Clearwater

@legend - Hornby has just tweeted....

Cash is king as they say. Given its an absolute, profit can be subjective depending on non-cash adjustments, any underlying problems will show up. Roy's sales strategy above is not a million miles from what they've been doing. The Black Friday, flash sales etc are all dashes for cash David

I've never had the pleasure of going to their shop. Even with the dearth of model shops in north east London, going to Cornwall would be a tough internal sell. She's also wised up that most UK based holidays I plan have convenient stop off points at railway sites!

Cash down but assets up though!

I spoke to Cornwall earlier today. I needed to ensure that they use interlink to deliver so as I can reroute the parcel to our local corner shop as I'm not that sure my wife will be overly impressed by the arrival of these coaches... Cornwall seemed a little jaundiced. I got the sense they would believe it when they see all the variations arrive in their warehouse David

Id say the dean goods is relatively imminent, pre summer based on the samples. I suspect the King may slip into 2017 and 2017 seems optimistic for the 94xx... David

I'm not sure I quite agree with you. I too have spent most of the last twenty years in front office banking. I quite agree that if Barclays gets to the point of pushing the business into liquidation the problems are intractable. However, Whilst I wan probably a bit quick to leap to a conclusion above, I don't think there will be negative PR for them around this situation and hence not an influence on their decision making process. We've seen enough press articles, a disproportionate number for such a small company, that are all predictable and allow Fleet Street's finest to hone their rail related cliches. You can read the headline now "end of the line for Hornby as bank closes business." Etc etc as nasueam. They'll be some more hand wringing talking head columns about how terrible it is children of today don't play with old fashioned toys couples to an admission they buy their kids an iPad. Of dear and how sad for the enthusiasts. However, the tone will be if the business isn't making money then what else could the bank do? They are not a charity and are not going to continue to fund the working capital of the Hornby business. Where is the bad publicity, where are the millions of customers saying we must keep this business open, will Jermey Corbyn be demanding a statement from Cameron asking what he will be doing to protect this iconic British brand? I'm afraid I can't see it. Even on this site which is broadly supportive of all manufacturers, there is a recognition that if they don't make money, they will eventually fold. I can't see how a risk committee will translate that into a loss of more than the gbp10m so Barclays has out to them. Yes I'm sure Barclays would rather avoid any bad publicity and ideally wants to see the business either sold or retuned to profitability but I can't see a reason why they would hesitate around reputation all risk here. As othersr have said, let's not prhuedge the situation befor Hornby's year end and let's hope for a positive outcome David

I can see how they got to this name but wasn't the Jubilee line named in her honour too? Orignally I think that was known as the Fleet Line. Given building started in earnest in 2012, diamond or Olympic might have been good names though Crossrail is a pretty established brand already

Agreed - depends on the change of control language in the legal agreement. I'd not want to lose control of "my" product however I doubt it captures a change of control of Hornby as a whole David

Agreed Ron - I'm sure would take Bachmann all of 5 nano seconds to extend their license to the uk and export their existing, tooled product to the uk as well... Question is what would they pay Hornby/adminstrators for that licence assuming Hornby has not defaulted on the agreement. If I were h, I might look to sell that licence in the next couple of months David

All banks work in exactly the same way... Yes, a loan is an asset to a bank and, as I commented earlier, banks set covenants so as to be able to intervene whilst the company in question is still profitable and, hopefully, worth more than the loan outstanding I'm sorry but Barclays will not analyse the situation from a PR perspective. The consideration about "who shot Thomas" is not an argument that will be made with any relevance. How can you explain that to your shareholders? The compensation argument is also irrelevant. Barclays loan to Hornby is a tiny, tiny fraction of its loan book. By comparison Barclays will lend hundreds of millions to single FtSe 25 companies. When a loan defaults, the loan is typically transferred to a specialist recovery group. Those guys will be very hard nosed about retrieval of the cash. I'm afraid pr rarely features on their radar. Not Barclays, but you may recall a few years ago HBOS pulled a loan on Farepak just before Christmas leaving lots of people out of pocket. Got dire PR. Didn't stop them. I very much doubt whether Hornby will get any special treatment as the franchise holder for 00 Thomas... David

That's an impressively rapid delivery....

