Hornby Financial Report 2022

[1andrew1]

Appreciate it's share price has form. But even when the share price is at its lowest it has a high P/E ratio. To me, this says the market has a belief that Hornby will generate higher profits in the future.

[adb968008]

8 hours ago, The Stationmaster said:

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.

I wish my lloyds shares would jump like that.

[The Stationmaster]

1 hour ago, 1andrew1 said:

Appreciate it's share price has form. But even when the share price is at its lowest it has a high P/E ratio. To me, this says the market has a belief that Hornby will generate higher profits in the future.

So if it's such a good bet why hasn't the share price risen by any more than 0.5p since the announcement and why didn't the bid price rise past 32.75 at its very best.    It took deals involving just over 40,000 shares on a single day to get that increase in the closing price.  If it's going to be the best thing since sliced bread folk would be clamouring for the shares and the price would start going steadily upwards

[mdvle]

5 hours ago, 1andrew1 said:

Appreciate it's share price has form. But even when the share price is at its lowest it has a high P/E ratio. To me, this says the market has a belief that Hornby will generate higher profits in the future.

 

On the assumption that the poster on the first page is correct and only 10% of the Hornby shares are available to trade at the moment I don't think we can read all that much into the share price - the holding of 90% of the shares by 2 equity firms is distorting the market in this case.

 

 

[adb968008]

9 hours ago, The Stationmaster said:

So if it's such a good bet why hasn't the share price risen by any more than 0.5p since the announcement and why didn't the bid price rise past 32.75 at its very best.    It took deals involving just over 40,000 shares on a single day to get that increase in the closing price.  If it's going to be the best thing since sliced bread folk would be clamouring for the shares and the price would start going steadily upwards

Thats £13k of trading… next to nothing in the big scheme of things… a trade of that amount shouldnt move anything in a company this size.

 

Imo the share price isnt really relevent as the volume is so small its not reflective of the company itself, but more down to those of the individual buyers/sellers and them both being willing / setup at matching pairs to trade at that same time & price range.

 

I do wonder why Hornby still is publically traded, I get Phoenix not wanting to sink in more cash to take it private, but the benefit to the company of its disclosures / requirements to service such a small range of small share holders also seems a burden to me. Seeing a price tag online makes it harder to do a deal behind closed doors when that day comes for the big boys, unless the plan is to divest via the market someday.

 

 

 

 

Edited June 20, 2022 by adb968008

[Mike Bellamy]

On 17/06/2022 at 10:00, adb968008 said:

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..

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

 

There was a discussion about the website last month in the topic about "Hornby Tiers" where Andy provided a link to "Rawnet" - see below

 

Click Here for Link to Rawnet Hornby page

 

When I looked there, I noticed a number of mistakes in the International section - Lema instead of Lima, Arnol instead of Arnold and UF instead of Jouef. I can only assume that it was dictated using voice recognition software and not checked afterwards. I commented in the other thread and it shows that Hornby or Rawnet are monitoring RMweb as corrections were made within a couple of days.

 

There were also comments from Rawnet about the search process . . .. . . . 

Quote

 

Another area we addressed was search. Our new taxonomy solution means that finding a personalised collection of more relevant products is much more straightforward - customers can even shop by enthusiasm and interest. 

We leveraged third party software Elasticsearch to provide fast response times on search and product listings for thousands of products

 

.

[The Stationmaster]

1 hour ago, adb968008 said:

Thats £13k of trading… next to nothing in the big scheme of things… a trade of that amount shouldnt move anything in a company this size.

 

Imo the share price isnt really relevent as the volume is so small its not reflective of the company itself, but more down to those of the individual buyers/sellers and them both being willing / setup at matching pairs to trade at that same time & price range.

 

I do wonder why Hornby still is publically traded, I get Phoenix not wanting to sink in more cash to take it private, but the benefit to the company of its disclosures / requirements to service such a small range of small share holders also seems a burden to me. Seeing a price tag online makes it harder to do a deal behind closed doors when that day comes for the big boys, unless the plan is to divest via the market someday.

 

 

 

 

Don't overlook the way that Phoenix, in particular work.  They are there for the long game and that means that at some stage they could seek to take their profit and obviously while they could readily doa private deal as they don't wholly own the company they could well see a trading/profit advantage in keeping it public.  Their aim seems to be to get the company back into sustainable profitability (to no doubt get some of their investment back via an annual return) before they even think of moving on or selling.  

 

If it serves them no advantage to that strategy there's no real point in them taking steps to totally remove the company from the market.  And equally at present there is still the performance incentive - delivered in share options - to various Directors and senior managers where those beneficiaries can only ultimately redeem any cash by selling those shares on the open market.

[MyRule1]

There cannot be a more evergreen product in the Hornby group range as the Spitfire and the new 1:24 scale edition is to be produced in the UK

 

https://uk.airfix.com/community/blog-and-news/workbench/new-spitfire-test-frame-exclusive

 

Although tooling remains in the far East.

[mdvle]

2 hours ago, MyRule1 said:

There cannot be a more evergreen product in the Hornby group range as the Spitfire and the new 1:24 scale edition is to be produced in the UK

 

https://uk.airfix.com/community/blog-and-news/workbench/new-spitfire-test-frame-exclusive

 

Although tooling remains in the far East.

 

The blog post indicates that the tooling is being shipped to the UK.

[mdvle]

4 hours ago, adb968008 said:

I do wonder why Hornby still is publically traded, I get Phoenix not wanting to sink in more cash to take it private, but the benefit to the company of its disclosures / requirements to service such a small range of small share holders also seems a burden to me.

 

My recollection is that Phoenix, per regulations, offered to purchase all the shares but that a certain percentage of shareholders refused to sell to Phoenix to allow Hornby to go entirely private - though happy to be corrected.

 

But I agree the best thing for Hornby would be to go private and eliminate all those extra costs required for being listed on a stock market.

[MyRule1]

2 hours ago, mdvle said:

 

The blog post indicates that the tooling is being shipped to the UK.

I used tooling as a verb not a noun, perhaps I should have said "tool making"

[eldomtom2]

4 hours ago, MyRule1 said:

There cannot be a more evergreen product in the Hornby group range as the Spitfire and the new 1:24 scale edition is to be produced in the UK

 

https://uk.airfix.com/community/blog-and-news/workbench/new-spitfire-test-frame-exclusive

 

Although tooling remains in the far East.

Plastic kits seem a highly viable field for UK production - see companies like Games Workshop.

[1andrew1]

7 hours ago, eldomtom2 said:

Plastic kits seem a highly viable field for UK production - see companies like Games Workshop.

You would think so given the increase in container and fuel prices. A year ago, Hornby has decided to relocate the production of the Quick Build range from the UK to India so its recent move looks like a reversal of this policy. Understandable in the circumstances.

 

In terms of :

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.

I wonder what the local markets might be? i'm thinking of emerging markets with tariffs so maybe manufacturing Scalextric track or Corgi in India or Vietnam for those emerging markets? 

 

 

[eldomtom2]

3 minutes ago, 1andrew1 said:

You would think so given the increase in container and fuel prices. A year ago, Hornby has decided to relocate the production of the Quick Build range from the UK to India so its recent move looks like a reversal of this policy. Understandable in the circumstances.

Making Lego pieces seems to me to be a more expensive process that making plastic kits - after all, Lego purchasers won't want to have to file flash off! Mind you, Lego only does a relatively small amount of manufacturing in China and indeed has announced plans to open a large new factory in the US...