Hornby's Nat Southworth responds to RMweb members' Q&A.

[JSpencer]

Hi JSpencer

I agree with what you said regarding the big boy loco but I think if Hornby were to make their own version that its possible the cost may be in line with the locos currently in the range now.

Rivarossi locos were often in excess of the £200+ region thus putting them beyond the budget of a lot of modellers ( myself included ) but since the introduction within the last few years of the railroad range locos are now becoming more available to modellers on a low or limited budget.

Sometimes Rivarossi locos can be picked up at swap meets for under £150, sometimes less if the loco needs attention.

I picked up a mallett 2-8-8-2 loco at a swap meet for £35, purely because it needed attention to its drive system. If the repairs had not been required the loco probably would have been on sale for at least £80 - £90. Even now it still needs a few minor things doing on it but they can be sorted in due course.

It would effectively be a HO railroad range that you propose (which would fit under the Lima banner very well!). A OO gauge big boy would not fit on our layouts. £200 sounds like a minimum for such a model. In any case it does really belong to the UK OO range that this discussion touches upon.

However the point about cost is a fair and to Hornby's merit they have a real focus on a high low mix for all.

[TheSignalEngineer]

It s comical how Andy's remark about big and black suddenly turned peoples thoughts to a UP 'Big Boy'. You c a n n o t  be serious......I mean, where are you guys coming from?

 

 

 

HAVE YOU NEVER HEARD OF AN AUSTIN SEVEN....?   

Or a Claughton.

[The Stationmaster]

Maybe a dirty big black 'un in there. My crystal balls can't see little shiny green 'uns though.

Oh dear, can't be helped

 

PS so it's either a Q6, a B16 or an Austin Seven by my reckoning and notwithstanding past rumours I think Hornby might well have plumped for the middle one  (oops, forgot the Suffern - so maybe a something or other 15 then).

[coachmann]

Or a Claughton.

 

Claughtons were always red, well the big boiler ones anyway. What time is the 17th December announcement, as I don't want to crawl out of bed before nine and find there are more pages than the Loony thread to wade through....

[TheSignalEngineer]

Claughtons were always red, well the big boiler ones anyway. 

After the Midland spoilt the look of them. 

[wombatofludham]

Oh so the big announcement tomorrow is Hornby's venture into the North American market with a Union Pacific "Big Boy".

 

Better have the Samaritans on speed dial then for all those hoping for an original Merchant Navy in whichever version no-one could agree on...

 

 

For the avoidance of doubt I was actually joking.  Seriously people, get a grip.  I mean Hornby doing anything American...they can't get their British stock into the shops.

Anyway, the big black announcement Andy was teasing us about is E2001.

[Ozexpatriate]

Duty to shareholders is a complete myth. There is no legal basis for it. 

Nevertheless it is exactly how all listed companies have operated since the stock market was invented.

 

Executives who don't make the shareholders their number one priority are replaced at the next board meeting.

[teaky]

Claughtons were always red, well the big boiler ones anyway. What time is the 17th December announcement, as I don't want to crawl out of bed before nine and find there are more pages than the Loony thread to wade through....

See the big bright red and yellow banner at the top of this forum Larry. 

 

(Noon today.)

[Bernard Lamb]

Big?

Black?

P1?

Bernard

[Grovenor]

Executives who don't make the shareholders their number one priority are replaced at the next board meeting.

You gotta be kidding, have you forgotten 2008 already!

Keith

[Ian Hargrave]

Need any of the above really concern us ? I remind you of the immortal words of Rhett Butler to Scarlett O'Hara...." Frankly,my dear...........I don't give a damn ". All I require as a customer of several years standing is for Hornby to deliver the goods in working order,in one piece and on time. Boardroom intrigue and shareholder shenanigans are for the armchair pundits . I do not regard myself as a member of that charmed circle. I enjoy models and modelling.

[Mike Storey]

Duty to shareholders is a complete myth. There is no legal basis for it. 

 

Sorry, but that is wrong, as many of you seem to be assuming. Under the Companies Act 2006, all Directors of a limited company have a fiduciary duty to act in the best interests of the company's members, which means shareholders, in the management of the shareholders' company and the shareholders' money. But the act also states duties to act in the interests of a number of other areas, including employees, so there can often be conflict between what the directors consider to be the overall best interests of the company, and what the shareholders think is in their best interests (often a long term v a short term interest). The directors have the power to act "independently" on day to day operation but ultimately the shareholders have the power to determine the extent of their responsibilities (other than their legal individual responsibilities as directors), the extent of the company's operation and interests (the Articles of Association) and to fire them. So if you have a weak or incompetent Board of Directors, then the shareholders's interests can easily hold sway.

