Hornby 2023 annual results

[Legend]

Think that says it all about Hornby . Shut the visitor centre for refurbishment during the school holidays .

[Geep7]

32 minutes ago, Legend said:

Think that says it all about Hornby . Shut the visitor centre for refurbishment during the school holidays .

Their reasoning being that Winter is their busier period..... 🤔

[adb968008]

The traditional modelling hobby season is the months when its colder outside… September to May, with a November-February peak season.

There’s never a good time to shut shop, but there’s logic in doing it now.

 

Edited June 30, 2023 by adb968008

[melmoth]

16 minutes ago, adb968008 said:

The traditional modelling hobby season is the months when its colder outside… September to May, with a November-February peak season.

There’s never a good time to shut shop, but there’s logic in doing it now.

 

 

Yes perhaps, but that modelling season is not the time of year when your average British seaside resort (a.k.a. Margate) gets the majority of its visitors, who may well be looking for something to do other than sit on the beach, particularly if said resort is getting its share of average British seaside summer rain.

[Geep7]

3 minutes ago, melmoth said:

 

Yes perhaps, but that modelling season is not the time of year when your average British seaside resort (a.k.a. Margate) gets the majority of its visitors, who may well be looking for something to do other than sit on the beach, particularly if said resort is getting its share of average British seaside summer rain.

Exactly. One of the comments on FB even mentioned they were planning of visiting in August, the school holidays no less..... 

[Widnes Model Centre]

52 minutes ago, melmoth said:

 

Yes perhaps, but that modelling season is not the time of year when your average British seaside resort (a.k.a. Margate) gets the majority of its visitors, who may well be looking for something to do other than sit on the beach, particularly if said resort is getting its share of average British seaside summer rain.

Exactly, it’s an Attraction and you need to pay to gain entry. Presumably the cafe is closed as well, entry to there is free though. What was said about getting youngsters engaged in the hobby? 
 

Money for museum receipts is probably not a great deal, cafe and shop on top probably adds up. 
 

Engaging youngsters, entertainment, fun for all the family. Priceless.

[SteveM666]

There is probably no good time to shut down the shop at any time of year if the truth be told.

However, the decision makers will undoubtedly know what the foot flow is through the shop and the resultant income that generates at all times of year and will balance that against the desire to get the new ‘experiential shop’ up and running and generating new income as soon as possible. 

It will act as a proof of concept to allow them to press on with the rest of their plan.

Maybe give them the benefit of the doubt for a change?

[adb968008]

1 hour ago, SteveM666 said:

There is probably no good time to shut down the shop at any time of year if the truth be told.

However, the decision makers will undoubtedly know what the foot flow is through the shop and the resultant income that generates at all times of year and will balance that against the desire to get the new ‘experiential shop’ up and running and generating new income as soon as possible. 

It will act as a proof of concept to allow them to press on with the rest of their plan.

Maybe give them the benefit of the doubt for a change?

on this one I agree.

 

if they need to do it, let them get on with it. we are apparently seeing a new “capsule” range launch later this summer, better to do it in a new shop at season start, rather than launch the range, and close the shop.

 

I wonder if this is a prelude to a new brand and franchising stores perhaps ?

Edited June 30, 2023 by adb968008

[The Stationmaster]

19 hours ago, melmoth said:

 

Yes perhaps, but that modelling season is not the time of year when your average British seaside resort (a.k.a. Margate) gets the majority of its visitors, who may well be looking for something to do other than sit on the beach, particularly if said resort is getting its share of average British seaside summer rain.

If visitors to the centree follow the usual pattern in such 'attractions' which are close to the coast the busy times in the summer are when the weather is bad.  if the weather is good then folk will flock to outdoor things such as the beach or anything else which has a lot of outdoor amusement/interest such as wildlife parks or funfairs etc.

 

However the key almost certainly is that for somewhere like Margate visitor numbers will be at their height in the summer,  especially the school holiday period , and will then tail off post school holidays but probably then boosted by the wrinklies season for a month or so.  Maybe Hornby are after the grey £ and will may be fully op and running for part of the school holiday season but even more so for the wrinklie season and the nostalgia market?   The latter would be a clever marketing move on their part - if they've thought of it.

[SteveM666]

On Facebook the same questions were raised with the assumption from many commentators that the summer would be the Visitor Centre’s busiest (and by extension) most profitable period. Three times a representative from Hornby replied stating that the autumn winter period is its busy/profitable period so it makes absolute sense to make the changes now in readiness for the ‘sunlit uplands’ of autumn/winter.

