Hornby Price Increases Part 2

[Phil Parker]

7 minutes ago, Sjcm said:

Well companies will always plead poverty. My view is if they were making a good profit in 2005 selling their bestest A4 for 100 pounds, then selling one now for 239 pounds now is about 70 pounds above inflation. Of course you can get the presumably same(?)  20+ years now railroad model for 150 pounds which is below inflation, but the fact remains has it really cost them an extra 70 pounds on top of inflation to produce the updated model? I doubt it. They obviously think the market can handle that and they'd be right

 

They might plead poverty, but their report to the City has to be more than emotion, and Hornby's (

doesn't say massive profits kicking around anywhere. I don't recall them making a "good profit" in 2005 either.

 

[jjb1970]

I know I have said this before, but my boss has a set of golf clubs which cost $$$$$$$$s, and he spends $$$$$$$$$s flying around SE Asia and further afield to play golf. I have never heard him complain about the cost of his hobby.

 

Mrs JJB has a Juki industrial sewing machine and an embroidery machine which cost eye watering amounts, she accepts it as the cost of her hobbies (and that's without getting into handbags. ....).

 

I have a friend who is not that well paid but who rides a proteam replica Pinarello racing bike built up with Shimano Dura Ace components.  He saved and sacrificed for it and to keep upgrading bits and never whinges about the price.

 

I could go on. I know several people in regular jobs who have slowly built up hifi systems costing tens of thousands. Again, these aren't rich or even particularly well paid people, they've sacrificed and saved.

 

I get that we're not in the best ot times and models are very expensive for many, but it's a discretionary hobby, not potable water and food. Nobody needs new models, there's plenty of second hand out there and there's always that ancient idea of saving up and being selective.

 

If it's that easy, get a bank loan, bring a super detailed model to market for £200 and make ££££££££s. How much do people value their time and expertise? How much risk are they willing to take mortgaging their home to fund a model? Others have done it, and some have been badly hurt financially in the attempt.

Edited September 16 by jjb1970

[JohnR]

18 minutes ago, Phil Parker said:

 

I don't recall them making a "good profit" in 2005 either.

 

 

Depends on what you define as a good profit. Their previous accounts are still available online, and to end March 2006, they made a profit of £14.029M on a turnover of £37.5M, compared to a profit the previous year of £15.596M on a turnover of £41.8M.

 

I think its clear that the costs to Hornby have increased massively since then, way above the general trend for UK inflation - mostly due to manufacturing costs in China and shipping. 

[Sjcm]

 

13 minutes ago, Phil Parker said:

 

They might plead poverty, but their report to the City has to be more than emotion, and Hornby's (

doesn't say massive profits kicking around anywhere. I don't recall them making a "good profit" in 2005 either.

 

yeh but is that due to what they're in dabbling now? the huge development and roll-out cost on a punt on a new gauge? I'd agree that a 15% "70 years" discount doesn't hint things are rosy but is the profits on one paying for the other?   That a serious question as  personally I have no idea of the take-up on TT beyond the initial "must have" mob, and whether it will become established. Obviously if tt is a huge success I stand corrected.

[andyman7]

2 hours ago, Sjcm said:

Well companies will always plead poverty. My view is if they were making a good profit in 2005 selling their bestest A4 for 100 pounds, then selling one now for 239 pounds now is about 70 pounds above inflation. Of course you can get the presumably same(?)  20+ years now railroad model for 150 pounds which is below inflation, but the fact remains has it really cost them an extra 70 pounds on top of inflation to produce the updated model? I doubt it. They obviously think the market can handle that and they'd be right

It's worth pointing out that inflation is defined by an average basket of activities - it isn't some magic figure that companies can make use of to define costs. In that regard, even if we leave aside lack of evidence (as opposed to conjecture) about relative profitability of model railways in 2005 vs 2024, the world has changed so much since then that its use as a benchmark is pretty pointless.

2005 predates:

 

- the 2008 financial crash

- Chinese economic policy since then

- Brexit

- Covid and effect on supply chains

- the Ukraine invasion

- much greater tension in world trading and geopolitics

 

All of these have had a disproportionate effect on certain fringe activities such as model railway manufacture, and mean that there is no broad equivalence in the costs of getting a manufactured A4 in 00 scale landed and in UK shops between then and now.

 

Indeed as time passes it is becoming apparent that the years 2000-2008 were ones of exceptional abundance unlikely to be repeated soon as the massive deflationary effect of moving production to China coincided with dramatic leaps in the capability to mass produce fine scale models to an affluent retired generation, a fair number of whom have now passed on. 

Edited September 16 by andyman7
Spelling

[GrumpyPenguin]

3 hours ago, Phil Parker said:

Only if you assume the companies are making massive profits.

Or have a debt mountain to service, in any case I was generalising and not singling out model "makers".

[Phil Parker]

10 minutes ago, GrumpyPenguin said:

Or have a debt mountain to service, in any case I was generalising and not singling out model "makers".