All of which is why I've bitten the bullet and decided to learn to build etched brass coach kits. Hopefully though the rtr market will help out with some of the variety! David

But happy trainspotters - did they bribe the signal man to ensure they got a deltic start up right next to them? David

Where do you get your 70% figure relating to trains? In my view, H provides insufficient disclosure in their accounts to work out profitability of individual lines. Hence the comments in this thread saying "we don't know what the problem is" On the city analyst point, I think you are conflating several separate points and issues. Firstly, Hornby Plc is an absolutely micro stock. From memory, the FtSe 100 will all have market capitalisations of over £2bn. The big stocks, which attract the most coverage from analyst, will be over £10bn. At c 50-100m Hornby simply isn't going to be on analysts' radar. A good analyst will know a huge amount about their coverage sector. If they don't, they won't survive. A top analyst will spend their time with CEOs and CFOs and with large scale investors. If they don't know their sector in enough depth to be able to talk and convey the equity story they would be found out very quickly and would be fired. their job as analysts is to help investors value the stock. They will need to know enough to ask pertinent questions of management and that may well include questioning how the supply and logistics chain is managed. They may then write investment reports critical or supportive of management. However to write that repot, you need to understand the business. To then blame those city analysts for the management of banks' is as analogous to blaming Hornby's product development team for other aspects of that business's failings. The city analyst's job is to understand and report on stocks in a given sector, not manage that bank. Whatever the business, public or private, managing an entity with turnover of multi billions and hundreds and thousands of staff globally is not an easy task. To suggest otherwise is overly simplistic David

Don't worry, it's the EP. Things can change to the final model

I note they have so many 71000s they use them as test beds...

I like the complete chutzpah/lack of irony trumpeting the imminent release of a 70yr anniversary tie in of the end of ww2 just the 6 or so months late. Now given demob happening in phases over 45-47 or so, perhaps they are right for the 70th but that feels like accident and not design! If I were them, I'd stop doing time dated products given the supply chain issues... David

Presumably each wheel adherent will take the opposing view on type of track!

Thanks Richard - more of my experience has been with private ly held companies where share charges are common. A quick check on companies house shows some property charges and fixed and floating charges over the business. David

I think that's a great point. Usual disclaimers about no connection etc,but browsing the brassmasters site offers a good example. One of my gripes as someone starting out in kits is that you need to buy other parts separately. Not knowing what to get can be off putting. On some of their pages on the ex- Martin finney kits, there's the ability to download instructions, pictures of the etches, suggestions on wheels and motors etc. Now I fully appreciate most kit manufacturers are small outfits wand web design may not be their forte and I wouldn't want to distract them but useful to see what can be achieved. I would say that most manufacturers I've asked queries have usually been most responsive in providing information David

Thanks! I may hold you to that. Whilst I don't work in a bank at present, I have financed a couple of power distribution companies.... I'm slightly over my skis answering that question, but I'd say the bank doesn't legally own the shares until they exercise the charge, they can only exercise if the borrower is in breach of the loan agreement and that breach cross defaults the security agreement. Technically they probably don't own them. To actually exercise is a final and irrevocable step so won't be taken lightly. However the threat being there creates the leverage in the negotiations David

If Enterprise value, the discounted value of the pre financing cash flows, is greater than the value of loans outstanding the business has equity value. Using the house analogy, when the mortgage is more than its value, we'd call it negative equity. Same here, same incentivise as if you can't keep up on your mortgage repayments. The bank will hold a charge over the shares (assuming it is secured). Therefore, unless the equity owners resolve the situation to the bank's satisfaction, they can exercise their charge and sell the business themselves. So long as equity value is greater than the costs of solving the problem, they or someone else should do so. If the loan is unsecured, calling the loan creates an insolvency event. Equity will be the last party to get paid from the liquidation proceeds so again if equity thinks there is value they are better controlling the situation by stumping up cash. As others have noted, the equity is not widely held. I'd have thought either direct with management and/or via the corporate broker they are discussing the plan to satisfy the banks. It's no use management saying they can equity without knowing they can do it. Given the stock is traded, this may mean they need to sign up to be insiders and face restrictions on their trading Ultimately the equity value to,the bank is that there are parties incentivised to ensure the bank gets all it's money back as there are others who will lose more. David