 

No one on FB seemed to be listening or prepared to listen either.

 

As suggested in a previously post, the HVC being based in a seaside resort, is dependent on the weather, but I guess that the extra visitors use it as a cheap refuge for their kids to mess around in, but that doesn’t necessarily translate into sales. A few extra wet weather visitors paying a few quid for the museum is not going to excite the accountants or get the tills ringing.

Edited July 1, 2023 by SteveM666

[Mike Harvey]

On 24/06/2023 at 14:32, AY Mod said:

 

Possibly making it free of encumbrance? ;)

 

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?

[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?

Edited July 2, 2023 by 1andrew1

[Mike Harvey]

42 minutes ago, 1andrew1 said:

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

By way of explanation, I have been away for the past 10 days and read the topic from the start. So my comment was made in reaction to Andy's post in the middle of last week! Although we do not have sector analysis for the Corgi and Oxford businesses, Oxford have been clearing old stock and sometimes very old stock in "mystery bundles" since the middle of 2022, and is still doing it 12 months on.  If anything I would say that both the diecast businesses were starved of new stock in Hornby's Q3 and unlikely to be the source of the inventory increase. If anything the inventory value would have been higher and the cash inflow lower without Oxford's "mystery bundles" sales.  They currently have numerous bundles on offer but are clearly getting to the bottom of the barrel as the newest versions contain "imperfect, and display" models, and surplus part-work models, rather than only factory fresh own brand items.

 

Oxford Bundles

Edited July 2, 2023 by Mike Harvey
Added link

[Ravenser]

50 minutes ago, Mike Harvey said:

By way of explanation, I have been away for the past 10 days and read the topic from the start. So my comment was made in reaction to Andy's post in the middle of last week! Although we do not have sector analysis for the Corgi and Oxford businesses, Oxford have been clearing old stock and sometimes very old stock in "mystery bundles" since the middle of 2022, and is still doing it 12 months on.  If anything I would say that both the diecast businesses were starved of new stock in Hornby's Q3 and unlikely to be the source of the inventory increase. If anything the inventory value would have been higher and the cash inflow lower without Oxford's "mystery bundles" sales.  They currently have numerous bundles on offer but are clearly getting to the bottom of the barrel as the newest versions contain "imperfect, and display" models, and surplus part-work models, rather than only factory fresh own brand items.

 

Oxford Bundles

 

That is very useful and informative. It does look as if a portion of the inventory issue has been diecast

 

On clicking the link and having a look I discover the bundles aren't just diecast. a number include model railway items. The locos being cleared in this way are mostly  LNER locos in LNER black - D16/3, J15, J27, Q6 - although Adams Radials and a Dean Goods, plus a GW King are also involved. LNER cattle and open wagons and an LMS non-corridor coach also feature

 

Some of these are Oxford Rail items - others are medium sized black locos from a few years back, which are known to have ended up in the bargain bin. Selling them in bundles like this avoids issues with the retail trade.

 

There is also the matter of the Oxford Rail Mk3s, which were a bit of a misfire, and where Hornby decided they couldn't sort out the issues by tweaking the tooling .

 

I recall seeing a seperate Oxford stall at the back of the Hornby stand at Warley, selling off Oxford Rail returns at bargain prices.

 

This is a direction in which we haven't been looking. (I recall when Oxford Rail was launched it was very much seen as showing Hornby how to do model railways)

[HExpressD]

On 01/07/2023 at 13:21, SteveM666 said:

On Facebook the same questions were raised with the assumption from many commentators that the summer would be the Visitor Centre’s busiest (and by extension) most profitable period. Three times a representative from Hornby replied stating that the autumn winter period is its busy/profitable period so it makes absolute sense to make the changes now in readiness for the ‘sunlit uplands’ of autumn/winter.

 

No one on FB seemed to be listening or prepared to listen either.

 

As suggested in a previously post, the HVC being based in a seaside resort, is dependent on the weather, but I guess that the extra visitors use it as a cheap refuge for their kids to mess around in, but that doesn’t necessarily translate into sales. A few extra wet weather visitors paying a few quid for the museum is not going to excite the accountants or get the tills ringing.

Adding to this, even if more people visited in the summer (which Hornby have already said isn't the case) I'd imagine in the winter they are likely to sell more stock in the run up to Christmas. So between 100 people paying a fiver each to walk around the museum, or 50 people spending £200+ on sets, I know which I'd rather in my shop.

