RMweb Gold TheSignalEngineer Posted September 25, 2012 RMweb Gold Share Posted September 25, 2012 Aren't Dapol selling their 00 LMS coaches at something comparable given the Airfix price of about 30 years ago? I would be interested to see the relative price changes on the relative ranges for stock that is from old tooling or designs Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted September 25, 2012 Share Posted September 25, 2012 On the other hand they claim to have paid off 40% of the debt they had this time last year: that money was earned somewhere, and is not going to be taxed as profit...Giving your share price a wobble with an announcement does open up certain opportunities for those looking to acquire the shares cheaply. Oh dear, I am such a cynic when it comes to the stock market manoeuvres of PLC's. But concerning the element of their product lines that we are most interested in. It is pretty obvious that there is still decent profit in UK RTR OO model railways. Just look at the activity. Bachmann UK, the main competitor, marching out a growing product line clearly targeted at middle age and up modellers; reporting favourable trading results. Heljan - who are a family owned business so we get no insight to their financial state - contracting the chassis work out to a Chinese supplier, but doing their plastic die making (and injection moulding and finishing?) in Denmark. The continued introduction of new models to the line argues that all is well there. And finally Dapol, a company which not so long ago claiming it was N all the way, are pursuing a vigorous return to OO and appear to be succeeding. (While we are about it, Dapol's action tells me that the oft made suggestion that Hornby should enter the N market is probably not going to happen. Dapol will not have casually re-entered the fray in larger scales; they will have done it for a sound business reason. That sound business reason is likely to be that between them Farish by Bachmann and Dapol have the N market near saturation: cancellations of competing N models (was it a 9F and Voyager?) by BachFar are supporting evidence.) Where now for Hornby, in respect of RTR model railway? I so doubt a return to the UK for manufacturing other than for a few items that can be produced on a wholly automated basis. There remain hosts of low wage potential employees in under-developed countries, able to perform the high labour content work that a finely detailed model demands without imposing to much cost on the finished product. China is begining to be 'over' for this product category: we have been here before in my lifetime, Japan did this in the 1970s, with all the short sighted 'analysts' then running around like headless chickens about the irresistible rise of their manufacturing dominance. It isn't ever forever... Link to post Share on other sites More sharing options...
mow Posted September 25, 2012 Share Posted September 25, 2012 Guardian coverage. http://www.guardian.co.uk/business/2012/sep/25/Hornby-shares-crash-olympics-profit-warning "see potential for the supply disruption to persist next year." Link to post Share on other sites More sharing options...
Glorious NSE Posted September 25, 2012 Share Posted September 25, 2012 Not at all surprised by this, I visited the Hornby shop in Westfield Stratford the other week and it was jam packed full of multicoloured Olympics souvenirs at X for a tenner and the like... Link to post Share on other sites More sharing options...
Miss Prism Posted September 25, 2012 Share Posted September 25, 2012 I understand the Hornby shop in Westfield Stratford is now closed. Edit: Sorry for the above. Hornby will continue the lease on its Westfield Stratford shop until the end of October. Link to post Share on other sites More sharing options...
Seanem44 Posted September 25, 2012 Share Posted September 25, 2012 There are numerous factors effecting things. Right now, China, though still a cheaper option that productuion elsewhere, is having its own problems. Worker riots are becoming more frequent, as are demands for higher pay. One need only look at the Apple operation to see the headaches they are having. The down economy has also played into effect, as many are tightening their belt buckles. Even for the Middle Class, many may elect to save $100 that they would otherwise spend on a luxary and put into savings as a "just in case". I think that right now, many of the programs are a little over ambitious. Perhaps, at least for the next few years, companies should focus on fewer models to scrape by with modest profit. Though not exciting, it is a safer route to take. Link to post Share on other sites More sharing options...
RMweb Premium ELTEL Posted September 25, 2012 RMweb Premium Share Posted September 25, 2012 I like others could see this coming, glad I do not have shares in Hornby I think the point made earlier is that Hornby thought they could make a quick buck out of the Olympics in this economic climate it was never going to happen. It seems also they are burying there head in the sand, and all the model railway activity seems to be on OO or HO in some of ther european brands They seem to be ignoring the move by many modellers to N gauge and also the surge in RTR O gauge models. Bachmann seized the opportunity many years ago and now Dapol & Heljan are moving into O gauge I believe the manufacturing will in the long term have to come back to the UK I hope Hornby see the light before it is to late..... Link to post Share on other sites More sharing options...
