mow Posted April 24, 2012 Share Posted April 24, 2012 A brief report in The Independent mentions another profit warning from Hornby. http://www.independent.co.uk/news/business/news/hornbys-second-profit-warning-of-2012-7670622.html Link to post Share on other sites More sharing options...
RMweb Gold Metr0Land Posted April 24, 2012 RMweb Gold Share Posted April 24, 2012 Must be some kind of record? Albeit only a short article but no mention of gravy train, off the rails, or hitting the buffers. Link to post Share on other sites More sharing options...
mow Posted April 24, 2012 Author Share Posted April 24, 2012 http://online.hemscottir.com/ir/hrn/ir.jsp?page=news-item&item=971107138083090 "The Board expects to report underlying pre-tax profits for the period, subject to audit, of not less than £4.5 million. Following the January update, trading in the final quarter of the financial year to 31 March 2012 has remained muted. The backdrop of a challenging retail sector in the UK remains, but the Company has increased its distribution coverage significantly as a result of products relating to the London 2012 Games. The Group's international business traded strongly and made a positive contribution." So far press coverage appears to reiterate the content of the statement. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted April 24, 2012 RMweb Gold Share Posted April 24, 2012 Usually press coverage does little more than regurgitate the company's handouts on this sort of statement. Most journos lack the knowledge to be able to add anything more and of course there is really nothing more in the public domain than what the company has said. Basically I don't think it's too bad a result overall in present market circumstances but it will be interesting to see some meat on the bare bones of that statement. Link to post Share on other sites More sharing options...
JeremyC Posted April 24, 2012 Share Posted April 24, 2012 ........ Most journos lack the knowledge to be able to add anything more ........ Doesn't usually stop them! Jeremy Link to post Share on other sites More sharing options...
Western Scottish Posted April 24, 2012 Share Posted April 24, 2012 The "challenging retail sector in the UK" probably explains the postponement of some of the high price ticket steam locos earlier this month. Maybe Hornby are diverting resources to the better performing International division. Don't lose sight of the fact that they are still expected to make £4.5m - not bad in present circumstances where many companies are posting losses! Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted April 24, 2012 Share Posted April 24, 2012 That was my reaction too. In profit is basically a green light. There may of course need to be actions taken if the Profit to Revenue and/or Return on Assets ratios are trending down. A typical response is to raise prices if there is perceived to be some 'price elasticity' on the part of the customer for the product. Clever devils to be bringing out really high grade coaches which would be double, triple, quadruple, the Hornby RRP to obtain from a kit builder to the same standard of exterior finish. Do you know, I think their marketing team may actually be on to something... Link to post Share on other sites More sharing options...
Western Scottish Posted April 24, 2012 Share Posted April 24, 2012 I'm not so sure for the majority of the market there is price elasticity .Yes sure there are kit builders that may find high spec coaches much less expensive, but I don't reckon this is a big part of their market. I reckon Hornby are suffering here and I also think they recognise this, hence the existance of the Railroad Range and mid fi items like Tornado and the new Flying Scotsman. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted April 24, 2012 RMweb Gold Share Posted April 24, 2012 Still too early to judge I think. We can re-run the previous debate on this and come up with our own ideas (such as selling high quality coaches at premium-ish prices - that must be a money spinner) but until we hear more detail from Margate we are really shooting at least partly blind. All we know is that they are in profit (good), and seem to be surviving (good) but are undershooting their previous profit forecast (might still be 'good' but might not be good if you're a shareholder who believed their numbers, or you're the Director responsible for those numbers) but don't forget those numbers were more heavily linked to olympic themed stuff than UK model railways. So at present I think it's 'wait & see' but even then I doubt we'll hear enough detail to convince us of anything truly concrete. Link to post Share on other sites More sharing options...
Ozexpatriate Posted April 24, 2012 Share Posted April 24, 2012 Let's not forget, this is a company that turns a profit every year. They didn't hit the "return to growth" targets they set for themselves and communicated with shareholders. This kind of performance is always penalised by the market. I suspect that when they announce final audited results on June 8, they will be more guarded and cautiously optimistic for the coming year. Profits are down for their year ending March 31, 2012 only compared to initial estimates. They appear to be up slightly from the prior year, though this is still down from previous years. Recent pre-tax profits for Hornby PLC are: 2012 £4.5 million (unaudited) 2011 £4.129 million (reported) 2010 £5.215 million (reported) 2009 £6.121 million (reported) With continued, let's say, "uninspiring" performance, there starts to be a whiff of desparation in the boardroom - the fruits of which we discussed at length last year. This is a reasonably healthy company going through a rough patch. They have an iconic brand, they provide employment for many people both directly and indirectly, and often bring us delightful things - like those Thompson suburbans in development. I wish them well. Once they choose to more clearly communicate what liveries their new 8-coupled tanks will represent I will certainly make some purchases. Link to post Share on other sites More sharing options...
andyman7 Posted April 24, 2012 Share Posted April 24, 2012 They have an iconic brand, they provide employment for many people both directly and indirectly, and often bring us delightful things - like those Thompson suburbans in development. They have Iconic brands - remember this is the Hornby group - not just trains but Corgi, Airfix and Scalextric. I too wish them well. Link to post Share on other sites More sharing options...