[SteveM666]

1 hour ago, HExpressD said:

Adding to this, even if more people visited in the summer (which Hornby have already said isn't the case) I'd imagine in the winter they are likely to sell more stock in the run up to Christmas. So between 100 people paying a fiver each to walk around the museum, or 50 people spending £200+ on sets, I know which I'd rather in my shop.

That was very much my point. Some decisions, like when to do the refit, can be guided by known facts and data, while some are more ‘seat of the pants’ decisions ie ‘loco xyz should sell well, let’s make 10,000’ only to find the original assumptions were wrong.

Maybe that why we see models announced early, with pre-orders providing data as to the viability of the proposed production run.

[Dunsignalling]

2 hours ago, SteveM666 said:

That was very much my point. Some decisions, like when to do the refit, can be guided by known facts and data, while some are more ‘seat of the pants’ decisions ie ‘loco xyz should sell well, let’s make 10,000’ only to find the original assumptions were wrong.

Maybe that why we see models announced early, with pre-orders providing data as to the viability of the proposed production run.

If Hornby has reliable info on potential demand, why do retailers continually have their orders cut back?

 

The Tier "system" seems merely a poor attempt at managing endemic under-supply, and the question arises as to what extent Hornby's declining market share in OO is caused by their failure to fulfil demand rather than competition.... 

 

The issue remains that Hornby's "big bang" annual announcement/catalogue current business model precludes them taking retailer orders before they have to decide production quantities.

 

Until that changes, they will still be too reliant on "seat of the pants" guesswork and IMO, the problem will continue.

 

John

 

 

Edited July 3, 2023 by Dunsignalling

[1andrew1]

On 30/06/2023 at 11:53, Watto1990 said:

Announced this morning that the Visitor Centre shop will be closing for several months for improvements - presumably we’ll be seeing the first of the new retail concept when it reopens? 
https://m.facebook.com/story.php?story_fbid=pfbid028YEamVbyrWdudZ5TbD48m7yWRtU4fRdDcaYEibv7QCSqeh1EHRVx8ADbS86ZrizLl&id=100057106555025

I suspect it will re-open as Hornby World. (Based on a company of that name being incorporated by Hornby.)

[Mike Harvey]

17 hours ago, Ravenser said:

 

That is very useful and informative. It does look as if a portion of the inventory issue has been diecast

 

 

That may be a factor in the historical stock, but would not account for the intake of new stock during Q3 when the diecast model supply was at a low level and what was delivered was selling through quickly. 

[Les1952]

4 hours ago, Mike Harvey said:

 

That may be a factor in the historical stock, but would not account for the intake of new stock during Q3 when the diecast model supply was at a low level and what was delivered was selling through quickly. 

 

Some of the Q3 throughput can be accounted for by 1:120 hot cakes......

 

 

[ColinB]

8 hours ago, Dunsignalling said:

If Hornby has reliable info on potential demand, why do retailers continually have their orders cut back?

 

The Tier "system" seems merely a poor attempt at managing endemic under-supply, and the question arises as to what extent Hornby's declining market share in OO is caused by their failure to fulfil demand rather than competition.... 

 

The issue remains that Hornby's "big bang" annual announcement/catalogue current business model precludes them taking retailer orders before they have to decide production quantities.

 

Until that changes, they will still be too reliant on "seat of the pants" guesswork and IMO, the problem will continue.

 

John

 

 

During the pandemic Hornby could sell all they made. They also released some models that they had not made before, so there was high demand. That is when they bought in the tier system. Fast forward a couple of years and their current offerings are a retool or renumber of existing models plus higher prices. I get the opinion that the demand is not so high. In the last month I have got an APT at a knock down price and last week I bought two latest specification A1s for half price. Now I know that these all came from a particular "on line" model  shop and it may be unique to that firm but it does make you wonder. 

[Dunsignalling]

1 hour ago, ColinB said:

During the pandemic Hornby could sell all they made. They also released some models that they had not made before, so there was high demand. That is when they bought in the tier system. Fast forward a couple of years and their current offerings are a retool or renumber of existing models plus higher prices. I get the opinion that the demand is not so high. In the last month I have got an APT at a knock down price and last week I bought two latest specification A1s for half price. Now I know that these all came from a particular "on line" model  shop and it may be unique to that firm but it does make you wonder. 

 

But how many more could they have sold if they had a dependable way of establishing the level of demand before having to place their own orders with the manufacturing plants?

