Hornby 2023 Annual Report

[Guest]

39 minutes ago, BachelorBoy said:

 

It seems to me that Hornby, even after a few decades, struggles with outsourcing to China. Quality is not consistent. It's not great at dealing retailers and customers either. Profits are elusive too. 

 

As people sometimes point out, Hornby is more than model railways -- especially since it's bought 25% of Warlord Games and has an option to buy it entirely. 

 

But Hornby is the best brand name in British railway modelling.

 

So why not just try to sell the brand name (and perhaps all the minor continental brands), and all the moulds. to a company in China that makes its own stuff in its own factories, but doesn't have such a good brand name?

 

(Hornby's share price is so low at the moment that the company's stock market value is LESS than the book value of all the assets. In other words, Hornby is worth more dead than alive.  You could in theory buy Hornby and sell off all the assets and make a profit. The current management is SUBTRACTING value.)

 

I think Hornby is turning around, it was before the pandemic and the current inflation crisis. TT120 and HM7000 revenue should all add to value over this current financial year and repay the investment being made in previous years.

 

I once worked for a company in the engineering consultancy sector that the city valued at less than the value of contracts that even us mere mortals were aware of. Many of us went out and bought shares because we knew it was undervalued. I only wish I had bought more shares as within 5 years they were worth 8 times what I paid for them.  I’m not saying that will happen at Hornby, but I think there is the basis for some confidence in significant improvement and the city don’t always know best. The AGM in a few weeks will give an indication of what their shareholders think of the new team.

[BachelorBoy]

46 minutes ago, The Stationmaster said:

As a matter of cat if you look at teh sahre pe rivce and teh way it has gone this year it was the previous management which has subtracted value as all the main drops in shte re price align with announcements of various parts of last year's results

 

I think you might want to proof-read and edit that :-)

 

But seriously, share prices are usually, forward looking: an indication of the what the investors think the future profits of the company will be.

 

Hornby's share performance is, of course, complicated because there are so few shares available to trade, as most of them are owned by Phoenix. 

Edited August 13, 2023 by BachelorBoy
extended comment

[Watto1990]

If, hypothetically, Hornby were inspired by Lego’s VIP rewards program for their own Hobby Rewards scheme, could Lego’s other incentives to drive D2C sales provide further inspiration, especially with Lego higher-ups joining the team? A Gift With Purchase when you spend a qualifying amount on the Hornby webstore? Crowdsourced models like Lego Ideas?

[Drifter]

1 hour ago, HExpressD said:

Bloody hell the blokes only been there for 5 minutes.

 

The level people are willing to dive into the personal lives of people at a company they are customers of is mindblowing to me, and in this hobby at least seems to be exclusive to Hornby for some reason.

You haven’t read that the way is was meant. He has been chosen maybe due to his skill set and a way of different thinking?

 

I don’t know what the cost of such a venture would be. Presumably Legoland is successful, so why not a Hornby theme park on some scale?

 

Seaside holiday area attraction. Even steal the name, Hornby, A Model World. Retail Outlet, themed rides, miniature village, cafes, railway layouts. Seems to work for PECO. Not talking Alton Towers scale.

 

As for delving into people’s backgrounds? Anyone on LinkedIn will see alerts for industry news. Shareholders would be foolish not to check. Incidentally, the entry on Linkedin is his own posting. Not someone’s opinion.
 

 

[BachelorBoy]

34 minutes ago, Gatesheadgeek said:

 

I think Hornby is turning around, it was before the pandemic and the current inflation crisis. TT120 and HM7000 revenue should all add to value over this current financial year and repay the investment being made in previous years.

The figures don't really support that. It was still losing money before the pandemic

 

The pandemic gave Hornby an unexpected windfall profit. Then it was back to business-as-usual: losing money.

 

 

 

 

[BachelorBoy]

2 minutes ago, Drifter said:

I don’t know what the cost of such a venture would be. Presumably Legoland is successful, so why not a Hornby theme park on some scale?

