Hornby autumn profit alert

[Guest dilbert]

At the next AGM - there's likely to be some shareholder fireworks...

 

But why so much doom & gloom,? How many times has the Hornby/Tri-ang/Dublo brand changed ownership ? Three, four times? And yet the marque still produces some very good stuff...

 

I believe that Hornby Hobbies do need to diversify, they haven't yet found the right model to cope with different markets & seasons. If the current set-up can't fix the problem, then outside interests will step in to help out, and stock market activity will support this.

 

Isn't the interim FY report due out in Nov. '12? No doubt some of the numbers to be published will make interesting reading... in the meantime, I don't know whether the outstanding items I have on order will be delivered to schedule - the retail channels that depend on this will certainly have a different viewpoint... dilbert

[rob D2]

Well, the thing that shocked me about the Olympics stuff was how "cr@p" it was. The velodrome featured flat 2D bikes - rubbish !

 

Hornby are rapidly becoming jack of all trades, master of none . If Bachmann weighed in with a decent 31/60 I'd never have to buy their stuff again.

[Glorious NSE]

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

 

Moving 350,000 is a pretty great achievement.....unless you made 500,000 of them.

[Electrostar]

How are the Hornby International brands fairing? If factories were to head to back to Europe I'd suggest Spain might be an even cheaper option than Britain. You'd think international brands would also widen the scope for investment into N guage, the continent I believe traditionally being more receptive to smaller modelling.

 

Interesting to hear Lego mentioned. Here's a brand that successfully tied in with film franchises, then went on to launch games based on the Lego characters of said franchises, and still had time for its traditional bricks and mortar. Hornby have tried many times to move away from its core but always ends up unstuck.

 

I'm surprised they haven't launched a fun smartphone gaming app, featuring famous locos, Routemaster buses, Airfix planes that you construct or Scalextrics. Something that gets there brand out there into the public realm and draws potential customers back with nostalgia.

[phil-b259]

 

Interesting to hear Lego mentioned. Here's a brand that successfully tied in with film franchises, then went on to launch games based on the Lego characters of said franchises, and still had time for its traditional bricks and mortar. Hornby have tried many times to move away from its core but always ends up unstuck.

 

 

The lego group themselves had a spell a few years ago where they got very close to being in trouble. Again it was said that they took their eye off their core products in favour of various tie-ins - not helped of course by the patents for the way lego bricks 'stick' together expiring after the 50 years were up leading to loads of cheep (and lego compatable) copies coming out from China, etc. Interestingly one of the ways they got things back on track was outsourcing the production of lego bricks to.....Asia, production in Eurpoe was just too expensive. Like Hornby though their HQ is still in their 'home' country of Denmark though

[Seanem44]

How are the Hornby International brands fairing? If factories were to head to back to Europe I'd suggest Spain might be an even cheaper option than Britain. You'd think international brands would also widen the scope for investment into N guage, the continent I believe traditionally being more receptive to smaller modelling.

 

Interesting to hear Lego mentioned. Here's a brand that successfully tied in with film franchises, then went on to launch games based on the Lego characters of said franchises, and still had time for its traditional bricks and mortar. Hornby have tried many times to move away from its core but always ends up unstuck.

 

I'm surprised they haven't launched a fun smartphone gaming app, featuring famous locos, Routemaster buses, Airfix planes that you construct or Scalextrics. Something that gets there brand out there into the public realm and draws potential customers back with nostalgia.

 

The problem is that Lego appeals to a much broader base. Every kid in any country you can imagine and that can legally sell them. That's a lot different then trains, which are (for Hornby) geographically limited to Europe. Not to mention that model railroading (and to a lesser extent) slot cars are a limited hobby to begin with dealing with a much smaller market.

[andyman7]

'Hmm', I thought as I read the story on Hornby's (non-)profit forecast, 'that'll bring the knives out on RMWeb'...and sure enough there's been a lot of comment about 'if they hadn't done all that Olympic tat and instead made a finescale SECR Birdcage they'd be raking in millions'; having said that there's been some reasonable comments. For those with short memories, Hornby have not suddenly taken a tumble from a stellar historic performance; anyone with a knowledge of they (and their predecessors') trading history going back 60 years will know that they operate in a very volatile environment. In the 1990s everyone expected them to disappear into another company as a takepver target; instead, they reinvented themselves, grew rapidly and actually managed to take over a slew of struggling european manufacturers.