lapford34102 Posted September 25, 2012 Share Posted September 25, 2012 The company is not the first to suffer due to the high expectations that the Olympics would bring untold riches. I believe this is the main reason to why the Hornby Group (my emphasis) is in the situation it is. There's plenty of other 2012 bits being massively discounted. But you're more likely to shift a bargain £3 teeshirt than you are diecast taxis. Sure all the other factors have a bearing but the Olympic effect seems to have backfired somewhat. I know trade in Weymouth suffered quite badly during the Olympics simply because the usual visitors had been scared off. Back with Hornby it does seem with hindsight what they were selling and at the prices they were asking were at best optimistic but if it had gone the other way what would we be saying now. I know this is a railway forum and we're focussed on that aspect but the group is not simply one major product line. I haven't had time to look closely but I'd been interested to see the sales figures for each of their main lines. I would expect Airfix which Hornby have hauled back up to prominence and increasing respect to have done well.. Stu Link to post Share on other sites More sharing options...
Seanem44 Posted September 25, 2012 Share Posted September 25, 2012 I like others could see this coming, glad I do not have shares in Hornby I think the point made earlier is that Hornby thought they could make a quick buck out of the Olympics in this economic climate it was never going to happen. It seems also they are burying there head in the sand, and all the model railway activity seems to be on OO or HO in some of ther european brands They seem to be ignoring the move by many modellers to N gauge and also the surge in RTR O gauge models. Bachmann seized the opportunity many years ago and now Dapol & Heljan are moving into O gauge I believe the manufacturing will in the long term have to come back to the UK I hope Hornby see the light before it is to late..... As an N Gauger, I agree fully with this. I was a little shocked when they discontinued the Lyddle End range. However, that being said, I can also see why Hornby would not get into N Gauge. Though I would love another manufacturer in the mix, and more models, the barriers to production are significant. Hornby would essentially be starting form scratch. Initially an N Gauge operation would cost a lot of money to start up. I feel that this was an oppurtunity that has passed and they missed the boat, at least while they are in their current situation. Link to post Share on other sites More sharing options...
ThaneofFife Posted September 25, 2012 Share Posted September 25, 2012 I seem to recall a few here thought it was sound business sense for H to keep on pumping out the dated mk2d's from it old tooling because apparently people keep buying them-apparently. Now clearly H's profits dont rest on one model but does it hold water if you apply the same logic to a whole raft of others that continue to be sausage-machined out when they should have been pensioned off? Link to post Share on other sites More sharing options...
Grimleygrid Posted September 25, 2012 Share Posted September 25, 2012 As previous members have said it is not really a surprise. Take the Tata liveried 60099 as an example. Whilst I am a huge class 60 fan and in my opinion, (I know that I am slightly biased!), it is still the best 00 gauge diesel available. But a with a RRP of £150, are you sure? Okay so you can get hold of one for around £115/£120 but still that is a lot of cash especially as it is not even sound fitted. Considering we are still in a recession and with Joe public having tight purse strings, I personally believe that Hornby could listen to their customers more which in turn would help their profits. You only have to look at model railway forums on the internet and how many times do you see a thread mentioning a Large Logo 56?!! Surely that would be a money winner for them? But alas not, another Railfreight Coal version is released, oh and named too! What about an Original Railfreight 56? I know 56040 was released but that was only suitable for a preserved time period. I wonder how successful a release that was? Now back to the class 60, although it is nice to see some liveries fit for the present day (007 in DB and the previously mentioned 099) what about the original liveries, Construction, Coal and Metals? Whilst I cannot guarantee it, I would be willing to bet a pound that any of the aforementioned liveries would sell very well! I know it is very easy sat here but what about releasing un-named and un-numbered locos in addition? I for one would be very interested in a few of those, well may be not just a few..... I very rarely feel compelled to post on these sort of subjects but today was the day...... Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted September 25, 2012 Share Posted September 25, 2012 ... I was a little shocked when they discontinued the Lyddle End range... Forgot to mention that in what I posted earlier. That probably was the lower cost and thus smaller risk 'toe in the water' of using the fairly new - and clearly fast selling - trend of RTP buildings to see what the market in N looked like. Getting out of it probably says not enough of a market for us to take the investment risk necessary for a complete new range. This is all guesswork, because the manufacturer doesn't reveal their thinking: so all that can be done is to read from their actions. Back in OO. Some of us have been burbling on about this for some time. Hornby have overwhelming UK mind share when the topic of Model Railways or Toy Trains comes up, and the same for their Scalextric brand in slot car. That doubtless has delivered results for them over the past few decades: classically when Grandpa goes off to buy a working toy for first Grandson; he gets a Hornby trainset or Scalextric slot car set. Well he did, but todays grandpa in that position is now about 40, and never had either of these things as a youngster, so now buys the Wee box or crack pipe or whatever it is now that is the equivalent of what he was excited by as a kid. The market landscape has been shifting over the past decade, and the future of train settery is a fast declining one is my guess. So Hornby have to reinvent their model railway activity to focus on the modeller group. They have detectably been doing some of that: the better locos and new coach models are definitely not kid's basic train set fodder. this is where I would expect to see developments if they want to stay in the hunt. There are opportunities: they have the marketing reach to offer a RTR range of better OO track against Peco for example with fully integrated point motors, DCC on board and all that jazz... Link to post Share on other sites More sharing options...