[Foulounoux]

Perhaps I need to explain my duty to shareholders comment

 

Anyone who works for a publicly listed company will be aware that shareholders and share value is what unfortunately drives decisions

 

It may mean wrong decisions are made because short term share price issues drive behaviour

 

I speak as someone whose April 1st pay rise (merit based not a given) will be delayed 3 months in order to help increase share value

Annoyingly as a successful site we get hit just the same as unsuccessful sites

 

 

So whether we think it's right or not shareholders and more specifically share value and dividends do become the no 1 driver of many organisations

[JSpencer]

Perhaps I need to explain my duty to shareholders comment

Anyone who works for a publicly listed company will be aware that shareholders and share value is what unfortunately drives decisions

It may mean wrong decisions are made because short term share price issues drive behaviour

I speak as someone whose April 1st pay rise (merit based not a given) will be delayed 3 months in order to help increase share value

Annoyingly as a successful site we get hit just the same as unsuccessful sites

So whether we think it's right or not shareholders and more specifically share value and dividends do become the no 1 driver of many organisations

As a PLC, Hornby are small fry in a market that is hardly going to be going through a rapid expansion. As such, share value is only likely to shoot up if someone actually wanted to buy the entire company. That will only happen if it looks viable, so they need prove they can recruit and keep customers.

Short term profits from selling t shirts and chocolate machines want convince anyone.

 

As a shareholder you would have to look at this as long term, waiting for when that buy out happens or trains suddenly becoming a fashion item that everyone must have.

[ruggedpeak]

As a PLC, Hornby are small fry in a market that is hardly going to be going through a rapid expansion. As such, share value is only likely to shoot up if someone actually wanted to buy the entire company. That will only happen if it looks viable, so they need prove they can recruit and keep customers.

Short term profits from selling t shirts and chocolate machines want convince anyone.

 

As a shareholder you would have to look at this as long term, waiting for when that buy out happens or trains suddenly becoming a fashion item that everyone must have.

100% - the daily trade in their shares is tiny (although there was a big trade in about 95k shares the other day), but even today after a big announcement the volume traded and price change was minimal, although the chances of City traders understanding the implications of an impending release of an S15 are non-existent (after all it appears most can't even count!). That said the City are more interested in actual results rather than speculative announcements - the post Xmas figures will be looked at in more detail.

 

http://www.Hornby.plc.uk/

 

Obviously if we can get Apple to show an interest in iTrains then I'll be millionaire, Rodney!

[Foulounoux]

If only all shareholders looked at the long term

[robmcg]

Back to the minutae of Hornby deliveries, they say their Spamcan 'Winston Churchill' is due for release on 1/1/2015 and yet we were told there would be no more SK production.

 

I would have liked Nat's answers better if he had said something along the lines of 'we have enough from SK to market some limited editions' , or 'we have successfully moved the tooling for several popular models to new factories and can now promise reliable delivery'.

[Andy Hayter]

It is of course possible that the new models will not be SK production.

[The Stationmaster]

It is of course possible that the new models will not be SK production.

Exactly so.  Kader (SK) have reputedly not manufactured anything for Hornby since around April so plenty of time to get the tooling up & running elsewhere and, by implication, the models into the warehouse by now.  In fact it seems an interesting approach which Hornby has adopted of having some new models in, or coming into, the warehouse at the time of their December announcement - might leave some folk muttering about what they haven't received in the past year but counter balanced by those who get something which is literally 'brand new' and hot off the press which can lead to some positive frothing.

[jjb1970]

Given the generally negative response to Hornby management in this thread I think it is worth stepping back and recognising that there has been a significant improvement in things at Hornby over the last year.

 

They are delivering models, OK there are still a lot of issues but we are seeing new stock emerging from the pipeline.

 

Their new tooling has bounced from the cost cutting driven efforts of their design clever period. They seem to be getting a much better grasp of controlling costs whilst hiding those cuts on the finished model.

 

They have announced a very ambitious program for 2015, there has been a lot of accusations of copy cat this and copy cat that but even with the duplications there are quite a few excellent new releases planned which are not duplicated.

