Hornby 2023 Annual Report

[1andrew1]

1 minute ago, Gatesheadgeek said:

Was more Hornby railways I was worried about. There’s a trainy thing in one of the recent films. Was it Solo? Airfix would presumably be a good fit.

Palitoy in the early 1980s offered the MPC Star Wars kits under the Airfix brand. However, Revell now seems to have the licence. (Revell also has the James Bond licence too.)

https://www.revell.de/en/products/licences/star-wars/?utm_source=website&utm_medium=home-cat-en&utm_campaign=star-wars

[Widnes Model Centre]

9 minutes ago, Gatesheadgeek said:

Certainly concessions are an opportunity. Fenwicks in Newcastle has a decent stock of Hornby OO and could be expanded to a mini version of what they have planned in Margate. Am wondering if they plan to have that ready for the AGM next month, so we may not have long to wait.

7 minutes ago, Gatesheadgeek said:

Yes I thought some one was already there but am not au fait with that area. Does it still sell well? 

The Revell is ‘on offer’ in our shop and has been for a good while…

 

Bandai is finer detail and a commensurate price. That does sell well. 

 

[ruggedpeak]

35 minutes ago, Widnes Model Centre said:

Not quite sure if posters are advocating for Hornby not to become involved with Star Wars. If so, too late.

For me this is poorly executed in a way that Lego would not do. Luke's face is rubbish. Presumably Mark Hamill owns the rights to his face so Hornby couldn't afford it! No Ewoks models - you can't do anything Endor related with a freaking Ewok or 6! No tree to crash into - that whole sequence ends with one of them hitting a tree. Even the figurine version of the speeder had an exploding function - push a button and it blew apart, then clipped back together. And it has old grumpy red spiky face on because it was launched for the Phantom Menace, the graveyard of product licencing even though he had nothing to do with Endor etc. Good idea badly executed. Lego nail this stuff and make it attractive.

 

I think Hornby, for trains at least, should look at Marklin, like Lego they understand the play factor and the need for it to be attractive. In amongst these starter sets are a Haribo wagon in a freight train (part of a series of household product licences applied to one wagon type, others include Muller Rice, Ritter Sport, chocolate biscuit brand Prinz, Pez candies etc ), a fire department train and a train with a wagon load of Porsche racing cars. These are all attractive propositions to parents and children, and don't all require licencing. The Porsche one has a great little video. Even the Batman train has just enough Batman-esque edginess to it. Can't believe Haribo licencing is as expensive as Star Wars?

 

https://www.maerklin.de/en/products/gauge-h0/sets/starter-sets

 

And of course Marklin do full monte very expensive detailed models.

[Guest]

40 minutes ago, 1andrew1 said:

Palitoy in the early 1980s offered the MPC Star Wars kits under the Airfix brand. However, Revell now seems to have the licence. (Revell also has the James Bond licence too.)

https://www.revell.de/en/products/licences/star-wars/?utm_source=website&utm_medium=home-cat-en&utm_campaign=star-wars

Am I imagining it or did Hornby do an 007 tie-in? Goldeneye? 

[melmoth]

4 hours ago, ruggedpeak said:

 

However if Hornby brands can move into higher value areas somehow then good news. Must be a huge margin on that Eiffel Tower. And there are loads of variants of the Lego Millenium Falcon over many years that have all sold out. Completely mad but Lego are coining it. Hornby plc need to find their groove like Lego did, but Lego almost sank in the process.

 

 

Surely Flying Scotsman is Hornby's equivalent of the Millenium Falcon here?

[The Stationmaster]

On 15/08/2023 at 16:40, ruggedpeak said:

 

(snipped)

However if Hornby brands can move into higher value areas somehow then good news. Must be a huge margin on that Eiffel Tower. And there are loads of variants of the Lego Millenium Falcon over many years that have all sold out. Completely mad but Lego are coining it. Hornby plc need to find their groove like Lego did, but Lego almost sank in the process.

 

 

Don't necessarily confuse 'higher value' with better return on investment and greater profitability.  On that basis Hornby would stop making Corgi models and concentrate on Pocher or only produce model railway items under their Hornby Dublo brand.

