Hornby Trading Statement Published 22 April

[Peachy]

Apologies if this topic has already been posted, but I couldn’t find it. 
link is here; 

https://polaris.brighterir.com/public/hornby/news/rns/story/rgg323r

I won’t pretend for one moment that I understand the exact details of corporate finance. But it strikes me this can be interpreted with either a half glass empty or full… 

Personally, it feels like they are going in the right direction, whilst Hornby seem to be continuing their investments into new tooling & products. 

Edited April 22 by Peachy
Missing word

[96RAF]

I view that short report as very positive - £12m worth of stock in hand to shift, that is a lot of models.

[Peachy]

2 minutes ago, 96RAF said:

I view that short report as very positive - £12m worth of stock in hand to shift, that is a lot of models.

Yes that’s a lump… I’d be interested to know in what scale?😉

[96RAF]

3 minutes ago, Peachy said:

Yes that’s a lump… I’d be interested to know in what scale?😉

Likely to be across the wider Hornby Hobbies or H2 (H squared) as they term it.

[What About The Bee]

Hornby wrote:

The Group's direct-to-consumer sales continue to increase strongly, at 18% ahead of last year

I do hope that with this increase, the accuracy of on-line content improves, given that the on-line presence is the store.

Bee

[Bulleidboy]

I always find it interesting/amusing to read the basic same heading on different forums. All of the above posts appear fairly positive in their views, if you read RMWeb (I appreciate most of the members are ex-company accountants/analysts) it's all doom and gloom - pretty much the norm?

Edited April 22 by Bulleidboy

[Going Spare]

Someone with better maths than mine can shoot me down, but by my reckoning, if stock has reduced by 12% which is stated to be £3m, 100% of stock was £25m at the previous report, which now has reduced to £22m - considerably more stock to shift?

[Moccasin]

Given the perceived (by some) lack of incentives to buy direct, it’s interesting that these sales continue to grow.

This is why they can reduce/remove discounts etc - they are doing fine without them.

I wonder if the high value container delayed from March to April was the one bringing BG & GWR TT120 Mk3s? Maybe the OO Black Fives too?

Some companies must also love the fact that Easter moves from year to year. They can use this repeatedly to explain better or worse than expected sales in Q4 and Q1! 

[ColinB]

5 minutes ago, Moccasin said:

Given the perceived (by some) lack of incentives to buy direct, it’s interesting that these sales continue to grow.

This is why they can reduce/remove discounts etc - they are doing fine without them.

I wonder if the high value container delayed from March to April was the one bringing BG & GWR TT120 Mk3s? Maybe the OO Black Fives too?

Some companies must also love the fact that Easter moves from year to year. They can use this repeatedly to explain better or worse than expected sales in Q4 and Q1! 

Remember these are the results up to April, many people like me will have have pre orders under the Hornby club where they got 10% off. For me it was a win/win I got the model at the same price as at a retailer and I basically guaranteed the price if it took two years for them to build it. The trading conditions are totally different now. You don't get 10% for being a member and I doubt the price will go up much, unless they don't want to sell anything. What little pre orders I have now, are with Retailers. So basically they may well be looking at the lag in the system because most of the new locos they are selling, other than their bargain basement sale, will have been ordered when members got the 10% off. 

[Moccasin]

Maybe so, but the TT120 club has had no discount for 6 months for many of us, but a good number in this forum are still buying and pre-ordering direct. 

Hornby will of course know this in intimate detail as they will see the level of drop off in orders from individual accounts.

I note as well that they have started web exclusives for the first TT120 range, starting with the TXS HST train set. 

Edited April 22 by Moccasin
As corrected by Going Spare below.

[ColinB]

Who knows? Accountants are very good at manipulating accounts, MRON and Carillion were posting profits just before their amazing crashes. The thing is Hornby is more than model railways. 

[Moccasin]

Construction contractors are a very different beast and irrelevant to a small currently loss-making model company.

Model railways aren’t Hornby’s whole business but by volume and value probably the biggest. Pocher have higher value products but are much smaller in sales volume. Other than a few expensive sets, Scalextric sell much cheaper products. 

Edited April 22 by Moccasin
Clarity

[Going Spare]

Reference to the TXS HST set being a web exclusive was an error and has now been corrected as other retailers are offering it.

[Moccasin]

Too late to change. Thanks for clarifying.

Edit -: apparently I can now edit for longer so the original post is amended to highlight the error. 

Edited April 22 by Moccasin
To add the comment about being able to edit…

[Bulleidboy]

It was mentioned above that you no longer get the Club 10% discount, which is true, but there are certainly advantages to pre-ordering  as soon as a model is announced, as Hornby have always honoured the price when ordered - for example the Black 5 with steam was £224.99 on announcement, it you pre-order today it is £292.99. I appreciate that has nothing to do with being a Club member - but as they saying goes "The early bird catches the worm"

[Rallymatt]

It’s the annual accounts that will reveal how things are developing as trends within the company but all in all it’s about on track of where CEO was predicting last 1/4. Reduction of stock holding still is a priority and improving systems within the company. As many of us have been saying for a while getting the ‘Shop Window’ right is critical particularly in view of the continued growth in direct sales. The high value shipment delays will show up in the next report so it’s not all doom and gloom 😁

[ColinB]

34 minutes ago, Bulleidboy said:

It was mentioned above that you no longer get the Club 10% discount, which is true, but there are certainly advantages to pre-ordering  as soon as a model is announced, as Hornby have always honoured the price when ordered - for example the Black 5 with steam was £224.99 on announcement, it you pre-order today it is £292.99. I appreciate that has nothing to do with being a Club member - but as they saying goes "The early bird catches the worm"

Absolutely correct, that is why I used to pre order with Hornby. I may be wrong but unless we get hyper inflation and Accurascale and Cavalex go bust, Hornby is probably at the limit with what they can charge. At the moment unless it is something you obviously can't do without, then wait for the bargain basement. Yes I ordered a Black 5 at that discount price, I thought at the time that Hornby had miscalculated.

[96RAF]

This thread is starting to get past reasonable discussion and into wild speculation so its time to lock it.