This makes grim reading:
(https://www.whatifmodellers.com/proxy.php?request=http%3A%2F%2Fwww.theguardian.com%2Fbusiness%2F2016%2Ffeb%2F10%2Fhornby-warns-it-will-lose-6m-pounds-this-year%3FCMP%3Dshare_btn_tw&hash=c4d6a97fe15150d5cdfd423541d2668c1ccb3283)
Quote
Hornby shares crash 48% after latest profit warning
Producer of railway sets, Airfix kits and Corgi cars at risk of breaching one of its loan covenants with its bank
Sean Farrell
Wednesday 10 February 2016 08.17 GMT
Hornby's shares have almost halved in value after the planes, trains and automobiles toymaker said it risked breaking a lending agreement with its bank after a third profit warning in five months.
The producer of railway sets, Airfix kits and Corgi cars said revenue fell in January because stockists in the UK did not respond to product promotions. Trading outside the UK was also disappointing in December and January.
As the result of poor trading and a £1m write-off of stock at its warehouse, Hornby expects to lose £5.5m-£6m in the year ending in March. In November, the company predicted a £2m loss as it warned on profit for the second time in two months.
Hornby said it was at risk of breaching one of its loan covenants with its bank, Barclays. The company's shares plunged by 48% to 42p after the announcement on Wednesday. They have lost more than 60% of their value since late August before the company began issuing a series of warnings about trading.
Hornby has been beset by problems as it has tried to revamp its business by upgrading computer and stock management systems. The overhaul caused UK sales to fall sharply over the summer and affected Hornby's European business, which was also hit by problems getting products made in China on to shop shelves.
In a trading update, Hornby said: "The group now expects to report a substantially wider trading loss than previously forecast in this current financial year. As a result the directors consider there to be a risk that the group will breach a covenant of their banking facility in March 2016. The group has enjoyed a long and supportive relationship with its lender, with whom it is currently in discussions."
The company, based near Margate in Kent, had reported that business in the UK recovered from the summer disruption and underlying sales rose 17% in December. Hornby said its directors were investigating the reasons for the poor start to this year.
Richard Ames, Hornby's chief executive, said: "This has been a real year of change at Hornby. Undoubtedly this is a disappointing result, but we have a strong portfolio of brands that we are determined to see flourish."
Hornby said last month it had high hopes for new products, including Corgi Thunderbirds models based on the original TV series, wooden toy Hornby trains and Scalextric Arc Pro, which lets model car racers drive through different weather conditions and share their results on social media.
This is what makes bankers a despised subspecies of Homo Sapien. Because they control the credit, they chose to let what companies live or die :angry:
As far as I can tell, the bankers havn't done anything wrong here (yet). It seems to be a result of business decisions and mistakesd by senior management. Richard Ames doesn't have a great track record.
Quoterevenue fell in January because stockists in the UK did not respond to product promotions
Hardly surprising when the company is undermining their stockists by selling direct to the customers. Loyalty is a two way street!
Their engineering side has improved by leaps and bounds over the last few years, and that goes for the model railway and slot racing side as well as the kits we know so well. The same can't be said for their business efforts apparently.
When I was growing up boys played with train sets or scalextric.
I was into model trains and can remember either buying Hornby pre-built buildings or getting the Airfix alternative kit.
This meant you could tailor the buildings to suite your layout. There were card building kits and papers for brick or tiles. Shoe boxes were kept.
Hornby and Lima had themed products, although Hornby now own Lima the gantry crane for loading and unloading containers was a well worded letter to Santa.
The themes seem to have stopped the last being Harry Potter.There was a platform 9&3/4s set released but was a limited run.
A surge in digital and live steam but the new generation have yet to be exposed to train sets.
Seems to me to be a father to son or daughter attitude behind closed doors.
Maybe if they intergrated Hornby with Airfix kits circa World War 2.
Not sure what the answer is.
Sounds like the products are good its the distribution system that's taking them down. If someone can straighten that out there may be hope.
Ah, I can start panic buying of Airfix kits. Again.
This is the third (fourth?) time I've done this since the late 70s. It's becoming a regular event.
Alvis Pi
Sales are obviously suffering because of a lack of a Rotodyne in their line up.
According to what i've been told the problem here (with Airfix anyway) lies in getting enough stock to the Australian distributor.
This has been rumbling on in the financial pages/press for about 12 months now. It's amazing how such a small company generates so many column inches. Obviously journalists have fond childhood memories ?
Anyway the feeling is that the core ranges are fine and turn over a small profit. It's the specials and newer lines that cause problems. Witness the Olympic Games themed stuff. There also seems to be a loose management structure that doesn't keep a firm enough control of the business. Part of the current problem is that with the recent move to the new warehouse facilities they have had to write off £1m in stock write downs etc. Now that's a little bit more than loose management and I wonder how much of that was the special "themed" stock ?