 

The key to it at the moment  is high levels of profitability at every price point level and little or no surplus stock left unsold.  If there's a - profitable  for them - market for high value (aka higher price point) products they will no doubt go for that but one has to wonder why they aren't making a small fortune out of highly priced, value added locos?  Or are those locos reducing their losses, or is the cost of producing and marketing them in small numbers detracting from their potential profitability?

 

We don't know enough about the numbers to know one way or the other but what they have said suggests that they are asking those questions and the answers might well be one way in which their various ranges do, or don't, develop.

[RJS1977]

The trouble with the Hornby Dublo range is that it is aimed at people who had HD first time round. HD production ceased nearly 60 years ago, so its target segment is over 65s or over 70s. They're not going to be around forever.

 

If Hornby is to survive long-term, it needs to be growing the market in younger age ranges, with more affordable models.

 

Not saying there isn't a place for the "nostalgia market" - as a way of raising funds to support development of new items for the lower end of the range - but it's only really a stop-gap solution.

[The Stationmaster]

On 15/08/2023 at 21:31, melmoth said:

 

Surely Flying Scotsman is Hornby's equivalent of the Millenium Falcon here?

An interesting question about 'Flying Scotsman' should be if all the versions they have done for the centenary are a money pit or a money spinner?  It must have cost them a fair old whack in research and overhead cost, plus tooling, to get all those different versions sorted and suitably packaged ready to advertise and sell.  

 

So have they achieved 100% sales?   But far more importantly once you get down to the bottom line have they achieved the best possible return on the money which has been spent on them or would Hornby have got a better return spending that money elsewhere?

[The Stationmaster]

6 minutes ago, RJS1977 said:

The trouble with the Hornby Dublo range is that it is aimed at people who had HD first time round. HD production ceased nearly 60 years ago, so its target segment is over 65s or over 70s. They're not going to be around forever.

 

If Hornby is to survive long-term, it needs to be growing the market in younger age ranges, with more affordable models.

 

Not saying there isn't a place for the "nostalgia market" - as a way of raising funds to support development of new items for the lower end of the range - but it's only really a stop-gap solution.

But there are more 65 year olds coming along every year.

 

And while the name might appeal to those of us who remember Hornby Diublo with some affection theh more important question is do teh models?  As far as I'm concerned the answer is a resounding 'no' and using the HD name is simply picking on a nostalgic title for  a rather different model range (complete with plastic tender bodies for steam outline models).  It's as much about about marketing as it is about appealing to a particular age group,  And  even then they seem to not understand the collector market, which seems to be what they are aiming at(?), and are making a hash of things with the Deltic.

[Bucoops]

Here's something I didn't know until we bought one for our daughter - the little toy Ocado vans are made by Hornby so it looks like they are also into producing promotional items for other brands. I believe originally they were given away free with your first order - it's a tea towel now but they sell the vans for £8 each.

[BachelorBoy]

1 hour ago, The Stationmaster said:

 It's as much about about marketing as it is about appealing to a particular age group,  

Marketing is about understanding what people want and giving it to them.

 

So deciding to make and sell a particular product because it appeals to a particular age group is marketing.

[RJS1977]

3 hours ago, BachelorBoy said:

Marketing is about understanding what people want and giving it to them.

 

 

Surely marketing is about understanding what people want and selling it to them.... ;-)

[RJS1977]

4 hours ago, The Stationmaster said:

But there are more 65 year olds coming along every year.

 

But those new 65 year olds won't have the same memory of HD. They certainly won't have had the experience of seeing brand new HD locos in the toy/model shop's window and hoping a parent/grandparent buys it them for birthday/Christmas.

 

Whilst I have some sentimental attachment towards the Triang brand (largely due to my father's items), I was born several years after the Triang name ceased to exist (at least in the model railway market). I doubt Hornby's recent "Triang" models are aimed at me....

[PeterStiles]

4 minutes ago, RJS1977 said:

4 hours ago, The Stationmaster said:

But there are more 65 year olds coming along every year.

 

But those new 65 year olds won't have the same memory of HD.

I'm not 60 yet, let alone 65 but the 'new' HD locos appeal to me. The heft of a die-cast body on a loco brings back Boris The Blade's "weight is quality" sales argument.