Seanem44 Posted September 25, 2012 Share Posted September 25, 2012 Forgot to mention that in what I posted earlier. That probably was the lower cost and thus smaller risk 'toe in the water' of using the fairly new - and clearly fast selling - trend of RTP buildings to see what the market in N looked like. Getting out of it probably says not enough of a market for us to take the investment risk necessary for a complete new range. This is all guesswork, because the manufacturer doesn't reveal their thinking: so all that can be done is to read from their actions. Back in OO. Some of us have been burbling on about this for some time. Hornby have overwhelming UK mind share when the topic of Model Railways or Toy Trains comes up, and the same for their Scalextric brand in slot car. That doubtless has delivered results for them over the past few decades: classically when Grandpa goes off to buy a working toy for first Grandson; he gets a Hornby trainset or Scalextric slot car set. Well he did, but todays grandpa in that position is now about 40, and never had either of these things as a youngster, so now buys the Wee box or crack pipe or whatever it is now that is the equivalent of what he was excited by as a kid. The market landscape has been shifting over the past decade, and the future of train settery is a fast declining one is my guess. So Hornby have to reinvent their model railway activity to focus on the modeller group. They have detectably been doing some of that: the better locos and new coach models are definitely not kid's basic train set fodder. this is where I would expect to see developments if they want to stay in the hunt. There are opportunities: they have the marketing reach to offer a RTR range of better OO track against Peco for example with fully integrated point motors, DCC on board and all that jazz... As a 30-year-old, I recon there are far fewer of my age in the hobby than 40-year-olds. And even at that, my free time is dedicated to my wife, the Army reserves, and Batlefield 3 on the Xbox 360, which is sadly the only time I can find to hang out with my friends who have moved to other places in the country. Let's face the truth. Model trains are losing out rapidly to Video Games. I used to get a trainset, all ready to go under the Xmas tree when I was a kid. This has been replaced by the Xbox and PS3. Hyper-realistic games are defeating reality. Do I think Hornby and other companies are in danger? No. But they have to recognize these trends and act accordingly in their future planning. Link to post Share on other sites More sharing options...
RMweb Premium finelines Posted September 25, 2012 RMweb Premium Share Posted September 25, 2012 If it is so cheap to make things in China, why are they do expensive to buy? I don't buy into the bowl of rice philosophy, I think the people who make model railways are well trained and have up to date equipment to work with. With the budget in a high priced Hornby coach, given the above, it would be a breeze to make it in the UK. Every time you add another subcontractor to the suply chain you have to pay their profits. Roger Link to post Share on other sites More sharing options...
AJ427 Posted September 25, 2012 Share Posted September 25, 2012 No surprises with the failure of the Olympics stuff. I didn't and would never have bought any of this nor can I imagine anyone who would have. I would however have bought several Gresley Suburban Brake 3rds - but can I get hold of them? No - probably because factory capacity was taken up with the tat. Link to post Share on other sites More sharing options...
cary hill Posted September 25, 2012 Share Posted September 25, 2012 I just hope that the Board at Hornby are capable of producing a Mission Statement which does not involve jumping expensively on every dubious passing bandwagon and which also ensures that there is product to actually sell where there is a demand for it. I know predicting what will sell in the toy and hobby business sector is notoriously difficult to predict with any degree of certainty, but, if Hornby are expert in this field, they have come up well short of what might reasonably have been expected over the last twelve months. Turning a £3.5 million profit into a break-even or a possible loss situation is fairly disasterous for a medium-sized company operating in niche markets and can't be good for cashflow. I just wish they would concentrate on their core products - they keep on saying they are doing this despite frequent evidence to the contrary. Link to post Share on other sites More sharing options...
cnw1995 Posted September 25, 2012 Share Posted September 25, 2012 It's interesting to me that we have some of the same concerns and observations about the 'big' manufacturers and distributors (like Lionel and MTH) n my preferred slice of the American market. Link to post Share on other sites More sharing options...