 

That, I am afraid, is the biggest difference between the way Hornby does business compared with almost all other participants in the industry. Their share of overall sales continues to expand whilst Hornby's declines and this has to be a significant factor even if it's not the primary cause. 

 

The annual catalogue ritual was fine in the sixties when the range was more-or-less static and we were lucky to see one all-new model a year, but it has become a millstone round Hornby's neck because it can't keep pace with the rate at which new models need to be introduced and sold nowadays.

 

I grew up with Tri-ang, Tri-ang Hornby and Hornby and it gives me no pleasure to see the brand in danger of becoming a bit-player in the scale where it saw off the original Hornby, Trix and others to get where it did, at least up to the point where Bachmann and Dapol really got going. A new cadre of directors and executives will hopefully build from where the business really is rather than where their predecessors thought it still should be.

 

TT:120 is a clever idea and likely to become a successful side-line. However, there is a danger of it detracting from focus on "the day job", while any chance of it dominating the hobby in the way OO has for the past seventy-odd years is generations away (at best).

 

If anyone at Hornby thinks TT constitutes a one-brand sanctuary where the company can ride out the winds of change in the dominant market segment, they are sadly mistaken. The true confirmation of it's success will only emerge when others judge it worthwhile to muscle in....

 

John  

Edited July 3, 2023 by Dunsignalling

[friscopete]

.The day job is making money .Is  the mass market for common types saturated anyway ?.Most common types  well known to the public have been made and   judging by the used market many collectors of a certain age  that skim off the models to stay in boxes are  dying off to judge by the huge amount coming on the market. filling up hobby shops There are some great models being produced   for shops and other investors all of which dont produce train sets to inspire more enthusiasts.Is TT 120  a very clever move to creat a new market  in the UK ? I think it is ,likewise Bachmann 009 escapades .

[Dunsignalling]

38 minutes ago, friscopete said:

.The day job is making money .Is  the mass market for common types saturated anyway ?.Most common types  well known to the public have been made and   judging by the used market many collectors of a certain age  that skim off the models to stay in boxes are  dying off to judge by the huge amount coming on the market. filling up hobby shops There are some great models being produced   for shops and other investors all of which dont produce train sets to inspire more enthusiasts.Is TT 120  a very clever move to creat a new market  in the UK ? I think it is ,likewise Bachmann 009 escapades .

The mass market is for whatever clever marketing can create a demand for. Who would (for instance) have anticipated two generic ranges of Victorian/Edwardian coaches a couple of decades ago?

 

Along with large mint/boxed collections coming to market for demographic reasons, numbers of those who bought models of common steam outline and up to BR blue era locos and stock they recall in daily service to use are inevitably declining. I include myself in that category and "we" possibly had/have a tendency to purchase models in quantities roughly proportionate to our memories of reality. How many of today's newcomers will ever accumulate a fleet of 40-odd 16-ton mineral wagons as I have, I wonder?

 

Rightly or wrongly, the industry so far seems reluctant/fearful to fully embrace a similar reality in relation to the "sectorised, privatised and unitised" prototype scene of the late 20th century to date, which ought to represent the natural order of succession.   

 

I suspect that novelty started to become the watchword, when Heljan latched on to one-off diesel prototypes. Now we see Rapido's Titfield range, Hornby's TT:120, Bachmann's OO9, and Dapol/Lionheart's O-16.5. Where next I wonder? 

 

John

Edited July 3, 2023 by Dunsignalling

[The Stationmaster]

14 hours ago, Les1952 said:

 

Some of the Q3 throughput can be accounted for by 1:120 hot cakes......

 

 

Agreed - but they sold whereas what is in the acounts now as inventory includes an expensive pile of suff that didn't sell because the market didn't want it.  If they'd made more TT120 the indications are - according to theh report - that it too would have sold.  If they'd made some of the long delayed 00 models for which they no doubt have pre-orders they too would have sold.  

 

But they spent a lot of borrowed money to the tune of £5 million on things - whatever they were - that they could not sell.  A big, and very expensive, marketing fail. 

 

PSUnlike 'Dunsignalling'. I think Hornby madea good move developing TT120 evebn if they didn't do a decent launch of the range.  They appear to be committed to it under the new management and that makes sense in many respects.  But I think it will only really work for them if they do a complete range and - far more importantly - they are able to open up new markets outside the current model railway market.  If the latter fails all TT120 will do is split shares of the buying cake even further and they will end up competng with themselves as well as other manofacturers.