Hornby RNS Published 25 April

[The Stationmaster]

I'm not trying to get round a locked topic and if this is allowed ir might well be immediately locked to avoid further comment but here is a link to the Hornby RNS statement of 25 April -

 

https://polaris.brighterir.com/public/Hornby/news/rns/story/rd3lq8x

 

This is not the first profits warning from Hornby for the current trading year and their share price has shown a rather 'lumpy' overall decline for some months as this link will show (it if links to theh correct page)

 

https://www.Hornby.plc.uk/share-price-graph/

[micklner]

Blaming poor sales .

[Michael Hodgson]

Poor sales does tend to result in less profit.

[County of Yorkshire]

Not good news.
 

Saying that, I can’t remember the last time I bought anything new from Hornby. They’ve been chasing niche (all the LNER Pacific’s - even the esoteric ones, W1, Turbomotive etc), and speculative (Steampunk and TT ranges) for some time now. All the while, they’ve surrendered swathes of market share in the bread and butter OO market to others (Accurascale, Rapido, Dapol). 

 

Ergo, these trading results are hardly surprising. 

[The Stationmaster]

There are some interesting things in the statement one being the continuing growth in online sales - although we don't know how they breakdown by brand.

 

Something which is worth looking at is the January Trading statement - which spelt out caution about the year end figures so really this is not completely unexpected.  But it was also quite bullish about 3rd Quarter sales figures while this one presents that Quarter in a different light.   Which takes us to sales

 

When it comes to sales note that they have grown year-on-year - what has happened is that they have fallen short of budgeted growth. There are several ways of looking at that ranging from the sales budgets and targets being over-optimistic to goods not being received from factories in order to meet sales targets (the January statement implies that the latter was not the case in the 3rd Quarter).  There are all sorts of other potential factors in between these two and we might learn more when the Annual Report comes out.

 

For some the most worrying factor will no doubt be the huge change in the cash position over the trading year but it is still well within current borrowing cover arrangements although it needs future sales to put it back into positive territory.

 

Another interesting thing is how the shares also dropped when the  January Trading Statement was published but then bounced back up before starting the rather lumpy overall decline to mid April levels.  So something similar - albeit from a lower level - might happen this time and indeed there were signs of it in Friday's trading?

 

So is it bad news?  Yes or rather definitely not good news.  is it disastrous news?  Probably not but it might be pointing to a need to more accurately forecast revenue and control costs at a time of market uncertainty and increasing competition in, particular,  in the r-t-r marketplace?  But while that is easy to say that whet we don't know is how things breakdown in terms of cost and revenue between the brands and that is something we will probably never know.

[Michael Hodgson]

The hiring of a new CEO a couple of months ago may also have a bearing on how future results pan out.

[County of Yorkshire]

3 hours ago, Michael Hodgson said:

The hiring of a new CEO a couple of months ago may also have a bearing on how future results pan out.

Would that be the former CEO of Paperchase which has very recently gone to the wall? 

[Michael Hodgson]

41 minutes ago, County of Yorkshire said:

Would that be the former CEO of Paperchase which has very recently gone to the wall? 

Well yes, that would certainly have an effect on the profits

[The Stationmaster]

11 hours ago, County of Yorkshire said:

Would that be the former CEO of Paperchase which has very recently gone to the wall? 

Hornby RNS is your friend -

https://polaris.brighterir.com/public/Hornby/news/rns/story/xq345qr

 

As ever most of this sort of information is readily available from the original source (i.e. the source the media use for their version of things).  In addition of course there is information available, free of charge  for UK registered companies, from Companies House.  

 

Mr Raeburn is a Director of 6 (six)  companies which are part of Hornby in one way or another and he became a Director of all of them from 23 January this year.  Two of those companies are dormant and haven't traded for a long time, two submitted separate accounts last year, and the other two show their results in the same document and are effectively what we know as 'Hornby'. 

[adb968008]

Reading the report, they missed Q3 target (TT did slip), but Q4 was higher than target (TT was delivered), but Q4 did not compensate for Q3..so from that we can deduce combined HY2022/23 was down.

 

Quote

After a 3rd quarter sales performance that fell short of expectations, Group sales for the 4th quarter were more encouraging and ahead of the same period last year.

The stronger close to the year, however, did not fully recover the shortfall in performance in the 3rd quarter and, whilst Group sales and gross margins for the financial year ended 31 March 2023 were ahead of the prior year, we remained behind internal budgets for the full-year.

 

I’m not surprised, Q4 2022 (Hrn Q3) we had the Liz Truss encounter, fear for our energy bills, £ collapse, interest rate hikes…. Even the hardy would reign in their spend.

 

Q1 2023 (Hrn Q4) however, the TT dawn weve been hyped should have been a huge sunny rainbow, but it appears the pain delayed of Q4 2022 (Hrn Q3) still hasnt been relieved.

is TT not as big a bang ?

did 00 crash ?

 

personally, Ive not seen too much excitement in new oo releases this year, its felt a bit subdued when it comes to my postman delivering from Margate. I note Dublo Scotsmans landed, which appeals to some niches.