[stewartingram]

I'm 75 next February, my 1st train set was a HD Silver King and tinplate Gresley coaches (teak finish I think). SandI have memories of HD, but what are they? So, remembering back, (and applying somewhat more of todays thinking), solidly built, good reliable runners (I eventually got an N2 and a Duchess), but crude rolling stock. Somewhat better plastic bodied wagons (were they SD6?) came after 2 rail was introduced. Sometime after 1960 I traded all my 3 rail in for 2 rail Triang. I was beginning to 'model' but the running was poor. Everything was cheaper plastic, Mk1 coaches and a Brush 2 looked good (at the time). 

Move forward to today. We've had HD's demise, resurrection by Wrenn (with many fictional items), & later demise of Wrenn. I never went for Wrenn, always thought it as overpriced tat trading on HD models. Even Triang now produced 'better' models - though locos weren't as well built as HD even if they looked better. Generally since the move to China, Triang (now Hornby) has come on in leaps and bounds. 

Very recently 'Marketing' has taken a shine to produce items in the guise of HD, which it is not. They are their supposedly top of the range products, priced accordingly. Sold on the promise of nostalgia, with diecast (not plastic) bodies. Many more recent locos of course had much diecast metal in the bodies to give weight, now it is pushed as the 'golden cup' for models, enhanced by being put in a 3 rail box (they even got that wrong).

I've stayed away from them. They are not models for layouts but for collectors cabinets, who I think very soon will see through the marketing. Too expensive for me (retired). & not my era etc (I'm Cambridge area in the transition era (mainly) - though I do get distracted sometimes!). I have I think a complete Cambridge area collection of locos, so unlikely to expand my fleet (too many now maybe).

[Covkid]

7 hours ago, RJS1977 said:

The trouble with the Hornby Dublo range is that it is aimed at people who had HD first time round. HD production ceased nearly 60 years ago, so its target segment is over 65s or over 70s. They're not going to be around forever.

 

If Hornby is to survive long-term, it needs to be growing the market in younger age ranges, with more affordable models.

 

Not saying there isn't a place for the "nostalgia market" - as a way of raising funds to support development of new items for the lower end of the range - but it's only really a stop-gap solution.

 

7 hours ago, The Stationmaster said:

But there are more 65 year olds coming along every year.

 

And while the name might appeal to those of us who remember Hornby Diublo with some affection theh more important question is do teh models?  As far as I'm concerned the answer is a resounding 'no' and using the HD name is simply picking on a nostalgic title for  a rather different model range (complete with plastic tender bodies for steam outline models).  It's as much about about marketing as it is about appealing to a particular age group,  And  even then they seem to not understand the collector market, which seems to be what they are aiming at(?), and are making a hash of things with the Deltic.

All that is true but......

I am 65 in four years.  Would I want a Flying Scotsman ?  No, despite it being one of two BR steam events I saw prior to end of steam in 1968.  Reckon it was about 1966 and my dad took me to Hinckley (I think) to see it. Give me maroon or Brunswick green anyday - with a Stanier "hooter".  But really,  I would have an all bells and whistles gold plated class 25 or 40

 

I really don't think that Simon Kohler's golden age of steam will go more than a decade or two.  

[adb968008]

4 hours ago, RJS1977 said:

 

Surely marketing is about understanding what people want and selling it to them.... ;-)

Marketing and Sales are not the same thing.

 

Marketing enables sales, but its the sellers job to fill the order book, not marketing.

 

Marketings job is to make you want it, Sales job is to sell it to you.

Marketing is largely aimed at “us“ the customer, Sales traditionally was to sell to the retailers, and more recently to their own website.

 

I sometimes think Hornby has this confused too.

 

Edited August 17, 2023 by adb968008

[BachelorBoy]

3 hours ago, adb968008 said:

Marketing and Sales are not the same thing.

 

Marketing enables sales, but its the sellers job to fill the order book, not marketing.

 

Marketings job is to make you want it, Sales job is to sell it to you.

Marketing is largely aimed at “us“ the customer, Sales traditionally was to sell to the retailers, and more recently to their own website.

 

I sometimes think Hornby has this confused too.

 

 

 

And if the marketing is done properly, the product should be very, very easy to sell. 