They've backed the wrong horse with the Olympics, but that's business. One poster above has complained about still releasing old tooling in the Airfix range but their invesment in that range has been fantastic and they are soldily working their way through many outdated tools and replacing them with excellent new versions. The Scalextric range is solid and innovative. They have an excellent new range of Corgi toy models at pocket money prices which deserve to succeed.

That leaves the mixed bag of their UK model railway range. It really is a bit of a curate's egg these days - good in parts, but uneven; the Railroad range is excellent value in most but not all cases (e.g. 9F ; ex-Lima Warship ). There does seem to be a basic lack of focus on what will sell (e.g. Intercity livery Mk3 SOs on ebay at £60 plus, but shelves crammed with GC and XC liveried ones, plus the whole Mk2d debacle). However, it wouldn't take a lot of work to sort it out, with a bit of careful research coupled with an absolutely honest approach about what is a Railroad model, and what isn't. As regards manufacturing in the UK, when Bachmann start moving production to Europe then we'll know the game's up for China, but until then I'm pretty certain that if it made sense to make stuff here, then they would do so.

[Seanem44]

So I am here at work reading this thread. The funny thing is, when I vacationed in England this past May, I bought a small London 2012 Olympic Black Taxi from a gas station driving out of the city one day, which now resides by my office desk. I put two and two together, picked it up just now and sure enough, Corgi, a Hornby product. If I recall, there were tons of this product in that gas station. Neat thing for the random American tourist, but not probably going to sell well to the locals.

[robertcwp]

Please correct me if I'm wrong but isn't a key difference between Hornby and Bachmann that Bachmann's manufacturing is done in-house within the Kader Group (of which Bachmann UK is part) whereas Hornby rely on suppliers outside their group to make their products?

 

I have long felt that Hornby don't quite get their market whereas Bachmann do. The Kader group makes many things but Bachmann UK have a clear market position and largely stick to catering for their core market. Hornby try to be too many things to too many people for their size and don't understand their market as well as Bachmann. Take livery variations - when Bachmann do a model, they usually do it in the main livery variants pretty quickly (though there have been exceptions - we've only just seen a green 2-car 108 with yellow panels). With Hornby, we waited several years from first release before they did a Black 5 in BR lined black with late emblem.

 

We have only seen one batch of BR green 31s with yellow panels though another has been promised, and I'm sure there is unsatisfied demand there.

 

Still the only BR green low-window Maunsell stock that I can think of was the S&D pack - yet there were several runs of high-window stock in BR green. For SR olive green the reverse has been true. And still no crimson/cream low-window Maunsell stock so far as I can recall (I'd like an S&D set in that livery).

 

I think Hornby have been too focused on glamour models and on rehasing old models. Not many people will have bought more than one Brighton Belle (I don't have one) - even then Hornby didn't do a BR-era umber & cream one, which might well have sold best of all variants of that model. Contrast the humble Bachmann Derby Class 108, of which I have 10 so far (plus 5 Cravens so far and 4 Lightweights so far). OK, I know Bachmann are doing a Blue Pullman - I reckon that will outsell the Hornby Brighton Belle and if Bachmann do the jumper cables version in the later liveries I reckon they will more than double their sales as some people won't be able to resist a 12-car formation - and I have a fiddleyard line long enough for one... The Hornby ex-Lima Met-Cam unit looks seriously inferior to Bachmann's DMUs and a state-of-the-art Met Cam is on the way from Bachmann anyway.

 

If Hornby had done their 08 in the liveries I wanted a bit sooner (or at all) I would have bought them instead of more Bachmann ones - I'd rather have a reasonable model in the livery I want than not have one at all.

 

Hornby did two batches of BR green Granges with the same tender, but no other variants in that livery in spite of tooling up the other two tenders and twice listing the model in BR green with a different tender then cancelling it. I gave up waiting and both my Granges have 4,000 gallon tenders.

 

Hornby's products are quite simply overpriced too compared to Bachmann's. For me, the most extreme example of Hornby over pricing was the blue/grey Gresley buffet - an inaccurate model too. The Bachmann B1 with new chassis might not be up to Hornby standard but it will be plenty good enough for many modellers and cost less too.

