1andrew1

Bachmann Europe seems to have a good business model which facilitates investment and growth, although its parent company is loss-making. https://www.kader.com.hk/investor_relations/pdf/result2022e.pdf I think the only obvious weakness for Bachmann Europe is with its Lilliput brand. In my first post I mentioned that "Germany is breaking even before depreciation and tax." Presumably after these two charges it is loss-making. For share price watchers, there's always that of its parent company Kader Holdings. https://www.google.com/finance/quote/0180:HKG?sa=X&ved=2ahUKEwjo_sjsg-n_AhU3g_0HHeRjC64Q3ecFegQIKRAf&window=YTD

I do wonder if the corporate name Hornby plc might impact the company's share price as press coverage does tend to include pictures of model railways. Perhaps renaming the company might be beneficial, but to what I'm not sure. From the brand vision it could be Happiness Hobbies plc. 😀

No massive surprises here. I thought the focus on investing in stock control and supporting dealers was interesting. Turnover rose 10% from £16.3m to £17.9m. The launch of the dealer portal and service centre trade platforms contributed significantly to this growth Profit rose rose 50% from £534k to £802k Germany is breaking even before depreciation and tax Management and admin staff rose from 47 to 59. Of these, sales reps rose from 4 to 7. Development staff remained at 14 Aspects highlighted included: Reducing stockholding is a key objective The new ERP system will increase data flow across the group and help reduce stock levels Not announcing products until three months before release is popular. More details https://tinyurl.com/ycpj7meu

I thought the emergence of two new subsidiaries in the annual report was interesting: Hornby World, described as "a retail and consumer experience business". According to Companies House, this was registered in January 2022. Could this be the brand by which the proposed high street retail business will be known? Hornby Hobbies India...are distributors of models". It makes sense as the majority of Airfix kits are manufactured there and it's seen as a growing market. Could this be one of the international markets referenced in the section about the capsule range? "... and our pricing has also limited some of our opportunities to grow our distribution in certain International markets."?

Good points. All I would add is that Tecnitoys went bankrupt in 2012. The brand in Spain is now owned by Amro Invest and licensed to Scale Competition Xtreme based in Madrid, formed in 2017. See: https://www.slotcar-today.com/en/notices/2018/05/entrevista-l.-m.-arnau-scx-en-el-2019-habra-grandes-sorpresas-7264.php

Definitely agree on the need to solve the US issue. To me it's a far easier management move than launching the TT:120 range or HM 7000 and pays off more quickly. Given the state of Hornby's finances and the UK economy, other things I would consider doing are: - Selling Oxford Diecast and possibly licensing/selling Corgi to the new owners. Maybe Lyndon Davies's family will be interested? Writing down the value of Corgi has meant that if it is disposed of in the future, there will be no loss and the stock market should react positively. - Selling Scalextric. This is really more in the toy market than Airfix and Hornby although I acknowledge Airfix and Hornby do dip their toes into the toy market. Perhaps the Chinese OEM manufacturer might be interested or the Spanish Scalextric company?

Airfix does exceptional new tooling too. Companies like Revell sell old moulds acquired from the likes of Frog but in new boxes alongside new tooling in new boxes. This confuses their proposition. Airfix's Vintage Classics approach is a good one.

Do love these January announcements to lighten up the cold months. Last year we had Titfieldgate, this year Pacergate! Never a dull moment. :)

I think two key questions before some part with their cash are: are these made from the Realtrack moulds and if so, are there any differences in motors etc from the Realtrack original run?

A heads-up that Hornby see this as an important launch as it's the only product mentioned from all the brands In their trading update of 10 January. https://polaris.brighterir.com/public/Hornby/news/rns/story/xj95vnw

The two brands seem to have different pricing policies though. I do suspect Oxford Rail is likely to be phased out as it is lumped under Hornby on the Hornby website and not given a separate page, unlike Hornby's other brands, even Basset-Lowke. Perhaps 2023 will see the Oxford Rail brand end.

It's on the Hornby website but it's not sold under the Hornby brand. From the above link, "Oxford Rail Brand".

I tipped the Class 81 (and Deltic) earlier in the thread as a Dublo model. That way, I think the model can command a more premium price than when sold under the Hornby brand. It probably has more collector than modeller appeal, Hornby Hobbies also seem to be using the Tri-ang brand for sets and an 81 would make an unusual trainset without catenary.