PLD Posted April 25, 2012 Share Posted April 25, 2012 They have Iconic brands - remember this is the Hornby group - not just trains but Corgi, Airfix and Scalextric.I too wish them well. Exactly: This is the Group as a whole delivering those profits. We don't know how much each of those brands contributes to the overall position. It may be that healthy profits on the Railway ranges (which still seem to be having a decent amount of R&D cash invested in new products) are being drained by losses elsewhere, or it may be that Railways are being propped up by the other areas... We don't know, and without that information it is pointless speculating about profit margins per coach or whatever, and debating pricing policies for what is only one part (albeit the major and best known part) of the overall group activities. Paul Link to post Share on other sites More sharing options...
DavidH Posted April 25, 2012 Share Posted April 25, 2012 What's wrong with "established", "famous", "distinctive", "marketable", "leading" - brands? Why does everything have to be "iconic" these days ... Sorry, rant over. I've just read the latest Model Rail and flicked through the new Steam Railway - both magazines amongst many whose writers and correspondents insist on calling lots of things that are well known and distinctive "iconic" to the point where it's a pointless word that ceases to be of any impact ... Link to post Share on other sites More sharing options...
andyman7 Posted April 25, 2012 Share Posted April 25, 2012 What's wrong with "established", "famous", "distinctive", "marketable", "leading" - brands? Why does everything have to be "iconic" these days ... Sorry, rant over. I've just read the latest Model Rail and flicked through the new Steam Railway - both magazines amongst many whose writers and correspondents insist on calling lots of things that are well known and distinctive "iconic" to the point where it's a pointless word that ceases to be of any impact ... Well I can agree that it is overused, but in this case justified. Hornby - Airfix - Scalextric - Corgi are not just "established", "famous", "distinctive" and "marketable" - in every case they represent beyond their core market the very essence of their relevant product areas, i.e. they are icons of their genre. Link to post Share on other sites More sharing options...
nerron Posted April 25, 2012 Share Posted April 25, 2012 That was my reaction too. In profit is basically a green light. There may of course need to be actions taken if the Profit to Revenue and/or Return on Assets ratios are trending down. A typical response is to raise prices if there is perceived to be some 'price elasticity' on the part of the customer for the product. Clever devils to be bringing out really high grade coaches which would be double, triple, quadruple, the Hornby RRP to obtain from a kit builder to the same standard of exterior finish. Do you know, I think their marketing team may actually be on to something... It would only make sense to raise prices if demand were price inelastic.Raising prices when demand is price elastic (e>1) will reduce revenue as %change in quantity > %change in price(Economics 101).As railway modelling for most of us is addictive perhaps demand is price inelastic! Link to post Share on other sites More sharing options...
D605Eagle Posted April 25, 2012 Share Posted April 25, 2012 Perhaps if they stopped intrroducing obscure loco classes than hardly anybody had heard of before production, and made coaches that you didn't need to take a mortgage out to buy a rake, stop re-issuing old locos and stock from the 80s or earlier at top prices, then their sales might improve. the market is tough, but its not stopped Bachmann making good money. Link to post Share on other sites More sharing options...
Guest Max Stafford Posted April 26, 2012 Share Posted April 26, 2012 "coaches that you didn't need to take a mortgage out to buy a rake" That'll be the excellent Gresley subs I can pick up for £30 then. Which obscure loco classes are you referring to? Introducing the C Class, J11 and Lanky 2-4-2T doesn't seem to be hurting Bachmann. Dave. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted April 26, 2012 RMweb Gold Share Posted April 26, 2012 Perhaps if they stopped intrroducing obscure loco classes than hardly anybody had heard of before production, and made coaches that you didn't need to take a mortgage out to buy a rake, stop re-issuing old locos and stock from the 80s or earlier at top prices, then their sales might improve. the market is tough, but its not stopped Bachmann making good money. An interesting point but do we know what sort of money Bachmann are making? They have said that 'profits are up' - but to where from what, I can't find a thing on the 'net? Hornby - for a variety of reasons - are much more in the public eye, and the newspapers, than Bachmann so we can easily find out a lot more financial detail about the company. And its Directors keep on making bullish statements to their shareholders which are then often very easy to criticise (while Bachmann just get on with the job). And like Dave I'm puzzled by your comment about 'obscure classes' - there don't seem to be any that could truly be called 'obscure' in this year's Hornby catalogue, or am I being too bullish about treating Churchward 'Counties' as not being 'obscure'. But yes, I do agree about old tooling being put out at 'top prices' although the RRP is often well removed from a price you can actually buy at. Link to post Share on other sites More sharing options...