 

Hornby can get it right too - their Hawksworth stock springs to mind. All the main types in both the main liveries, and available at around £30 per coach, which for the standard of model is not bad at all.

[Guest dubdee1000]

Taxi for Ms.Balzaretti ? Assuming Hornby haven't shifted them all yet

 

One of the unfortunate things of having a distinctive surname, is that its easy to find you on the internet. Lets put aside Ms Balzaretti's experience at MV Sports who 'put a logo on things' and look at her twitter feed. Those looking for reshuffles from Margate could find a couple of interesting posts on 13th and 21st September.

 

twitter.com/ladybalz

[trisonic]

 

For the sake of balance, though, Hornby's recent 4mm stuff is lovely.

 

Love the L1!

The other company is far from perfect too.

 

Best, pete.

[robertcwp]

Love the L1!

The other company is far from perfect too.

 

Best, pete.

Yes - I was so pleased with my L1 that I bought a second one even though they are really the wrong region for me (my excuse is some ran on the GW&GC Joint). When Hornby are good, they are very good (Gresley suburbans being another outstanding example). They don't get everything right though - the 4-Vep was disappointing in my view.

[D605Eagle]

Love the L1!

The other company is far from perfect too.

 

Best, pete.

Jekyll and Hyde. The L1 is a very, very good model no matter if you like it or not. The VEP on the other hand is a [deleted]. This seems to be the problem with Hornby, they have far too many poor models littered amongst the gems. They really need to weed them out and keep up a clear consistancy of models. A regular look at ebay would help them identify which of their existing models there is a ready market for.

[Guest dilbert]

Please correct me if I'm wrong but isn't a key difference between Hornby and Bachmann that Bachmann's manufacturing is done in-house within the Kader Group (of which Bachmann UK is part) whereas Hornby rely on suppliers outside their group to make their products?

 

It's a difference but is it key? Sanda Kan was taken over by Kader, that should have made no difference concerning existing contractual agreements...

 

 

I have long felt that Hornby don't quite get their market whereas Bachmann do. The Kader group makes many things but Bachmann UK have a clear market position and largely stick to catering for their core market. Hornby try to be too many things to too many people for their size and don't understand their market as well as Bachmann. Take livery variations - when Bachmann do a model, they usually do it in the main livery variants pretty quickly (though there have been exceptions - we've only just seen a green 2-car 108 with yellow panels). With Hornby, we waited several years from first release before they did a Black 5 in BR lined black with late emblem.

 

We have only seen one batch of BR green 31s with yellow panels though another has been promised, and I'm sure there is unsatisfied demand there.

 

Still the only BR green low-window Maunsell stock that I can think of was the S&D pack - yet there were several runs of high-window stock in BR green. For SR olive green the reverse has been true. And still no crimson/cream low-window Maunsell stock so far as I can recall (I'd like an S&D set in that livery).

 

I think Hornby have been too focused on glamour models and on rehasing old models. Not many people will have bought more than one Brighton Belle (I don't have one) - even then Hornby didn't do a BR-era umber & cream one, which might well have sold best of all variants of that model. Contrast the humble Bachmann Derby Class 108, of which I have 10 so far (plus 5 Cravens so far and 4 Lightweights so far). OK, I know Bachmann are doing a Blue Pullman - I reckon that will outsell the Hornby Brighton Belle and if Bachmann do the jumper cables version in the later liveries I reckon they will more than double their sales as some people won't be able to resist a 12-car formation - and I have a fiddleyard line long enough for one... The Hornby ex-Lima Met-Cam unit looks seriously inferior to Bachmann's DMUs and a state-of-the-art Met Cam is on the way from Bachmann anyway.

 

If Hornby had done their 08 in the liveries I wanted a bit sooner (or at all) I would have bought them instead of more Bachmann ones - I'd rather have a reasonable model in the livery I want than not have one at all.

 

Hornby did two batches of BR green Granges with the same tender, but no other variants in that livery in spite of tooling up the other two tenders and twice listing the model in BR green with a different tender then cancelling it. I gave up waiting and both my Granges have 4,000 gallon tenders.

 

Hornby's products are quite simply overpriced too compared to Bachmann's. For me, the most extreme example of Hornby over pricing was the blue/grey Gresley buffet - an inaccurate model too. The Bachmann B1 with new chassis might not be up to Hornby standard but it will be plenty good enough for many modellers and cost less too.