I seem to remember that Airfix did something similar with their Castle in the early days of their railway system.

How about a diesel or electric in the Hornby Dublo Range? Perhaps the Class 55 Deltic or Class 81 Electric?

Many thanks.

Please can you expand on "work to what's pre-ordered up to a certain cut-off date, plus a percentage on top" and also how this compares to Hornby's approach. Does Hornby assume more of the risk? Would Hornby's approach be the same as Dapol's and Bachmann's. I'm trying to understand the varying approaches.

Hornby and Bachmann could enter these markets too. I suspect it's more about the incumbents, British, German or Hong Kong, trying to get their existing businesses in order before entering new geographies.

To be fair to Hornby, its peers seem to have similar profitability issues and I've highlighted Kader's recent half-year loss too. Many of Hornby's European peers seem to have fallen into administration in the last 10 years or so too. In 2017, an article in the German press noted: https://www.handelsblatt.com/unternehmen/handel-konsumgueter/modellbahnmarken-kaempfen-ums-ueberleben-bank-soll-fleischmann-und-roco-retten/20465106.html One difficult choice to make concerns profitability in the USA. It's Hornby's second largest market but it seems unable to turn a profit here. Perhaps withdrawing and moving to an agency basis or making a strategic acquisition would solve that issue. Ultimately, I suspect Hornby might become part of another European toy grouping or Phoenix might decide to keep some parts like Corgi and Airfix and sell on the model railway business. Hopefully not, but at the end of the day, they will want their money back to invest elsewhere and someone will have to buy their shares.

Hornby has made a profit in financial years 2021 and 2022. It may make even make a profit in financial year 2023. (For the record, I think this unlikely.) Hornby made a half-year loss. Its UK competitors may have made half-year losses as well but haven't reported their half-year figures as they don't need to. Incidentally, Kader Holdings which owns Bachmann has to report its half-year figures. It made a loss as well - of HK$29.62m (about £3m) on sales of HK$161.14m (about £16.85m) for the six months to June 2022. https://www.kader.com.hk/investor_relations/financial_reports.html

Bachmann's sales figure is not affected by any transfer pricing decisions. Its profit figures may or may not be impacted much by transfer pricing but the company is now showing a profit. The other manufacturer which reports a P&L is Peco. The group includes Pecorama and modelling magazines too. Peco (Pritchard Patent Product Company (2001) Ltd 30/04/2021 Sales £10.1m Post-Tax Profits £187k 30/04/2020 Sales £9.1m Post-Tax Profits £383k 30/04/2019 Sales £9.9m Post-Tax Profits £531k 30/04/2018 Sales £9.1m Post-Tax Profits £332k

I can see how Hornby would be keen to take a share of retail sales given Hatton's historic profitability with far lower sales. Hornby 31/03/2021 Sales £48.55m Post-Tax Profits £1.36m 31/03/2020 Sales £37.84m Post-Tax Loss -£3.4m 31/03/2019 Sales £32.76m Post-Tax Loss -£5.3m 31/03/2018 Sales £35.65m Post-Tax Loss -£9.9m Hattons 30/06/2021 Sales £12.40m Post-Tax Profits £604k 30/06/2020 Sales £12.58m Post-Tax Profits £454k 30/06/2019 Sales £14.75m Post-Tax Profits £840k 30/06/2018 Sales £14.41m Post-Tax Profits £975k Bachmann 31/12/2021 Sales £16.33m Post-Tax Profits £334k 31/12/2020 Sales £13.14m Post-Tax Profits £268k 31/12/2019 Sales £13.92m Post-Tax Profits £135k 31/12/2018 Sales £13.54m Post-Tax Profits £195k

In Hornby's case, losses in financial years 2016 to 2020 inclusive then profits in financial years 2021 and 2022. https://www.Hornby.plc.uk/profit-loss/income-statement/ (Hornby's financial year end is March and Bachmann's is December.)

Only quoted companies have to publish half-yearly results. So we know Hornby has made a loss in the first half but we don't know if the other players made a loss in the equivalent period. So whilst Bachmann and Peco do publish their profit and loss accounts, they only publish their accounts annually. And the others like Dapol have taken advantage of exemptions and do not report their profit and loss accounts.

Minimal. A bit of wasted development and artwork but that's about it. No compensation due as Hornby binned the "Inspired by range".