 

[jjb1970]

I don't see Dublo as being just about nostalgia. The name may be, but there is a market for premium metal bodied models. How big the market is I don't know, in some European markets there seems to be an appreciable demand for such models as well as in China and Japan. Dapol tried it with their Black Label A4, I don't know whether that was only intended to be a one off or if sales were disappointing and led them to abandon the idea but other producers in other markets have developed the concept very successfully. Personally I much prefer metal bodies and am willing to pay a price premium. If I look at Asia and the rest of Europe that segment isn't a nostalgia driven segment, if anything it seems to be weighted more towards modern outline subjects and the people buying them cut across the age spectrum. I really fancied the Dublo Deltic but was put off by the buy now pre-order thing in which they sold out almost overnight (though I accept that is great for Hornby). This is purely another personal preference but I prefer to buy a model when it is on a sellers shelf rather than pre-ordering, one reason I like Bachmann more than other manufacturers is their philosophy of announcing models when they're ready and then leaving it to customers to look at them and either buy or not buy without all the advance frothing, marketing spin, pre-ordering stuff etc (I know a few years ago Bachmann were one of the worst culprits for announcing years before there was any risk of seeing anything).

[adb968008]

6 hours ago, BachelorBoy said:

 

 

And if the marketing is done properly, the product should be very, very easy to sell. 

 

One morning, my wife asked, what are we doing today.

I replied we are going on a really long hot journey to see a pile of stones.

a good coach once told me, sales is about selling something to someone who already wants it.

 

she agreed and we went to Pompeii.

 

Edited August 18, 2023 by adb968008

[PeterStiles]

1 hour ago, adb968008 said:

a pile of stones.

That wasn't The Stones, it was Pink Floyd...

[The Stationmaster]

17 hours ago, RJS1977 said:

 

Surely marketing is about understanding what people want and selling it to them.... ;-)

Exactly so - and it is very much about understanding where the most profitable market lies.  That usually means the largest market or a smaller market which will bear the much higher price needed when offering a smaller quantity of something.  But as already noted above it b boils down to making something people (o in sufficient numbers) want to buy and convincing a lot more people who had never thought about it in the first place that they want one too.

 

14 hours ago, Covkid said:

 

All that is true but......

I am 65 in four years.  Would I want a Flying Scotsman ?  No, despite it being one of two BR steam events I saw prior to end of steam in 1968.  Reckon it was about 1966 and my dad took me to Hinckley (I think) to see it. Give me maroon or Brunswick green anyday - with a Stanier "hooter".  But really,  I would have an all bells and whistles gold plated class 25 or 40

 

I really don't think that Simon Kohler's golden age of steam will go more than a decade or two.  

I think you mean SK's golden age of East Coast pacifics!     Whereas in reality - certainly the way 00 in particular is going now - it increasingly seems to be about making a better mousetrap.  And that encourages people to buy something they wouldn't have otherwise bought either because it doesn't fit their modelling theme or they've already got an earlier version of one and it works perfectly well.

 

The (true) collecting market doesn't work like that because it either goes on themes (e.g every EE Type3/Class 37 model ever issued by anybody) or by manufacturer (e.g one of everything they've ever made or one of every loco or wagon or whatever they have ever made).  That market will usually thrive,  and can hit high subsequent resale prices, on exclusivity and genuinely limited numbers and that in turn in modern productions can mean high retail prices for limited production runs (and no need for certificates for serious collectors).    So is that teh market which Hirnby Dublo is aimed at?  Hornby haven't seem very sure about that. 

[ColinB]

19 hours ago, stewartingram said:

I'm 75 next February, my 1st train set was a HD Silver King and tinplate Gresley coaches (teak finish I think). SandI have memories of HD, but what are they? So, remembering back, (and applying somewhat more of todays thinking), solidly built, good reliable runners (I eventually got an N2 and a Duchess), but crude rolling stock. Somewhat better plastic bodied wagons (were they SD6?) came after 2 rail was introduced. Sometime after 1960 I traded all my 3 rail in for 2 rail Triang. I was beginning to 'model' but the running was poor. Everything was cheaper plastic, Mk1 coaches and a Brush 2 looked good (at the time). 