Western Scottish Posted April 26, 2012 Share Posted April 26, 2012 I think it may be a reference to the O1. I know Eastern fans may know what it is but I certainly had to go look it up. Link to post Share on other sites More sharing options...
S.A.C Martin Posted April 26, 2012 Share Posted April 26, 2012 Perhaps if they stopped intrroducing obscure loco classes than hardly anybody had heard of before production, and made coaches that you didn't need to take a mortgage out to buy a rake, stop re-issuing old locos and stock from the 80s or earlier at top prices, then their sales might improve. the market is tough, but its not stopped Bachmann making good money. If that is a reference to the Thompson O1, I sense more than a whiff of the anti-Thompson bias coming over again...! If not, then I have to question - why? "Obscure" classes are all we have left to pick from, if we ignore the potential for retooling the iconic passenger locomotives such as the Lord Nelsons. One could argue quite saliently that there's a better chance to sell more O1s because more of these existed than, say, 10 6P Clans (from the same stable), but the "obscure" argument was nowhere to be seen when Hornby were making their picks then. I'm afraid I'm finding that post to have particularly broken logic - particularly when you consider that Bachmann are doing well from selling equally obscure classes - GWR rod, Lanky Tank, J11...? There's a double standard being set here and I highly doubt there's anything substantial behind it, aside from a questionable campaign against anything in the name of Thompson.(Says the man who was probably the most thrilled when the first new RTR Thompson locomotive class since the Replica B1 was on the shelves all those years ago, was announced!) Link to post Share on other sites More sharing options...
RMweb Premium Physicsman Posted April 26, 2012 RMweb Premium Share Posted April 26, 2012 Perhaps if they stopped intrroducing obscure loco classes than hardly anybody had heard of before production, and made coaches that you didn't need to take a mortgage out to buy a rake, stop re-issuing old locos and stock from the 80s or earlier at top prices, then their sales might improve. the market is tough, but its not stopped Bachmann making good money. I don't disagree with the cost comment, though RRP is virtually never a factor in any purchase due to discounting. In the end, if they get the pricing way wrong, the consumer will vote with their wallet, stock will remain on shelves and Hornby will have to review price structure - even if it hits profits (ohh, the poor shareholder!). The loser, of course, will be the middle-man model shop, as they have to discount stock to sell it off... Vicious circles! The irony of the "obscure" comment is that for many years modellers have been clamouring for every type of loco under the sun. Reminds me of trainspotters collecting numbers and ticking them off in their Ian Allen notebooks! From a Hornby perspective they probably feel they can't win - damned if they do, damned if they don't. I don't like Hornby's general approach, but at least they are making some profit. Hopefully enough to re-invest capital and produce the occasional "jewel" like the L1. Of course, don't get SAC started on their "VEP project"!!! Lol (sorry Simon). Jeff Link to post Share on other sites More sharing options...
S.A.C Martin Posted April 26, 2012 Share Posted April 26, 2012 Apologies, can't seem to edit my original post. I think it may be a reference to the O1. I know Eastern fans may know what it is but I certainly had to go look it up. I had to do the same with the Lanky tank! I don't think "obscure" equals "lack of sales" - and in the case of the O1, Hornby already have half of the locomotive tooled up from the B1 in terms of smokebox, chimney, boiler, cab, valve gear, and it gives scope for other models down the line with the tender and chassis too. If anything, Hornby were more sensible and conservative with the O1 - a guaranteed sale reusing existing portions of tooling. Link to post Share on other sites More sharing options...
RMweb Premium Physicsman Posted April 26, 2012 RMweb Premium Share Posted April 26, 2012 "Obscure" classes are all we have left to pick from, if we ignore the potential for retooling the iconic passenger locomotives such as the Lord Nelsons. One could argue quite saliently that there's a better chance to sell more O1s because more of these existed than, say, 10 6P Clans (from the same stable), but the "obscure" argument was nowhere to be seen when Hornby were making their picks then. Well said, Simon. Jeff Link to post Share on other sites More sharing options...
S.A.C Martin Posted April 26, 2012 Share Posted April 26, 2012 Of course, don't get SAC started on their "VEP project"!!! Lol (sorry Simon). Jeff No problem Jeff It's a fair cop guv... Link to post Share on other sites More sharing options...
Andy C Posted April 26, 2012 Share Posted April 26, 2012 I suspect "obscure loco's" means anything with a steam outline then............. Link to post Share on other sites More sharing options...
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