 

This is a model railway forum, and you were answering a point about Hornby, on a Hornby price increases thread. It's not unreasonable to think you were talking about model "makers".

[GrumpyPenguin]

1 hour ago, Phil Parker said:

This is a model railway forum,

I would not have thought it judging by some of the posts/comments &/or and thread drift.

 

No matter, my original comments were insanswer to a poster who mention football and other pursuits..........

[The Stationmaster]

4 hours ago, Phil Parker said:

 

They might plead poverty, but their report to the City has to be more than emotion, and Hornby's (

doesn't say massive profits kicking around anywhere. I don't recall them making a "good profit" in 2005 either.

 

In  2005 Hornby made a bottom line profit of £5.488 million out of which they paid a dividend of 5p per share. Their Pre-Tax profit was £7.534 million.  

 

Their turnover that year was just over £45 million. On the basis of the inflation rate between that year and now their reported turnover this year should have been £77.10 million (actually £56.2 million) and their cost of sales and operating expenses in 2004 was £37.343 million which should equal to £63.39 million in this year's accounts but actually came to only £31.59 million (on direct comparison of cost areas).  

And that shows the root of their problems in a nutshell - their revenues have declined steeply (a problem which began to emerge, but far from consistently, by the early 2010s, while their expenses relative to revenue have increased despite having fallen massively in real terms.  

 

Their current heavy concentration on increasing sales revenue and turnover shows that the present CEO clearly understands that side of the equation and the very real need to increase revenue.  But there remains, in my opinion, a very pressing need to reduce costs

[1andrew1]

7 hours ago, The Stationmaster said:

In  2005 Hornby made a bottom line profit of £5.488 million out of which they paid a dividend of 5p per share. Their Pre-Tax profit was £7.534 million.  

 

Their turnover that year was just over £45 million. On the basis of the inflation rate between that year and now their reported turnover this year should have been £77.10 million (actually £56.2 million) and their cost of sales and operating expenses in 2004 was £37.343 million which should equal to £63.39 million in this year's accounts but actually came to only £31.59 million (on direct comparison of cost areas).  

And that shows the root of their problems in a nutshell - their revenues have declined steeply (a problem which began to emerge, but far from consistently, by the early 2010s, while their expenses relative to revenue have increased despite having fallen massively in real terms.  

 

Their current heavy concentration on increasing sales revenue and turnover shows that the present CEO clearly understands that side of the equation and the very real need to increase revenue.  But there remains, in my opinion, a very pressing need to reduce costs

Interestingly, since 2005, Hornby has expanded its offerings with the acquisition of Airfix (2006) , Corgi (2008), Oxford Diecast (2017 and 2021) and the re-launch of acquired brands Lima, Rivarossi, Arnold and Jouef in 2006.

 

These brands generated additional headcount and costs. However, despite the significant expansion in what it offered, Hornby's sales since 2005 have not kept up with inflation. 

Edited September 16 by 1andrew1

[GrumpyPenguin]

11 hours ago, 1andrew1 said:

 the re-launch of acquired brands Lima, Rivarossi, Arnold and Jouef in 2006.

As a European HO modeller I've always regarded Lima, Rivarossi & Jouef as nowhere in the same league as the likes of Roco.

Certainly they were much improved during the latter years before being bought out by Hornby.

But currently, the supply is not what I would call reliable and the prices often exceed what is available from Roco/Piko.

The distribution structure does not endear itself to smaller shops (those that are left of course) stocking HO from the Hornby stable.

I'm surprised that Hornby have not made much of an effort to promote  the brands in the UK (albeit a small European market).

I have a few recent issue locomotives from the group & they are excellent, apart from a few odd items of rolling stock all I have there is a 12coach rake of Rivarossi CIWL's.

[Michael Hodgson]

On 04/09/2024 at 17:54, Dunsignalling said:

Once upon a time, perhaps, but the first thing most people do when considering taking up a hobby, is to read magazines on the subject.

 

The obvious choice for the unaware will be the one with the Hornby name on the front and, as soon as anyone opens a copy, the cornucopia of alternatives will be apparent.

 

 

You've just got look for a Hornby train on ebay, and you'll immediately see some shyster flogging a different brand misleadingly described as "suitable for Hornby". 

[D9020 Nimbus]

22 hours ago, The Stationmaster said:

In  2005 Hornby made a bottom line profit of £5.488 million out of which they paid a dividend of 5p per share. Their Pre-Tax profit was £7.534 million.  

 

Their turnover that year was just over £45 million. On the basis of the inflation rate between that year and now their reported turnover this year should have been £77.10 million (actually £56.2 million) and their cost of sales and operating expenses in 2004 was £37.343 million which should equal to £63.39 million in this year's accounts but actually came to only £31.59 million (on direct comparison of cost areas).  

