to understand Hornby, more than your hobby, to find what you want. In defence of Hornby, I think a couple of larger retailers are getting caught in this trap too. Filtering should be easy, configurable even saveable to get to the users search experience… How many times have I entered 78xxx to get nothing..

 

 

and try 2MT to get 1394 results…

 

the most “relevant” being a brake van.

 

 

Entering BR Std serves up a Black class 08, and entering 2-6-0 gets me a road crane.
 

as a consumer I find it easier to google it… and then go back to the website.. or someone elses if the price is cheaper…

 

 

 

imo its not in tune with the consumer.

Applying tags to product lines is imo a basic retail commerce option today, is this being done ? Further i’d expect the website to learn from what i’m searching / buying and make linked reccomendations… even down to initial placement when I hit the site.

 

if they are serious about the website, then I think they need to make a market place and affiliations. Theres much they could do here, that could streamline and save on behind scenes processes too and enhance the UX beyond just a transaction that pays for a model and become one that wants me to be drawn in, right now i’m being pushed away.

 

Imo Passion comes from the top, Leadership should drive that passion with a lot of energy, be hands on as well business focused. A message should not be passion of revenue or expenses (thats the business) but in expectation setting and knowledge share.. that grows the desire for passion which leads to actions, that deliver the revenue and expense objectives, and motivates !  It must be frustrating for those with passion to read adverse comments online due to events out of their control elsewhere in the business…

 

for example, simply wrapping and posting a W1 to their own office might have id’d the issues that saw many damaged ones online… since then I see loads of bubble wrap, but imo the issue is the shape of the box.. Ive sent much more fragile models with far less wrapping without damage due to the shape of the packaging.

 

Show me the passion, that puts Watford Junction and Carlilse as destinations in the LNER Azuma and how such comment online motivates ? and finally how that impacts revenue or expenses ?

Edited June 17, 2022 by adb968008

[The Stationmaster]

I think their 'digital' expenditure is going into less obvious areas - particularly putting together a competent digital team for their podcasts.  And taking more digital stuff in-house as well possibly?  They certainly need to do alot more on the Hrnby railway website which at times is little better than uselss and ofyen gives abysmally incorrect prototype information although maybe the latter doesn't worry part of their customer base?

 

From what I've heard in the past their trade discount is nowadays considerably less than 35% and has been for some time.  in addition subsequent changes to payment terms have effectively   impacted what retailers could additionally save through what amounted to a bit of extra discount created by early payment of their invoices.  I bet the margin is no more than 20% and probably less than that.

 

I'm not sure what 'evergreen' means but if it's the sort of stuff the reps used to try to shift it includes things like station platforms - in other words simple moulded items so perhaps something more easily transferred to new suppliers..    BTW Scalextric already does quite well on direct sales but I noted that one of the problems mentioned was the failure of sets (plus railway sets) to arrive in time for the Christmas market - shifting taht sort of production elsewhere won't be as simple.

 

I wholeheartedly agree about passion coming. with leadership, from the top and that is still an area where I think Hornby falls short in detail within its management.   For example while there is the great tv show emphasis from SK on 'detail, detail, detail' the reality is rather different once stuff gets beyond the design teams.  I only know about the railway area but catalogue descriptive boobs, poor/lack of production qc (presumably even including lack of checking and testing when product is delivered to the UK warehouse?), and products found to be damaged on arrival at  retailers or when received at home by direct purchasers indicate to me that 'detail, detail, detail'  is not something which applies to wider critical parts of Hornby's marketing and operational management areas.  I cannot help but be left with a very strong impression that company does not have an effective whole process quality system (e.g. ISO 9002) in operation because if it did these things would not happen. 

[adb968008]

1 hour ago, The Stationmaster said:

I

I'm not sure what 'evergreen' means but if it's the sort of stuff the reps used to try to shift it includes things like station platforms - in other words simple moulded items so perhaps something more easily transferred to new suppliers..    BTW Scalextric already does quite well on direct sales but I noted that one of the problems mentioned was the failure of sets (plus railway sets) to arrive in time for the Christmas market - shifting taht sort of production elsewhere won't be as simple.

 

I took evergreen to be regular “consumables” as it were, that sells all year round.

So Track, Signals, Buildings, Paint, scenics, Scalextric too probably is less seasonal.

 

Trainsets i’d definitely class as seasonal so not evergreen imo.

 

I’m just trying to map what “all year round” sales would fit a new market in the same country of production, yet meet costs and revenues to match… paint is paint, but a british signal box for example is a bit niche out of the UK, though admittedly I have seen similar UK style railway architecture in Argentina..