 

Seaside holiday area attraction. Even steal the name, Hornby, A Model World. Retail Outlet, themed rides, miniature village, cafes, railway layouts. Seems to work for PECO. Not talking Alton Towers scale.

 

 

I still think Tamiya's Plamodel store in Tokyo might be an example that Hornby is looking at. All Tamiya's products are on sale there. Workshops on learning how to airbrush. Chances to race RC models, etc. 

 

(NB this is speculation on my part)

 

https://www.tamiya-plamodelfactory.co.jp/info-shop-english/

 

 

[Guest]

3 minutes ago, Watto1990 said:

If, hypothetically, Hornby were inspired by Lego’s VIP rewards program for their own Hobby Rewards scheme, could Lego’s other incentives to drive D2C sales provide further inspiration, especially with Lego higher-ups joining the team? A Gift With Purchase when you spend a qualifying amount on the Hornby webstore? Crowdsourced models like Lego Ideas?

A couple of months ago, there was a request from Hornby’s team via the forum asking for ideas to develop the Rewards offer further. There were quite a few ideas, including some that aped Lego’s Club.

It’ll be interesting to see whether/how the Clubs actually continue as they’ve announced a Rewards tie-up with the K&ESR in Tenterden. This might previously have been a Club benefit, yet is actually open to anyone in the Rewards scheme. The TT120 club was clearly conceived before the Rewards scheme was ready

 

Crowd-sourcing model suggestions, or letting members vote on a curated list of models/liveries etc is a good shout. 

[Guest]

2 minutes ago, BachelorBoy said:

The figures don't really support that. It was still losing money before the pandemic

 

The pandemic gave Hornby an unexpected windfall profit. Then it was back to business-as-usual: losing money.

 

 

I believe they made a small profit in 2022 and then they had problems late last year. They made a gross profit last year before over commitment of stock led to problems. Revenue is increasing despite the economic downturn. Worth waiting to see what the new team does before talking of selling up. Their financial backers have shown confidence. 

[Ron Ron Ron]

Coming soon in 00 and TT120.

Hornby's new high fidelity, high speed train.

 

 

 

 

Available with lifelike trackside characters.....

 

 

 

 

 

.

Edited August 13, 2023 by Ron Ron Ron

[ColHut]

4 hours ago, Drifter said:

I was very impressed until l read his profile. 
 

Not decrying his new role but might we now see a Hornby Theme Park? 1:1 tilting APT, Ghost Train, Scalextric merry go round, the list is endless. 

 

I wish him well.

 
Well prototypical for a lot of heritage railways desperate to make some money in current climate so can hardly blame Hornby for trying every possible revenue stream. :)

 

regards

[AY Mod]

4 hours ago, HExpressD said:

The level people are willing to dive into the personal lives of people at a company they are customers of is mindblowing to me, and in this hobby at least seems to be exclusive to Hornby for some reason.

 

It's not anyone's personal life (beyond silly supposition about their reason for a career move); it's their role and work experience that they have posted on social media. No-one has anything else to go on after all.

 

Footie fans spend a lot of time moaning about club owners and managers after all.

[cctransuk]

3 hours ago, BachelorBoy said:

 

I think you might want to proof-read and edit that :-)

 

 

To date, I haven't liked to mention that.

 

However, and since it has been raised, it is getting more and more difficult to follow the SMs posts.

 

CJI.

[AY Mod]

39 minutes ago, cctransuk said:

it is getting more and more difficult to follow the SMs posts.

 

Mike's had a few localised digit difficulties over the last couple of months.