So at it's core the business is sound, not a world beater in terms of profit, but sound. It's when they move away from that they have problems. To me it sounds as if they need a new, senior management team who will concentrate on what they do well not on newer, riskier lines that don't seem to work for them.
Please note this is a personal view based on some reading in the financial press.
Quote from: NARSES2 on February 11, 2016, 07:02:36 AM
This has been rumbling on in the financial pages/press for about 12 months now. It's amazing how such a small company generates so many column inches. Obviously journalists have fond childhood memories ?
Anyway the feeling is that the core ranges are fine and turn over a small profit. It's the specials and newer lines that cause problems. Witness the Olympic Games themed stuff. There also seems to be a loose management structure that doesn't keep a firm enough control of the business. Part of the current problem is that with the recent move to the new warehouse facilities they have had to write off £1m in stock write downs etc. Now that's a little bit more than loose management and I wonder how much of that was the special "themed" stock ?
So at it's core the business is sound, not a world beater in terms of profit, but sound. It's when they move away from that they have problems. To me it sounds as if they need a new, senior management team who will concentrate on what they do well not on newer, riskier lines that don't seem to work for them.
Please note this is a personal view based on some reading in the financial press.
Sounds about right to me too.
Gondor
Does Corgi make money? The die cast car collectors I know seem never to buy new Corgi, only old ones. But maybe it's a distributor issue again?
Quote from: NARSES2 on February 11, 2016, 07:02:36 AM
This has been rumbling on in the financial pages/press for about 12 months now. It's amazing how such a small company generates so many column inches. Obviously journalists have fond childhood memories ?
Or maybe 'British Icon From The Past Goes Under' is a standard headline they're pre-conditioned to write and this looks like a chance to use it... :banghead: :banghead: :banghead:
Quote from: zenrat on February 12, 2016, 02:13:23 AM
Does Corgi make money? The die cast car collectors I know seem never to buy new Corgi, only old ones. But maybe it's a distributor issue again?
Now that's an interesting one. I've seen figures for Hornby/Triang, Scalextric, Airfix and Humbrol but not Corgi. I do know that the Corgi range had a fair few Olympic themed items and they didn't do that well at all. As for the recent stuff ? No idea, but my local MZ franchise in Smiths keeps a fairly large stock, indeed better than the range of kits they keep so whether you can read anything into that ?
I know that Airfix don't do a lot of armour but if they'd lose their 1/32nd range & move into the common 1/35th scale, they may sell more of them. :-\
Then there is their 1/76th stuff, it may work for model railways but ...
Why haven't they evolved them into 1/72nd? Their figures are 1/72nd, their planes are 1/72nd; why not their armour & vehicles? :blink:
(Yes, I know there's a cost but the cost of gradual retooling may be easier to bear than the cost of lost sales. Although they may have left their run too late.)
All the new armour seems to be 1/48.
Quote from: zenrat on February 12, 2016, 03:15:50 PM
All the new armour seems to be 1/48.
And it doesn't sell. I've bought a load in the various sales and I can't shift it on ebay even after Airfix have stopped selling it, and at times when other things are shifting. Not sure what the problem is: maybe it's the scale, or maybe it's the fact that it's all strongly branded with Operation Herrick (UK's involvement in Afghanistan) and that isn't popular with people. You'd imagine that military modellers would be immune to the latter though.
Quote from: Old Wombat on February 12, 2016, 06:13:05 AM
I know that Airfix don't do a lot of armour but if they'd lose their 1/32nd range & move into the common 1/35th scale, they may sell more of them. :-\
Then there is their 1/76th stuff, it may work for model railways but ...
All the 1/32nd and 1/76th stuff is existing tooling from decades ago, so trotting it out every now and again is a low-risk strategy. I agree that they're flogging a dead horse with the 1/32nd stuff though: armour modellers are more into dioramas than any other group so they need products from different manufacturers to match scales more than most.
Quote from: Weaver on February 12, 2016, 05:08:21 PM
Quote from: zenrat on February 12, 2016, 03:15:50 PM
All the new armour seems to be 1/48.
And it doesn't sell. I've bought a load in the various sales and I can't shift it on ebay even after Airfix have stopped selling it, and at times when other things are shifting. Not sure what the problem is: maybe it's the scale, or maybe it's the fact that it's all strongly branded with Operation Herrick (UK's involvement in Afghanistan) and that isn't popular with people. You'd imagine that military modellers would be immune to the latter though.
Biggest problem, subjects are
modern,
very British and thus, aside from the Land Rovers, consequently considered as
obscure. :banghead:
According to some who track such things Tamiya's 1/48 scale line haven't set the world on fire sales wise, and the couple of others
who also got into 1/48 pulled out after a couple of releases. The 1/35th armour modelling hardcore didn't take to the smaller scale
and not enough of the 1/48th aircraft builders would make the move outside of their comfort zone, regardless of how many times
you see them posting on the forums about 'Hey, is such and such vehicle available in 1/48th? I'd like to pose it with an airplane."