Edited June 17, 2022 by adb968008

[eldomtom2]

Well, they make Airfix kits in India - I'd imagine Spitfires etc. will get decent sales in most places.

[The Stationmaster]

1 hour ago, eldomtom2 said:

Well, they make Airfix kits in India - I'd imagine Spitfires etc. will get decent sales in most places.

Yes but this is a new move involving model railway items rather than existing manufacture outside China.  And the Report seems to indicate that they are looking at more than one country outside China for the production of some items currently made in China.

[eldomtom2]

26 minutes ago, The Stationmaster said:

Yes but this is a new move involving model railway items rather than existing manufacture outside China.

There's no specific mention of model railway items.

[SamThomas]

Not really impressed with the new website, although I'm only looking at the European HO side.

 

Someone needs to check the images on the Lima section though - a number of buffer heads missing !

 

Maybe I missed it but an "achieve" section would be nice & useful.

 

I do feel that Hornby are losing out on European sales, I get the impression that these models are overlooked which is a great pity - the current offerings from their European HO stable are certainly up there with the other European manufactures.

[Johan DC]

1 hour ago, SamThomas said:

 

I do feel that Hornby are losing out on European sales, I get the impression that these models are overlooked which is a great pity - the current offerings from their European HO stable are certainly up there with the other European manufactures.

For fathersday I bought my dad a Rivarossi Beuer shunter, and I was very impressed. Directional lighting, NEM651 ready and super fine details, in a Loco smaller than a Ruston 0-4-0. And cheaper!

[1andrew1]

On 18/06/2022 at 08:48, SamThomas said:

Not really impressed with the new website, although I'm only looking at the European HO side.

 

Someone needs to check the images on the Lima section though - a number of buffer heads missing !

 

Maybe I missed it but an "achieve" section would be nice & useful.

 

I do feel that Hornby are losing out on European sales, I get the impression that these models are overlooked which is a great pity - the current offerings from their European HO stable are certainly up there with the other European manufactures.

I think the UK is more into online sales than Continental Europe so weaknesses in the website may not be so critical.

 

Hornby Hobbies' performance in Europe seems to have been turned around from a loss to a profit but performance has worsened in the US. This looks in severe need of attention and I guess if they can't grow sales quickly they'll downsize or sell the US business.

 

I suspect most sales in the US are Corgi, Scalextric and Airfix with the railway ranges being unimportant.

 

Quote

Sales by the European businesses of £11.4 million increased by 93% in the year reflecting the Group's focus on growing these markets through correct product selection and overcoming the shipping issues we experienced post Brexit. The profit before tax was £0.8 million compares to £0.5 million loss last year.

 

Sales in the US business of £4.6 million decreased by 13%. The trading loss of £0.7 million compares to £0.3 million loss in last year. We expect sales to increase in this key market in the longer term and overheads to reduce.

 

 

However, Simply Wall Street has commented that Hornby's price/earnings ration (ie share price compared to profits) is high on current profits.

Quote

Hornby PLC's (LON:HRN) price-to-earnings (or "P/E") ratio of 35.6x might make it look like a strong sell right now compared to the market in the United Kingdom, where around half of the companies have P/E ratios below 14x and even P/E's below 7x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.

 

The earnings growth achieved at Hornby over the last year would be more than acceptable for most companies. One possibility is that the P/E is high because investors think this respectable earnings growth will be enough to outperform the broader market in the near future. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

 

https://uk.finance.yahoo.com/news/Hornby-plcs-lon-hrn-price-074404914.html
 

 

Edited June 19, 2022 by 1andrew1

[The Stationmaster]

53 minutes ago, 1andrew1 said:

I think the UK is more into online sales than Continental Europe so weaknesses in the website may not be so critical.

 

Hornby Hobbies' performance in Europe seems to have been turned around from a loss to a profit but performance has worsened in the US. I suspect most sales in the US are Corgi, Scalextric and Airfix with the railway ranges being unimportant.

 

 

 

 

However, Simply Wall Street has commented that Hornby's price/earnings ration (ie share price compared to profits) is high on current profits.

 

 

https://uk.finance.yahoo.com/news/Hornby-plcs-lon-hrn-price-074404914.html
 

 

But don't forget that Hornby's share price also does what nearly amounts to an annual yo-yo trick with a high in January, a fall towards the announcement of the final results, and then sometimes) a rally in the price following the results and again following the publication of the Annual Report then a climb back towards an early January peak.  In the first six months of this year the price of a Hornby £1 share has varied between a high of 52.10p on 04 January and a low of 26.10p on 12 May.  And that makes one heck of a difference in the stock market's valuation of the company.