 

Does this mean their problems are over? Not at all, the recent debacle over Exeter was largely self inflicted by poor handling and communications. Whilst deliveries have improved there is still much to do and there are still plenty of releases we're waiting for and continued slippage. Their corporate communications still need work with the honourable exception of SK's wonderful blg. However compare the situation with a year ago when there were plenty of people confidently predicting that Hornby were finished and a busted flush and it is a big improvement. They still have a lot to do but the trend has changed from being downwards to being on an improvement trajectory. We can say they should have gotten things onto such a track three or four years ago but be that as it may things do seem to be improving now.

 

Or to put is succintly, the Hornby management do not strike me as being quite as clueless as has been suggested by some.

[Mike Storey]

As a PLC, Hornby are small fry in a market that is hardly going to be going through a rapid expansion. As such, share value is only likely to shoot up if someone actually wanted to buy the entire company. That will only happen if it looks viable, so they need prove they can recruit and keep customers.

Short term profits from selling t shirts and chocolate machines want convince anyone.

 

As a shareholder you would have to look at this as long term, waiting for when that buy out happens or trains suddenly becoming a fashion item that everyone must have.

 

.....or if you are about to sell off some valuable real estate. i.e. Margate.

[Matabiau]

.....or if you are about to sell off some valuable real estate. i.e. Margate.

That would explain why their internet site isn't working and their phone lines are down at the moment!

[Budgie]

If only all shareholders looked at the long term

The government could help in this respect by legislating (tax all share sales on a sliding scale depending on how long you have held them, on a last in/first out basis; tax all dividends over a certain percentage of the market value of the company at a higher rate; etc.)

[Ozexpatriate]

As a PLC, Hornby are small fry in a market that is hardly going to be going through a rapid expansion. As such, share value is only likely to shoot up if someone actually wanted to buy the entire company. That will only happen if it looks viable, so they need prove they can recruit and keep customers.

Short term profits from selling t shirts and chocolate machines want convince anyone.

 

As a shareholder you would have to look at this as long term, waiting for when that buy out happens or trains suddenly becoming a fashion item that everyone must have.

For Hornby's shareholders it's not all about share price, though this is obviously important. When they are profitable, Hornby pay a half-yearly dividend to shareholders - this is likely the reason that many recent investors have purchased shares in Hornby and these are the kind of shareholders who probably hold onto their shares for a a long term.  The short-term 'growth market' guys would have exited some years ago when Hornby's meteoric growth stalled.

 

Hornby has not paid a dividend in some time. If I recall correctly, in recent years their burn rate of cash to support expensive model development plans (amongst other business expenses) exceeded their banking covenants at least once. They really do need to return to profitability.

 

To do this they need to produce products with the quality we expect in the volumes we will purchase. It's apparently a lot easier said than done.

[robmcg]

Given the generally negative response to Hornby management in this thread I think it is worth stepping back and recognising that there has been a significant improvement in things at Hornby over the last year.

 

They are delivering models, OK there are still a lot of issues but we are seeing new stock emerging from the pipeline.

 

Their new tooling has bounced from the cost cutting driven efforts of their design clever period. They seem to be getting a much better grasp of controlling costs whilst hiding those cuts on the finished model.

 

They have announced a very ambitious program for 2015, there has been a lot of accusations of copy cat this and copy cat that but even with the duplications there are quite a few excellent new releases planned which are not duplicated.

 

Does this mean their problems are over? Not at all, the recent debacle over Exeter was largely self inflicted by poor handling and communications. Whilst deliveries have improved there is still much to do and there are still plenty of releases we're waiting for and continued slippage. Their corporate communications still need work with the honourable exception of SK's wonderful blg. However compare the situation with a year ago when there were plenty of people confidently predicting that Hornby were finished and a busted flush and it is a big improvement. They still have a lot to do but the trend has changed from being downwards to being on an improvement trajectory. We can say they should have gotten things onto such a track three or four years ago but be that as it may things do seem to be improving now.

 

Or to put is succintly, the Hornby management do not strike me as being quite as clueless as has been suggested by some.

Excellent points, and one-off re-structuring benefits and land sales ought to reduce debt, and better product quality and delivery can only be good, obviously the long term profitability of production with efficient delivery systems and management, it all looks rather promising to me.