:rolleyes:
Quote from: joncarrfarrelly on February 12, 2016, 09:05:45 PM
Quote from: Weaver on February 12, 2016, 05:08:21 PM
Quote from: zenrat on February 12, 2016, 03:15:50 PM
All the new armour seems to be 1/48.
And it doesn't sell. I've bought a load in the various sales and I can't shift it on ebay even after Airfix have stopped selling it, and at times when other things are shifting. Not sure what the problem is: maybe it's the scale, or maybe it's the fact that it's all strongly branded with Operation Herrick (UK's involvement in Afghanistan) and that isn't popular with people. You'd imagine that military modellers would be immune to the latter though.
Biggest problem, subjects are modern, very British and thus, aside from the Land Rovers, consequently considered as obscure. :banghead:
Sad isn't it? Merkavas and Marders are non-American things used by only one country too, yet there seem to be insatiable demand for them...
Quote
...not enough of the 1/48th aircraft builders would make the move outside of their comfort zone, regardless of how many times you see them posting on the forums about 'Hey, is such and such vehicle available in 1/48th? I'd like to pose it with an airplane." :rolleyes:
Different subjects might address that, i.e. more airfield vehicles in 1/48th, like Airfix's recent WWII set. You don't tend to see tanks on fighter airbases that much...
There's actually been a bit of a push for compatibility the other way though, since some battlefield helo kits are made in 1/35th rather than 1/32nd so they can be posed with AFVs (which is, of course, real-world credible)
Tamiya do the Citroen TA, Austin Tilly, Jeep, VW Kubelwagen, 1942 Ford sedan, GM CCKW fuel truck,
Type 95 Kurogane (which Hasegawa also does) all of which are posable with airplanes, I've seen all
of them built at shows, but primarily as stand alones.
Airfix also need to stop tooling up new car kits in 1/32. Cars are modelled in 1/25 (preferably) or 1/24 unless they are slot cars.
Quote from: zenrat on February 12, 2016, 11:25:56 PM
Airfix also need to stop tooling up new car kits in 1/32. Cars are modelled in 1/25 (preferably) or 1/24 unless they are slot cars.
That's why they're doing them in 1/32. Because they can use the same moulds to produce Scelextric cars, which was impossible until Hornby bought out Airfix.
I do not buy as many Airfix or other plastic kits as I used to. There are several reasons but the main one is the demise of the simple pocket money kit for my grandchildren to build. They do want a Spitfire but not one with 23 parts in the cockpit.
So what do I buy them? Quick build clip together kits from "The Works" - £2-3 each with paint and a paint brush.
The ones I look for are indeed the ancient kits because the 4-8 year olds can build them. The more complicated and accurate the kits the fewer will be sold as there is a market, if the way the clip kits fly off the shelves is anything to go by, which lies with simple introductory kits for children. Many moan about children not getting involved in making models but the very models on sale put them off.
Kits aimed at Wargamers are handy - Armorfast simple quick builds are very good and not much more expensive but no paint and no stickers!
the other problem with the 1:48 armour is, what armour ? we've landys, great for lots ( UNIT, post apoc, police work, farming etc), quads (farms and err), the jackal and coyote ( post apoc, but only at a push) and Warrior which covers end of cold war onward, but no actual armour, no CVRT scorpion etc, no Chally 1 or 2, nothing like the Fox, Ferret etc. If you want them you have to look at resin and in various scales ( 1:56, 1:50, some 1:48).
ive got over a dozen warriors both for real ( wargames use) and whif, but combined arms is kind of difficult without combined.
From da Beeb:
Hornby shares soar as boss is derailed
http://www.bbc.com/news/business-35576892
And a different look at it from NewsThump:
Corbyn to nationalize Hornby
http://newsthump.com/2016/02/15/jeremy-corbyn-pledges-to-nationalise-hornby/ ;D
:lol: :lol: :cheers:
Quote from: joncarrfarrelly on February 15, 2016, 09:14:57 AM
From da Beeb:
Hornby shares soar as boss is derailed
http://www.bbc.com/news/business-35576892
Good. :thumbsup:
Reissue the U-2 please. I'd by a few, as would others....Kit probably has the entire last run in his rafters....
-Dave
Yup shares rose 37% at one point yesterday with the resignation of the CE and the Chairman taking over the running of the company. Up another 8.6% this morning in early trading
Quote from: sandiego89 on February 15, 2016, 07:45:28 PM
Reissue the U-2 please. I'd by a few, as would others....Kit probably has the entire last run in his rafters....
-Dave
I'd settle for just the wings.
Quote from: sandiego89 on February 15, 2016, 07:45:28 PM
Reissue the U-2 please. I'd by a few, as would others....Kit probably has the entire last run in his rafters....
-Dave
Well, a fair proportion of the last production run anyway. ;D