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 Post subject: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 16:51 pm 
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Heard that Hornby is at risk of not making a payment on a loan... Is this true ? and if so what is going to happen to airfix ?


Concerned....

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 17:14 pm 
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http://www.bbc.com/news/business-35538800

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 17:14 pm 
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Just read a couple of online articles...wow this is not cool, shares falling by 48% and a projected £5.5m -£6m loss in the year to March :shock: :?

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 17:18 pm 
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So, it is confirmed that Hornby is in trouble... big trouble ... What are we going to do now ??

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 17:22 pm 
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Is this just off January's sales figures though? Seems to me that given the Black Friday/Xmas sale and the usual post-Xmas lack of consumer credit, it's never the biggest month in any toy companies year anyway... Also the BBC article mentions positive sales figures for November and December.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 19:47 pm 
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Do we know what is dragging them down? Is it Airfix or some other brand? I see they are cutting Humbrol paint range too.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 19:55 pm 
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Before anyone speculates, I'll remind everyone of the site :rules:
Rules wrote:
Rumours and Gossip and Other Sources of Information Concerning Airfix
ATF are often privvy to exclusive information from Airfix and because of this, we do not indulge in the spreading of gossip and rumours but wait until the official announcements from Airfix. Rumours should not be posted on the open forum. Queries about rumours should be addressed to one of the Moderation Team and we will endeavour to find out the truth behind the rumours. Other sources that appear to have come from Airfix must still be verified with Airfix before publication on this site.

We do have a hidden forum so that members can speculate or discuss rumours but it can only be accessed by members signing up to the relevant Usergroup called "Unofficial News of the Sprues".

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 20:28 pm 
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Hardly rumours Ratch when the statements originate from Hornby themselves.


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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 20:33 pm 
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My post was to prevent speculation as to the reasons and/or which part of the Hornby Group was causing problems - not disputing the BBC report :!:

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 20:43 pm 
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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 21:30 pm 
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Now for a speculation free Post.

The two new WWI Airfix aircraft are occupying the top two slots at Hannants. Airfix are doing rather well.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 23:31 pm 
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Now for a speculation free Post - part 2!

Having taken part in the 'Guardians of History' project with my High School Students, and completed a Hornby feedback questionnaire - they sent us a £20 Amazon voucher! :clapping:
They have also booked a time to call me next week at school to discuss suggestions around how the project can be developed for year 2! :clap:

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 Post subject: Re: Hornby in trouble ?
PostPosted: Wed 10 Feb 2016 23:46 pm 
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ME163 wrote:
So, it is confirmed that Hornby is in trouble... big trouble ... What are we going to do now ??

Invest in Hornby. Buy enough shares to influence product development, and understand that business is business. Or just buy Airfix kits.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Thu 11 Feb 2016 07:58 am 
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They are reporting improved sales figures like for like for Christmas and January, which I presume means they have shifted product, but quite possibly in all the heavily discounted last chance and Christmas sales, so the actual money they were making wasn't enough. Sales since then are poor, quite possibly because all their customers have gorged themselves on cheap stock and have no more money, or are now cynical and are waiting for another of the seemingly endless "last chances" sales rather than buying at full price.

A 1 million write-off of factory stock and a projected 6 million loss is more than a little "disappointing", no wonder the share price fell off a cliff.

Hornby RNS
http://hsprod.investis.com/ir/hrn/ir.js ... 0543460352

Quote:
Hornby plc ("Hornby" or "the Group")

UPDATE ON TRADING AND TRANSFORMATION PLAN

Hornby Plc ("Hornby"), the international hobby products group, is updating shareholders on progress made so far in its turnaround strategy.

The Group has made significant progress in implementing changes to its business model to modernise product sourcing, improve management of the supply chain, upgrade the logistics, warehousing, stock control processes and accelerate the distribution routes to customers. This, together with the rollout of the new ERP system, has required major investment and resulted in disruption which has had a significant impact on the trading performance of the business, as previously disclosed on 8th December last year.

UK Trading
In the UK the Group saw a strong sales performance in the key November and December period as sales opportunities were maximised in the run up to Christmas. Like for like sales in this period were up 17% overall year on year, though this masks some volatility within the period. However, subsequent trading since the start of the New Year has been in stark contrast, with a disappointing response to January product promotions combined with poor underlying sales resulting in negative year on year revenue growth and sales for the month being substantially below expectations. While we are expecting performance in February and March to improve on January, it will not reach previously anticipated levels.

International Trading
As disclosed at our interims, there has been a significant reorganisation of the management and distribution operations of the European subsidiaries. The impact of this has been that trading in the international businesses was disrupted last autumn as the restructuring took place. Hornby is now through the main period of major disruption. Improved sales in the last two months have reflected the changes that have been made to the logistics, stock handling and distribution operations and like-for-like sales across December and January combined were up 5%. Despite this being the first positive like for like sales performance this financial year, this is still significantly behind the Board's previous expectations.