[andyman7]

On 05/08/2023 at 12:42, Barry Ten said:

Apologies if this has been mentioned before, but I when I popped into Lidl this morning on my normal post-parkrun bakery stop, there was a selection of Airfix kits in the special offers aisle. They were all priced at 6.99 and included three 1/72 planes, some tanks and a jeep. They did well out of me as I picked up the three plane kits in addition to some tasty croissants. I don't normally model in 1/72 so wouldn't have given these more than a second glance at a model shop, but I'm easily persuaded when things turn up in unexpected places, such as in Lidl. A good initiative, especially as these are the beginner kits that come with paints included, so great little projects for a rainy afternoon.

 

(The planes were a Spit, a Curtis Tomahawk and a Folland Gnat, if anyone's interested).

 

On 07/08/2023 at 10:59, Widnes Model Centre said:

The issue with this and its been going on for years, as well as Aldi?

 

Model shops pay more than this at trade prices. These kits aren’t offered to their own retailers. I’m reliably informed that the margins on these kits are 50%, we can only dream of 50% margins.

 

Hornbys response is that it draws new people into the hobby. We doubt this and if correct, how do they measure this? On the Facebook modelling pages, they are bought by existing modellers.

 

On 07/08/2023 at 12:06, Legend said:

Ah yes Lidl . Go in for a loaf of bread and come out with a Divers suit because it was on offer in the middle row! Actually Airfix has done this before with Lidl. My nephew certainly picked up Hurricane , Spitfire, Mustang and FW190  in the previous releases . I think they just occasionally come up with a promotion with Lidl . I don’t see this as shifting old stock, more increasing the visibility of the brand . Is it particularly less expensive ?    Those that like the kits , may now seek out more intricate kits from their local model shop . 

I could be wrong but I generally assumed that the stuff in the 'random items' aisles of Lidl/Aldi was generally grey market stuff - in other words, they hoover up remaindered or surplus items already in the retail chain either in the UK or abroad. The 'wholesale' price in such cases bears no relation to the normal supply chain trade price.

[cctransuk]

40 minutes ago, AY Mod said:

 

Mike's had a few localised digit difficulties over the last couple of months.

 

Ahh - sorry to have mentioned it then; my sympathies!

 

John Isherwood.

[Widnes Model Centre]

1 hour ago, andyman7 said:

 

 

I could be wrong but I generally assumed that the stuff in the 'random items' aisles of Lidl/Aldi was generally grey market stuff - in other words, they hoover up remaindered or surplus items already in the retail chain either in the UK or abroad. The 'wholesale' price in such cases bears no relation to the normal supply chain trade price.

No, we would gladly hoover them up.

 

We are told by Hornby that it’s a long standing agreement. Lidl, Aldi, B and M, The Works and Quality Save from memory.  If correct, then irrespective of the price, it must suit Hornby. Every time there has been a new Board we hope that Hornby reconsider the agreement. 

It doesn’t suit model shops as this comes up at least twice a year. Any residual stocks then are often reduced to around £3. Due to the power of social media, it’s a long time since l saw such reductions.

 

Occasionally see Revell kits in similar locations. 

[Clearwater]

If you’ve been in the themes park business, you may know which ones have struggled through the pandemic, which ones need a facelift, which need something different.   A `JV to rebrand something like Drayton Manor’s `Thomas land (I know H have given up their licence rights) coupled to rides based on other brands could be a smart strategic move.

[spamcan61]

6 hours ago, Drifter said:

 

I don’t know what the cost of such a venture would be. Presumably Legoland is successful, so why not a Hornby theme park on some scale

 

Hell no, I'd much rather they try focussing on the task that seems to have proven rather problematic in the post Sanda Kan era; producing the right number of products at the right time at a consistent quality level. Not saying that's easy.

[1andrew1]

11 hours ago, BachelorBoy said:

It seems to me that Hornby, even after a few decades, struggles with outsourcing to China. Quality is not consistent. It's not great at dealing retailers and customers either. Profits are elusive too. 

 

As people sometimes point out, Hornby is more than model railways -- especially since it's bought 25% of Warlord Games and has an option to buy it entirely. 

