1andrew1

Great minds think alike but I do take posters' subsequent points that we don't know the profitability of the various brands.

On 25/06/2023 at 12:22, 1andrew1 said:

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? 

44 minutes ago, Mike Harvey said:

I could see a bundled Oxford Diecast and Corgi being an attractive proposition at the right price, and free of headquarter's overhead burden. I wonder who might spend their nest egg on that?

17 minutes ago, woodenhead said:

How about Triang

Lol. I was thinking the first suggestion made would be Rovex. 😀

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

22 hours ago, Ravenser said:

You've picked up on another example of the "everything else is a minor detail compared to OO" mentality that afflicts these discussions.

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."?

42 minutes ago, andyman7 said:

The high end models are not 'toys'- well, no more 'toys' than detailed scale model railway engines. It's not massively different to Hornby's train range, a proportion is toy/hobby/boys toys market and a a proportion is for scale models of individual racing cars in period correct liveries with the right details. 

A sale only makes sense if the range is a drag on the bottom line which is not necessarily the case. Tecnitoys is the current owner of the Spanish Scalextric/SCX range, having acquired it in 1997 when Tyco (the previous owner) was bought by Mattel. Tyco had acquired it in 1992 when the original Exin company sold out, Exin had been the original licensees from Triang Minimodels; it was back in 1992 that the Scalextric trademark got split between territories. A future in that direction would be better than ending up anywhere else, were it to be sold.

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? 

7 hours ago, Weeny Works said:

 

Indeed. But when competitors like Tamiya, Revell & Academy do exceptional tooling with more niche subjects for similar prices it starts to raise the question if the pain is worth the gain. 

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. :)

22 minutes ago, frobisher said:

 

I think too many of us may be looking for a controversy where there probably isn't one.

 

Arran of Realtrack has stated that there is no licensing agreement in place between EFE/Bachmann and Railtrack (who own the tooliing that was used for their models - And I don't blame Arran for making the clarifying statements, because the silly ideas will otherwise take root as "fact" given time.

 

There are a range of solutions to that puzzle that do not require anything nefarious going on but outside of those actually in the know, these are purely speculative.

 

 

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.

Quote

We are excited about the Group's 2023 product range which launches today. In particular the Group is launching this month a new control system for trains utilising Bluetooth® technology to connect to phones or tablets, which will replace traditional systems in the market.

https://polaris.brighterir.com/public/Hornby/news/rns/story/xj95vnw

11 hours ago, luke_stevens said:

 

For all intents and purposes Oxford and Hornby are the "same" thing, at least for the moment. Whether that will change when Lyndon Davies stops being Hornby CEO is a good question!

 

Luke

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.

6 hours ago, Steamport Southport said:

 

Already in the range.

 

https://uk.Hornby.com/products/j27-lner-red-lining-no1214-or76j27004?_br_psugg_q=l%26ner+lined+class+j27+no.1214

 

 

Jason

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

5 hours ago, wombatofludham said:

There are some things that might just force me to reconsider my avoiding any spend with Hornby, they being an Intercity Executive HST with new tool TRSB four bay buffet second for those of us who want to have a Cross Country seven car set, especially if the new model can actually cope with a full length train round tight curves, a Class 120 Swindon cross country DMU, and most unlikely, a WCML EMU like a 304 or 310.  I doubt any of those will come although the TRSB ought to be possible given Hornby now have access to Oxford's research on the Mk3 fleet they said they were going to do more of.

One outside possibility is a Class 81, after all both Triang and Hornby-Dublo had them in their ranges, and Hornby seem to like revisiting old models.  My only concern is they would do a straight re-release of the Triang model in the faux Triang train set packaging and assume that is good enough for those non-steam enthusiast freaks.

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. 

7 hours ago, TheSignalEngineer said:

Correct Mike. It was a Cardiff Castle with six coaches on a 6x4 roundy housed in a sealed cabinet in the Meccano showroom in London. It did 46000 laps equating to about 153 miles at a scale speed of 123 mph. It was reported in the Meccano Magazine in November 1960 and I think also featured on Blue Peter.

I dont know if the link will work, will post other details of how to find it if not successful.

http://www.nzmeccano.com/MMviewer.php

 

If unsuccessful go to http://www.nzmeccano.com/ click on the Magazine tab, go to November 1960, page 564.

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?

7 hours ago, Dunsignalling said:

Simply because others decide production quantities after taking orders.

 

Hornby announce what's going in their catalogue, then invite their dealers to place orders. That means that their decisions on quantities are clearly taken before they know how many the dealer network wants. Otherwise the repeated problems of having to deep discount surplus items or cut dealer supplies (months after they must have known it would be necessary) just wouldn't occur. 

 

It's frankly daft, and it's been going on for a long time. I suspect Hornby previously got away with such lax practices because of their overwhelming dominance of the market.

 

Since that started changing, they seem to be in trouble. Coincidence? I think not.

 

Whilst all brands have suffered delays, we don't hear tales of drastic over/under supply issues relating to anyone but Hornby, which suggests that everybody else has better ways of doing it.  

 

John

 

 

 

 

Many thanks.

23 minutes ago, Dunsignalling said:

That's what the man from Rapido (or is it Accurascale, I forget which!) told us a few posts back.

 

AIUI, at least some of the "new boys" work to what's pre-ordered up to a certain cut-off date, plus a percentage on top.

 

Hornby's business methods would make it impossible for them to do things that way round.

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.

17 hours ago, adb968008 said:

HO has several markets to grow, what holds it back is Germans being German (Piko excepted), and typically over risk averse, so newer entrants are slowly doing it.

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.

3 hours ago, adb968008 said:

There are several companies in the hobby which do well, you never see their names associated with hard times, even in hard times.

 

So its not a problem with the hobby.

 

That to me means its a problem with the company. In simplistic terms companies only revolve around revenue and expenses. One needs to be lower than the other. For several reasons the current company just isn't consistently able to do this judging by its annual reports.
 

For sure theres recent investments in the future, and I hope its not just TT and theres more surprises to come. But hopefully the new CEO hopefully will recognise some of these longer term issues, which imo, have festered for many years, and may need to make unpopular choices and adjustments imo to get this busines ship shape.

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:

Quote

Roco and Fleischmann have been fighting to survive for years. Now the Salzburg Raiffeisen Association [regional bank which has bailed the company out before] is saving the two traditional model railway brands. But it will be difficult for the brands to fire up their engines again.

Both Roco and Fleischmann have been in economic difficulties for a long time - as have large parts of the model railway industry. The industry leader Märklin went to the wall in 2009; its competitors LGB and Roco went a few years before it. Fleischmann had to file for bankruptcy two years ago.

 

 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.

1 hour ago, woodenhead said:

But despite all this change and what seems to be a still buoyant market for trains, Hornby still manages to make a loss each year, at least they are consistent.

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

On 03/12/2022 at 10:31, Legend said:

Comparing  Bachmann not really relevant . Remember for most of its models ( not EFE , I think) it has to pay Kader . There’s probably a profit residing in Kader for goods transferred to Bachmann Europe , so it’s not the complete picture . It’s called Transfer Pricing . 
 

Interesting to see sales drop in Hattons 2019- 2020 . Is that the effect of loss of Bachmann and the Hornby Tier system? I can’t remember the timing now . Interesting their pretax profits increasing again . Well done them , although behind it there may have been restructuring and people losing jobs .

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
 

3 hours ago, woodenhead said:

So into loss 2016 and 2017, then an annual improvement 2018-2021 all in profit.

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.)