Financial Performance
The Group now expects to report a substantially wider trading loss than previously forecast in this current financial year. The team has also conducted a full stock take at the Group's consolidated warehouse in Hersden and a balance sheet review following the reorganisation of the European subsidiaries which will result in a £1.0m write off. The disappointing sales performance experienced in the New Year is expected to result in a trading profit deterioration of between £2.5m - £3.0m, with approximately half due to UK performance. In total the Group is now expecting to report an underlying loss before tax in the range of £5.5m - £6.0m, which represents a substantial setback in our recovery plan for the business.

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 Directors are continuing to execute the Group's turnaround strategy. At the same time, the Board is now analysing the causes and consequences arising from this poor start to the new calendar year. We will update the market on the Board's progress and our revised expectations for the financial outlook for the business in due course.

Richard Ames, Chief Executive of Hornby commented,
"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.

"The feedback from customers at the recent International Toy Fairs was encouraging and we are facing the future where, with the right platform, we can build value for our shareholders and drive the Group's recovery."

-ends-

Date: 10th February 2016

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 Post subject: Re: Hornby in trouble ?
PostPosted: Thu 11 Feb 2016 21:12 pm 
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So how is the model Railway hobby in general then ? Not a train fan myself but always thought model railways were
a popular pasttime. There is a big Railway shop near me at Alton which is always well stocked.
I do notice that the comparitive prices between trains and model planes is quite wide. Trains being a lot more expensive.

If Hornby does get into trouble what effect will that have on Airfix?

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 Post subject: Re: Hornby in trouble ?
PostPosted: Thu 11 Feb 2016 21:24 pm 
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This weekend is the Milton Keynes Model Railway Show, and if previous years are an indication the place will be packed out. So it's still pretty popular around these parts.


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 Post subject: Re: Hornby in trouble ?
PostPosted: Thu 11 Feb 2016 22:28 pm 
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DogTailRed2 wrote:
Trains being a lot more expensive.


Some of it is truly eye watering. Makes a Wingnut Wings Felixstowe look cheap.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Thu 11 Feb 2016 22:58 pm 
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DogTailRed2 wrote:
So how is the model Railway hobby in general then ? Not a train fan myself but always thought model railways were
a popular pasttime. There is a big Railway shop near me at Alton which is always well stocked.
I do notice that the comparitive prices between trains and model planes is quite wide. Trains being a lot more expensive.

If Hornby does get into trouble what effect will that have on Airfix?


Airfix has been consistently profitable as a division - when previous owners have had problems, it has been other activities that undid them and it has always been possible to find a trade buyer for the brand and its assets. So I don't see much risk there. In the worst instance someone buys it.

The issue is the debt payment - if a listed company misses a scheduled debt payment, they'd have to announce the fact under stock market rules I would think, and that's what they've done. It's dumped another 8.75p today to 23p and 4 million of 55 million shares have changed hands. To put that in perspective, the company's stock market cap. is now down to about £12.6 million, which means a pre-tax loss of £5.5 to £6 million is half its market cap. In 2015 they made £1.6 million pre-tax so this suggests a dip of at least £7 million, which is ~15% of sales.

What's a bit disconcerting is that the current problem appears to have been triggered by one month's poor post-Christmas sales, and a bit of pre-Christmas reorganisation outside the UK. For international trading, the statement that "like-for-like sales across December and January combined were up 5%" sounds like one of those months was a bit of a disaster, and the other rescued the picture. From the fact that they haven't made a similar comment about UK sales, it appears that while November and December were good, January was so bad it more than wiped that out.

The £1 million stock writedown says that they expect to get less for it than they thought. The last-chance sales are as I understand it essentially clearance sales to ensure there's space in the warehouse for the 2016 stock as it arrives. If that's not selling even at last chance prices then you have to knock it down even cheaper to ensure you can take in what's inbound, I guess.

So to help them, you either get on the website and buy more stuff or you get onto your broker and buy the shares. However, £800k of them have traded today so probably your money is most effective buying stuff.

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 Post subject: Re: Hornby in trouble ?
PostPosted: Fri 12 Feb 2016 01:56 am 
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Beaufighter wrote:
So to help them, you either get on the website and buy more stuff or you get onto your broker and buy the shares. However, £800k of them have traded today so probably your money is most effective buying stuff.

Your words seem familiar, somehow :)

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 Post subject: Re: Hornby in trouble ?
PostPosted: Fri 12 Feb 2016 10:01 am 
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The UK stock market as a whole is taking a dip again. That can't help either.

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