 

The concern I see is the conversion of cash into stock… the hobby is fashion, and last years fashion can be hard to shift, even more so when the economy is tight.

2023 will see more competition to instock items like 31,37,47,50,56,60,66,92… the perennials of modern image have been all but eaten, in some cases by higher detailed and cheaper alternatives.

 

Do they wait to sell last years, before buying more ?

or

spend more this year and play the long game on last years stock ?

or 

have some for of sale, and get the cash back ?

 

i’m not rushing to buy any more 31, 50,56 or 60’s thats for sure.

 

R3171 P2 Cock of the north was announced in 2013, and still graces the catalog.

Edited May 1, 2023 by adb968008

[The Stationmaster]

One point ADB - they did not say that (their) Q4 was ahead of target but that, quote -

  'Group sales for the 4th quarter were more encouraging and ahead of the same period last year.'

 

Which is the same, albeit with slightly different wording, as they said in their January statement about (their) Q3, quote -

'Group sales for the third quarter covering the key Christmas trading period were ahead of the same period last year.' 

 

So by implication neither quarter met, let alone exceeded, budgetted sales  targets.   But - again by implication - their Q4 figure was better than last years (i.e. 'more encouraging') by a greater margin than their Q3 had been.   In other words sales have increased compared with the previous year but not to the extent they had forecast.

 

All of this - as far as we know so far - is presumably in terms of raw numbers with no inflation adjustment so the picture might not be quite as rosy once inflation is taken into account.  IAnd they did note in their January statement that the better Q3 figures were in part due to price increases.   But they have in both statements noted (general) inflation as a risk area.

 

The Annual Reort is going to make very interesting reading.

[adb968008]

On 02/05/2023 at 10:36, The Stationmaster said:

The Annual Reort is going to make very interesting reading.

Quite.

 

interest payments maybe something to look at as well.

[Ron Ron Ron]

Is there a bit of spring cleaning taking place?

 

(see another thread in this section of them forum)

 

 

.

[Bucoops]

36 minutes ago, Ron Ron Ron said:

Is there a bit of spring cleaning taking place?

 

(see another thread in this section of them forum)

 

 

.

 

Does make you wonder.

[The Stationmaster]

47 minutes ago, Ron Ron Ron said:

Is there a bit of spring cleaning taking place?

 

(see another thread in this section of them forum)

 

 

.

Poor results continuing into Q4 and into the annual totals.  New Chief Executive who will no doubt need to show that he is not only aware of that situation but needs to reassure the shareholders that he is doing something about it.  That in turn probably spells changes as doing 'the same old same old' might be said to have got the company into this position (whether it has or not).  But never forget that what we don't know is the sales performance and bottom line profitability (or loss)  of Hornby's various brands and that might potentially have an impact on what  happens next.

 

RNS might gve us an occasional clue; the Annual Report could well herald changes;  brands offered fr sale, especially continental brands,  and the situations vacant columns, might also convey messages.  Time will tell and we shall be living in interesting times.

[adb968008]

I think its safe to say change is coming.

 

You cannot change leader and maintain a negative course as a continued course of action, unless theres a very big plan under wraps.

 

Aircraft carriers tank a long time to change course, but a flotila of smaller ships can change heading very quickly or even scatter.

 

Is Hornby an aircraft carrier, or a flotilla or both ?

Edited May 11, 2023 by adb968008

[The Stationmaster]

Hornby Non-Exec Director Henry De Zoote has notoified the Board that he intends to step down at the end of this month.  He is leaving to focus ona full time roll advising the PM on Artificial Intelligence.   I wonder if a new nominee foom Phoenxix will be replacing him as Non-Exec Director?

 

The low share price has dipped slightly this morning to 21.09p according to one online source,; the high price remains at 24p but presumably that is most likely to be an offer price rather than a bid.

[adb968008]

20 hours ago, The Stationmaster said:

 He is leaving to focus ona full time roll advising the PM on Artificial Intelligence.   

it’s going to be a crowded space in Downing street.

 

I’ve spoken to 4 people in the last week, all whom are advising the PM/Govt on AI, one of them being a well known fire breathing celebrity investor.

 

Tomorrow is AI day at London Tech week so I’m expecting a bunch of advisors in there too.

 

Seems to be a trend, but when I sat in Artificial Neural Networks class 30 years ago, I was one of 3.. we all left with our natural neural networks blown.

 

The general feast I am seeing is how to make money out of AI…, not “save the world” from it portrayed in the media.

 

 

Edited June 14, 2023 by adb968008

[The Stationmaster]

14 hours ago, adb968008 said:

it’s going to be a crowded space in Downing street.

 

I’ve spoken to 4 people in the last week, all whom are advising the PM/Govt on AI, one of them being a well known fire breathing celebrity investor.

 

Tomorrow is AI day at London Tech week so I’m expecting a bunch of advisors in there too.

 

Seems to be a trend, but when I sat in Artificial Neural Networks class 30 years ago, I was one of 3.. we all left with our natural neural networks blown.

 

The general feast I am seeing is how to make money out of AI…, not “save the world” from it portrayed in the media.

 

 

Why am I not surprised???👀

[CUCKOO LINE]

So no AI  Clever to replace Design Clever then !