Move forward to today. We've had HD's demise, resurrection by Wrenn (with many fictional items), & later demise of Wrenn. I never went for Wrenn, always thought it as overpriced tat trading on HD models. Even Triang now produced 'better' models - though locos weren't as well built as HD even if they looked better. Generally since the move to China, Triang (now Hornby) has come on in leaps and bounds. 

Very recently 'Marketing' has taken a shine to produce items in the guise of HD, which it is not. They are their supposedly top of the range products, priced accordingly. Sold on the promise of nostalgia, with diecast (not plastic) bodies. Many more recent locos of course had much diecast metal in the bodies to give weight, now it is pushed as the 'golden cup' for models, enhanced by being put in a 3 rail box (they even got that wrong).

I've stayed away from them. They are not models for layouts but for collectors cabinets, who I think very soon will see through the marketing. Too expensive for me (retired). & not my era etc (I'm Cambridge area in the transition era (mainly) - though I do get distracted sometimes!). I have I think a complete Cambridge area collection of locos, so unlikely to expand my fleet (too many now maybe).

I am 69 so I remember Hornby Dublo, I still have the original locos my Dad bought me all those years ago (converted to 2 rail). The modern Hornby Dublos are just your normal Hornby Loco but with a diecast body. They aren't even any better made than the plastic model they are based on. After receiving one with duff valve gear and watching a YouTube video from a disillusioned Sir Nigel Gresley in HD, owner, I wonder if Hornby figures that most will be never run so does even less QA that on their normal models.

[phil-b259]

On 17/08/2023 at 20:14, Covkid said:

 

All that is true but......

I am 65 in four years.  Would I want a Flying Scotsman ?  No, despite it being one of two BR steam events I saw prior to end of steam in 1968.  Reckon it was about 1966 and my dad took me to Hinckley (I think) to see it. Give me maroon or Brunswick green anyday - with a Stanier "hooter".  But really,  I would have an all bells and whistles gold plated class 25 or 40

 

I really don't think that Simon Kohler's golden age of steam will go more than a decade or two.  

Given the hordes willing to pay to p whack to come and see the Flying Scotsman at the Bluebell over the next couple of weeks (all trains it hauls required pre booking and they sold out months in advance) sales of FS merchandise (including models) isn’t going to be a problem even if there is nobody alive who remembers it in BR service.

 

Similarly with Tornado and the forthcoming Price of Wales locos flying the flag for ‘big LNER locos’ on the mainline you also have opportunities to sell those to people who were  not around when the original things were plying their trade on ECML expresses.

 

More broadly though, interest Model steam locos is not going to wane and vanish simply because those who ‘remember’ it as a child are no longer alive. There has been considerable interest in ‘pretty’ pre-grouping locos in recent years and nobody is still alive that remembers them for example - which perhaps indicates how the market may move. Less interest in the late BR steam scene and a move to things inspired by earlier times or the Heritage railway scene (which is also looking emphasise ‘vintage’ / pre-grouping stock where possible as a way of drawing in visitors)

 

 

Edited August 24, 2023 by phil-b259

[The Stationmaster]

Hornby statement published  today as the  AGM Trading Statement., in summary

 

Period 01 April - 31 August - sales and margins better than the previous year and in line with Annual Report forecast of low double digit revenue growth.

As usual full yea result will depend on the Christmas sales period

Outstanding order book strong with new products still to be released.

New Group Sales Director joined in August - the company expects to see the impact of that change over the coming months

Internet invoiced sales up 34% on 'prior year (Note*) and 86% up on 2021

Progress made in reducing 'aged stock' but inventory currently remains high due to stock build  ahead of Autumn sales peak and expected to unwind over the Christmas period.

Focusing on the key initiatives outlined in the Annual Report; expectations for the full year are unchanged.

Interim Results due in November

 

Note *. I'm not sure what 'prior year' means as it could mean 'previous year' (but why not say so?)  or the earlier (prior)  part of this year or something else?.  No doubt that will be made clear in teh report to the AGM.

 

So overall the evenue story sounds pretty good; the inventory story hedged round with a touch of caution; internet sales dashing ahead with real growth.  

 

But the shares look to be flat lining at at around 16.50 with a buy price of 17 quoted by some sources so it seems the small investors are fighting shy which might be due to worries about the toy sector with both Lego and Playmobil reporting big drops in sales in their most recent annual results.