 

Hornby can get it right too - their Hawksworth stock springs to mind. All the main types in both the main liveries, and available at around £30 per coach, which for the standard of model is not bad at all.

 

The choice of subjects/liveries is the major difference in the model railway hobby - Bachmann seem more attuned marketing-wise in the segment that is of interest to people on this forum - but Hornby have produced several excellent models over the last six or seven years... the only weakness in in their freight range - loco and coaching stock is on a par with the competition (and also better, given the model)... dilbert

[blueeighties]

Just read through this thread, makes interesting reading. Probably explains why the re-release of the original HAA coal hopper has now been re-scheduled four times. Beginning to wonder if my 56's will ever see them....

 

Regards,

 

Lee.

[darren01]

Hi

Hornby need to stick to their core market and not keep jumping all over the shop with products as they keep doing.

If they do not work on the core items then I fear they will loss out to other manufactures, who are sticking to their guns on what they are bring out.

Hornby should drop the tat and do what they do best, make good models.

But I do not see this happening any time soon, the other thing with Hornby is why they do such short runs on their railway stuff.

A few month ago MR did an article on using Hornby maunsell coaches in the range to make sets up, they only thing was half of the coaches where discontinued!

I just don’t get what Hornby are doing, other than losing their core market.

Out of all the loco’s I have brought over the last few years, Bachmann have got about 90% of my cash.

So it is no wonder Hornby are having a hard time, if only they would stick to what they do best.

Darren

 

[trisonic]

Bachmann's impact in the USA is minimal. In HO their steam engine models are admired but their diesels (the bulk of the market) are not. On30 is a niche market here which Bachmann seem to have cornered. Have Hornby given up on the USA? They have no "N Gauge" either?

Hornby are probably spread over several manufacturers which is like EMI before they built their own CD plants - not matter what the manufacturer says their own products get priority when push comes to shove. I'm not suggesting Hornby start their own but they would be better off being the biggest purchaser at the plants they do utilize.

 

Best, Pete.

[Bernard Lamb]

If i was a senior buyer at one of the major retail outlets I would be very wary of getting involved if Hornby offered me the next big thing.

Their performance over the Olympics must have made a big dent in the credibility of their marketing strategy.

Watch out for the final clear out come March.

Bernard

[phil gollin]

 

...............I have long felt that Hornby don't quite get their market whereas Bachmann do. ............

 

............. Still the only BR green low-window Maunsell stock that I can think of was the S&D pack - yet there were several runs of high-window stock in BR green. For SR olive green the reverse has been true. And still no crimson/cream low-window Maunsell stock so far as I can recall (I'd like an S&D set in that livery). ..................

 

 

Yes, and, for instance, only two versions of the T9 with late BR Crest (one not even released yet).

 

I am getting concerned that the moulds will be rested before a decent variety of Southern Region coaches and T9s will be produced.

 

.

[mikeharvey22]

Have Hornby given up on the USA? They have no "N Gauge" either?

 

Best, Pete.

 

Hornby do have an N gauge range and the N gauge Arnold range includes both European and US items. The European range has been extended under Hornby ownership with new locomotives, multiple units, coaching stock and freight wagons. I am very pleased with the modern single car SNCF diesel unit of which I have two in daily operation.

 

Mike

[The Stationmaster]

Hi

Hornby need to stick to their core market and not keep jumping all over the shop with products as they keep doing.

If they do not work on the core items then I fear they will loss out to other manufactures, who are sticking to their guns on what they are bring out.

Hornby should drop the tat and do what they do best, make good models.

But I do not see this happening any time soon, the other thing with Hornby is why they do such short runs on their railway stuff.

A few month ago MR did an article on using Hornby maunsell coaches in the range to make sets up, they only thing was half of the coaches where discontinued!

I just don’t get what Hornby are doing, other than losing their core market.

Out of all the loco’s I have brought over the last few years, Bachmann have got about 90% of my cash.

So it is no wonder Hornby are having a hard time, if only they would stick to what they do best.