D605Eagle Posted September 25, 2012 Share Posted September 25, 2012 Perhaps if the announced models appealed to a broader church things might improve in the future. However their production problems must be hurting. I wonder how much money was invested in the B17 that still shows no sign on the horizon of appearing. The way the prices of the B1 have quickly come down also suggests to me that it was a slow mover, which is hardly surprising when you consider how many B1s there were already out there. Not everybody is in the financial position to replace all their existings ones with new ones, many will keep their spare money for a different class that they want and keep their old B1s, and with such a restriced marked as OO gauge, every sale makes a difference. You cannot afford to loose a significant % of sales. Link to post Share on other sites More sharing options...
Glorious NSE Posted September 25, 2012 Share Posted September 25, 2012 I understand the Hornby shop in Westfield Stratford is now closed. We were there on the 16th, and it was open then. Have to say I was much more impressed with the lego shop... Link to post Share on other sites More sharing options...
Miss Prism Posted September 25, 2012 Share Posted September 25, 2012 And to think, the message Hornby was pumping out only a month ago was so rosy. One is reminded of this famous phrase. Link to post Share on other sites More sharing options...
ThaneofFife Posted September 25, 2012 Share Posted September 25, 2012 It will be interesting to see what Hornby have planned for those interested in just over 3 months time when they announce their next catalogue proposals and if these will fall back onto some of the previously announced but quickly curtailed models (rehashed stuff like the Limby ACorp and the weathered Virgin Mk3s) or a handful of high quality all new models. I still dont think the sums would make sense right now to bring production back to the UK even with the rising cost of shipping from half way around the globe. Will this profits warning be a bit of a wake up call for the board up at HQ? They should take a leaf out of other big 3 manufacturers too when it comes to customer information, tooling progress, updates on new models, design stages, EPs images, decorated images etc. all helps to whet the modellers appetite and keep people interested in the brand. I keep reading how many feel Hornby are just not listening to them. Sooner or later youre old tooling will run its course so unless youve made hay when the sun was shining youll have no business left if you rest on your laurels. So frustrating when you consider that there is so much Hornby could do - at least from my armchair thats how it seems. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted September 25, 2012 RMweb Gold Share Posted September 25, 2012 And to think, the message Hornby was pumping out only a month ago was so rosy. One is reminded of this famous phrase. A message very definitely piled up by that lady over Hornby's Olympics franchise - here she was on another Olympics (self-)promotion trip http://www.sportspromedia.com/quick_fire_questions/alex_balzaretti_-_olympic_dreams/ An interesting thing mentioned in there is that she was in Corgi's previous set-up dealing with 'buses, you know - the things that crowd retailers' shelves here, there, & everywhere or appear being knocked out at low prices on websites or stalls at steam rallies etc. And the fact that she was absolutely convinced they'd be selling 500,000 London 'buses whereas in the first clip she says they sold 350,000 - 30% out is likely to have hit both cash flow and profit margins so the announcement becomes even less surprising. I wonder what she'll be doing next - apart from possibly popping into a Job Centre as surely Hornby can't be intending to hang on to folk who keep on getting it wrong? Link to post Share on other sites More sharing options...
mow Posted September 25, 2012 Share Posted September 25, 2012 How many more profits warnings will it take before some of the board resign or are forced out? The excuses over the supply chain have reappeared, the Olympic souvenirs have not added to profits, the firm went on a buying spree, taking over other concerns which had run into difficulties. Link to post Share on other sites More sharing options...
cary hill Posted September 25, 2012 Share Posted September 25, 2012 And to think, the message Hornby was pumping out only a month ago was so rosy. One is reminded of this famous phrase. Taxi for Ms.Balzaretti ? Assuming Hornby haven't shifted them all yet Link to post Share on other sites More sharing options...
RMweb Gold Barry Ten Posted September 25, 2012 RMweb Gold Share Posted September 25, 2012 I'm not one to jump on the bandwagon of Hornby knocking ... oh, what the hell, why not? I returned to plastic kit making a few years ago, since when I've bought and built models by Revell, Trumpeter, Tamiya and Hasegawa. Each one did exactly what you wanted it do, it went together with minimum fuss and felt like good value for money - even the really old Revell mouldings. The one Airfix kit I've bought since then (the 1/72nd Sea King) was a real dog of a model with atrociously fitting parts, instructions which didn't resemble the components ... a shocker, in other words, and one which it'll take quite a bit of modelling skill to put right. Now, having read the model press, I know that the newer Airfix releases are extremely well regarded, but why confuse the market by putting out such old tat? Even worse, why put it out in a colourful box, with paints and glue, explicitly aimed at newcomers to the hobby? If I was a kid, with this one experience of an Airfix product, I wouldn't go near another one with a barge pole. For the sake of balance, though, Hornby's recent 4mm stuff is lovely. Link to post Share on other sites More sharing options...
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