Dark news for Hornby rival

[Moccasin]

So while the EU and US revenues may be declining, the important figure is really the fab revenue. Even if the EU & US divisions collapse, the fab can remain vital and strong.

In my view, the fab is main role, the other divisions are really just bit players.

 

 

I guess it depends on how Kader respond to their situation. If it means fewer model production runs to cut costs, then the fab may struggle along with the Bachmann divisions. As you say, new customers take a while to emerge and establish and China’s domestic market has its own woes.

A benefit for Hornby may be that their suppliers have more capacity if other companies switch production to Kader to take advantage of spare capacity. If that’s straw clutching, I apologise!

[Rallymatt]

@Bee, I have only mentioned the figures that are officially disclosed or from highly reputable sources to ensure accuracy. The breakdown in the accounts for Kader Holdings doesn’t indicate which of their sectors are feeding in what figures, hence tracking down the detail on those subsidiaries. Taking out the contribution of Kader Industries Inc (USA) which is much less than I expected, the contribution from Bachmann Europe Ltd and the Property business of Kader Holdings, the property sector that is around 30% of the overall business, leaves under £3m for manufacturing and all other activities as revenue, it’s hard to see there being much fat on that bone. Full 2023 accounts should be available by March, the interim report through 2023 showed mixed financials.

@GHU, absolutely on the nail. Hornby having gone through the pain of having to establish new manufacturing partnerships is ironically in a better position and if they picked up the assets of Kader’s model railway brands they have clearly developed relationships with other manufacturing facilities, but the effects could be very serious across the hobby in the short term. Their client list is not disclosed.

Hornby as a group do have N gauge interests via Arnold, GF could be of interest.

With a slightly sceptical eye, it could be that the parent has been subsiding the ‘production costs’ to their western brands to give them a leg up. Effects of COVID shouldn’t be ignored, Kader have a predominantly over 50’s female workforce based in mainland China.

[LTSR_NSE]

Something that might make others (e.g. Hornby) wary of looking at making offers. As Kader are a Chinese group they might well have all designs/toolings/IP etc. owned by the manufacturing arm & all the international ‘brands’ could simply be commissioners/wholesalers/retailers who own nothing more than the final product.

If that were the case, since a Chinese company cannot be owned by a foreign one, it could make purchasing assets more complicated.

[VESPA]

I am not talking about anything different here from a base BR Maroon MK1 coach with "E" prefix for the car train and the same or similar in BR black or engineers red. Models already made that just need another paint job. Both Hornby and Bachmann have cranes and both have MK1's but none with "E" prefix. Both also have a plethora of steam and diesel locos to suit a straightforward passenger train. It 's a bit like buying a car without suitable wheels. End of conversation from me. I must get some L&M cattle trucks for a BR freight train as they will do.

[Rallymatt]

LT&-SR_NSE, precisely why any change in the status quo could take months of years to work out. The due diligence would be critical. You wouldn’t want to do a ‘BMW’ (when they thought they were buying Rolls Royce 🤣)

[Generic Hornby Username]

Exactly right. Though, I suspect that the sale of the toolings would be pretty cut and dry. One of the advantages of toolings is that they are a physical object that are more easily able to be appraised and sold. Hornby has tooling experts who can go visit and inspect them. If any were of bad quality they could negotiate the price down. I don’t think there is much additional value in buying the Bachmann name. The Hornby brand is strong in the UK. So, it would be as simple as shipping the toolings to the Hornby storage facility after haggling over price. Not too bad.

I really wish we knew who used Kader for manufacturing. I tried looking it up and didn’t find anything. That’s not surprising. Some people who don’t know how manufacturing works might wonder what the difference between brands are if they’re all made by the same factory. Not good for Kader/Bachmann, or their clients.

In the event of Kader going belly up, other firms would also need to sell toolings in order raise money to survive the manufacturing shutdown. Or they might just disband. That means not only Bachmann’s toolings could be for sale, but also other British firms. Hornby could have a field day buying discount toolings.

As bad as Hatton’s shutdown was, it would not compare to the disruption that would occur because of this. The British market is saturated with great models and brands. Possibly oversaturated. This would winnow the field.

[Rallymatt]

Try getting any tooling that may have disputed ownership out of China…. 😳

[Mike_P]

The Bachmann toolings are owned by Kader. That was also the situation when Palitoy started Mainline Railways and why Dapol found although they had bought the Mainline stock in the Coalville warehouse they had no rights to the toolings owned by Kader; only having access to those which had originated with Airifix and, susbequently to Airfixs aquisition by Palitoy, the few non Kader additions - such as the 2P and 56 which were later sold to Hornby. Replica commissioned Kader to make some of the models for them, notably adding the B1 and Modified Hall before Kader made the decision to enter the UK market in own right setting up Bachmann (Europe) .