Darren

 

It's all too easy for us to think of Hornby from our - railway modelling - angle and to overlook the much wider nature of Hornby Group. We can of course each readily identify what is wrong with Hornby from that viewpoint and the common threads of overpricing new issues of ancient models, not listening to the market about livery changes and so on will always come through.

 

But what we are overlooking in these responses is identifying where the Group's problems lie. If Hornby was just a model railway manufacturer operating solely in the UK market we would be right on the ball but they have expanded and diversified way beyond that. And if they had remained solely as that model railway/Scalextric maker would we be able to talk about them in the present tense? Businesses reach a critical point as they grow and they either have to expand and diversify or stay at a plateau - and nowadays there is plenty of evidence that in the model railway business that is not a particularly safe plateau to be sat on.

 

Model railways can perhaps - with the right marketing and pricing policies - make a pretty good positive contribution to Hornby Group's situation but I doubt they can save it unless the company is drastically restructured and rationalised, which would probably then leave it even more open to takeover. Equally we can maybe identify other things which have been wrong with the company's overall approach over the past year or two and we can certainly do so in hindsight (although many on here predicted some of it fairly accurately). But whatever we might think about the railway parts of Hornby's empire they would seem to have far bigger problems elsewhere due to even worse marketing and product development ideas - so maybe, after all, what is happening on the railway side is yet another symptom of their overall situation.

[brushman47544]

I've become more and more frustrated by the choices of livery and tooling options offered by Hornby each year when the new catalogue comes out, but I always seem to end up buying something because some of the models at the top end of the range are very good and as long as they do not become too overpriced compared to their competitors (Bachmann, Dapol, Heljan in my case) I'll continue to buy them. As a BR(SR) modeler I particularly appreciate Hornby's coach packs, with correctly numbered coaches in 3 or 4 coach rakes available together - this is one area where I think Bachmann could take a leaf out of Hornby's book.

 

What I won't buy, however, is regurgitated Lima stuff or Hornby's own 1960s, 70s and most 80s tooling that should have been consigned to the dustbin by now. That stuff may, well some of it anyway, have a role in the Railroad range at prices to match, but not if it means all new versions using new tooling don't get made. From the model railways perspective (as opposed to the Hornby Group as a whole), this is where I think Hornby's strategy has gone wrong and has cost them in terms of sales and revenue. The two ranges (standard and Railroad) should be much clearer in terms of what models belong in each range and they should be marketed separately and not be sold together - who really wants a train set or pack with a superb looking newly tooled loco hauling 1960s tooled Mk1s or wagons?

 

Overall, however, I would not be surprised if sales of model railways was holding up better than Hornby's other brands more affected by the Olympics fiasco, most of which I saw were branded as Corgi.

[Physicsman]

Some good points in post 73, Mike. Regarding the Hornby "empire" as a whole, if I was a shareholder - with the prospect of no profit and a reduced dividend - I'd be happy to see the group re-organised, going back to its core business. But....

 

Previous comments have focussed on some of the excellent stuff still produced across the group, including the newer Airfix and Corgi. If that's possible then surely it's primarily a management issue and heads have got to roll. Again, if I was a shareholder, I'd be wanting to see this happen.

 

The Hornby name is iconic: this is both an advantage and disadvantage. Clearly, management have thought (for too long) that simply badging a product with the Hornby name will guarantee a sale. As has been pointed out, if the company doesn't get up-to-speed, the brand name could become one of "yesterday's men" as its products continue to be by-passed at the younger end of the market.

 

I'm not a great Hornby fan - most of my locos and rolling stock are Bachmann. But in the interests of the marketplace and future developments, healthy competition is essential and Hornby needs to be around to be part of this competition.

 

I probably haven't added anything new here, but felt the urge to "ramble"!!

 

Jeff

[dave flint]

Moving 350,000 is a pretty great achievement.....unless you made 500,000 of them.

 

I don't wish to make this a personal attack on Ms Balz, but look at what she actually said...."By the time the contract expires for London 2012 Hornby will have sold in excess of 350,000 pieces of product in the London Bus shape"

 

Yeuch - just shows the fact it was a cynical money making scheme. Dapol Dave would never refer to hs product range with such a horrible bit of manglemant-speak

 

Anyway, looking forward to the new Dapol N guage product in the class 142 shape

[Andy Y]

It is worded as such because there were multiple products in the shape of a London bus of which they sold 350,000 pieces altogether.