 

But Hornby is the best brand name in British railway modelling.

 

So why not just try to sell the brand name (and perhaps all the minor continental brands), and all the moulds. to a company in China that makes its own stuff in its own factories, but doesn't have such a good brand name?

 

(Hornby's share price is so low at the moment that the company's stock market value is LESS than the book value of all the assets. In other words, Hornby is worth more dead than alive.  You could in theory buy Hornby and sell off all the assets and make a profit. The current management is SUBTRACTING value.)

 

Most model railway companies seem to have struggled outsourcing to China. The issue with retailers seems to be more of a Hornby thing but solvable.

 

A profitable international company like Simba Dickie Group (owners of LGB, Trix and Marklin) would be a logical buyer of Hornby. Or as you say, a Chinese OEM looking to acquire a brand and distribution in the West, mirroring Kader's acquisition of Bachmann. However, Phoenix seems to be committed to an independent Hornby Hobbies for the time being, with Hornby Railways at its heart.

Edited August 13, 2023 by 1andrew1

[BachelorBoy]

52 minutes ago, 1andrew1 said:

Most model railway companies seem to have struggled outsourcing to China.

I suspect China may become a more difficult place to do business in and with.

 

Beijing's relations with the West are becoming more and more strained.

 

Let's hope Xi Jinping doesn't do anything silly over Taiwan or the South China Sea. 

[BachelorBoy]

21 hours ago, BachelorBoy said:

 

But Hornby is the best brand name in British railway modelling.

 

 

I'm changing my mind.

 

Thomas is the best brand name in British railway modelling.

[Legend]

20 minutes ago, BachelorBoy said:

I suspect China may become a more difficult place to do business in and with.

 

Beijing's relations with the West are becoming more and more strained.

 

Let's hope Xi Jinping doesn't do anything silly over Taiwan or the South China Sea. 

Might  have a few more problems than model trains if he does that !  Aside from the strained diplomatic relations and possible Armageddon , most manufactured goods seem to come from China - so there would be shortages everywhere and huge disruption to world economies 

[The Stationmaster]

21 hours ago, Clearwater said:

Depends.  Could be.  Could also be a situation where if he thinks if he has the right stock option package and there’s a possibility of using his visitor attraction skills to create something, then he might be seeing a very large personal upside.  

Agree very much with that.  If he has the visitor attraction experience and skills he sounds like exactly the person they need to develop what they have talked about (and appear to have some money set aside for).  He ought to have an understanding of how such things work and maybe he should start by looking at Pecorama to see how model railways (and other model) sales fit into the overall pattern of such an attraction.

[Legend]

1 minute ago, The Stationmaster said:

Agree very much with that.  If he has the visitor attraction experience and skills he sounds like exactly the person they need to develop what they have talked about (and appear to have some money set aside for).  He ought to have an understanding of how such things work and maybe he should start by looking at Pecorama to see how model railways (and other model) sales fit into the overall pattern of such an attraction.

all very well looking at visitor attractions , however , like Spamcan I think they need to concentrate on basics . Not enough of some goods (TT120) . They could have sold more if they’d made more . Too much of other stuff , second runs etc . I bet they still have Class 71s and J15s somewhere in the warehouse .

 

Make the right stuff at the right time and make sure the quality is correct . That’s the basics . Not “Hornbyworld” 

[Clearwater]

11 minutes ago, The Stationmaster said:

Agree very much with that.  If he has the visitor attraction experience and skills he sounds like exactly the person they need to develop what they have talked about (and appear to have some money set aside for).  He ought to have an understanding of how such things work and maybe he should start by looking at Pecorama to see how model railways (and other model) sales fit into the overall pattern of such an attraction.

 

Thanks.  He should also be able to look at the Hornby sales leger and see what sales Hornby make in Pecorama together with which are sellers and, crucially, the margin.  As I recall, they sell a fullish range and full price!