And that shows the root of their problems in a nutshell - their revenues have declined steeply (a problem which began to emerge, but far from consistently, by the early 2010s, while their expenses relative to revenue have increased despite having fallen massively in real terms.  

 

Their current heavy concentration on increasing sales revenue and turnover shows that the present CEO clearly understands that side of the equation and the very real need to increase revenue.  But there remains, in my opinion, a very pressing need to reduce costs

If you check the figures, they show the opposite. In 2004, expenses were about 80% of turnover (37/45) and in this year they are about 55% of turnover (31/56) — so expenses take up a smaller percentage of turnover than before (unless you mean something different by "revenue" but if you do, you haven't shown these figures here).

Edited September 17 by D9020 Nimbus

[GrumpyPenguin]

19 hours ago, Michael Hodgson said:

You've just got look for a Hornby train on ebay, and you'll immediately see some shyster flogging a different brand misleadingly described as "suitable for Hornby". 

What exactly is the problem with that ? I don't see anything actually "misleading" in that statement.

Maybe, to be in RMWPM it should read "suitable for use with Hornby" ?

[The Stationmaster]

19 hours ago, D9020 Nimbus said:

If you check the figures, they show the opposite. In 2004, expenses were about 80% of turnover (37/45) and in this year they are about 55% of turnover (31/56) — so expenses take up a smaller percentage of turnover than before (unless you mean something different by "revenue" but if you do, you haven't shown these figures here).

It works rather differently although I only quoted bald numbers.  For example in 2004/5 the number of (paid) executive directors was much larger than now but their overall staff numbers have increased (171 to 227 - both including executive directors; the number of staff increased by 15 between year end 2023 and year end 2024). 

 

In other words against a background of  a real reduction in revenue they are employing more people to earn less real revenue - i.e. the company is less efficient.  

[GrumpyPenguin]

2 hours ago, The Stationmaster said:

In other words against a background of  a real reduction in revenue they are employing more people to earn less real revenue - i.e. the company is less efficient.  

In therory yes, but having a few more "boots on the ground" orders may get processed quicker, problems may get sorted sooner and over time it may inbcrease turnover and boost customer confidence. Of course it does depend on where those "boots" are, no good if they are utilised for "empire building" which seems to be a real issue/problem with some companies.

[ColinB]

Something recently happened in the last two days which is interesting. Two items I preordered at least a year ago arrived in stock. One was a set of ex Hatton's Genesis coaches now handled by Rails, the other a loco pre ordered off Hornby. So unusually I can do a Supplier responsiveness check, a bit like Sam did on one of his videos. The Rails coaches arrived today, twenty four hours after they asked for the money. Sadly no sign of the Hornby preorder even though I paid roughly at the same time as Rails, it hasn't even reached their Shipping department (I normally get a Tracking mail, when it does). So Hornby want to sell direct, I think they have a few issues to resolve first.  

[GMKAT7]

Good afternoon ColinB,

 

My recent experience with the Airfix side of Hornby Hobbies is:

Order placed online Friday 13th September.

Order delivered by DPD Tuesday 17th September.

 

Given that includes a weekend, that's not too shabby in my book.

 

Cheers, Nigel.

[Pecketts And Panniers]

The exact opposte for me. A recent Hornby order was placed on a Saturday and arrived the following Wednesday, so exactly in line with @GMKAT7 's timings.

My Rails/Hattons Genesis coaches was paid on Wednesday, but as of now (late Friday afternoon) not even a dispatch notification, despite the Royal Mail Tracked 24 shipping option.

[ColinB]

1 hour ago, Pecketts And Panniers said:

The exact opposte for me. A recent Hornby order was placed on a Saturday and arrived the following Wednesday, so exactly in line with @GMKAT7 's timings.

My Rails/Hattons Genesis coaches was paid on Wednesday, but as of now (late Friday afternoon) not even a dispatch notification, despite the Royal Mail Tracked 24 shipping option.

Actually the Hornby timings you state aren't that great. Correct me, but the mail works on Saturday and Monday. I have even had Rails items delivered on Sunday. Generally most of my Hornby orders take at least 4 days, sometimes even longer. Sometimes the order sits in their Shipping for quite a while. I have to admit that was a very quick delivery but both Rails and TMC have upped their game recently. Anyway the timer is set on this latest loco, so lets see.

[Pecketts And Panniers]

24 minutes ago, ColinB said:

Correct me, but the mail works on Saturday and Monday.

Maybe the mail does, but Hornby don't work on a Saturday. An order placed on a Satuday arrived on a Wednesday. Hornby process it on Monday, it's picked up by DPD later that day and arrives on Wednesday.

Unlike Rails, Hornby didn't charge me for delivery (because it was more than £50), so I'm quite happy with a two day delivery time. On the other hand, Rails charged me £4 for a stated next day delivery. The order was placed late on Wednesday, so a Friday delivery expectation is perfectly fair for that, but as of Friday evening, nothing's turned up - not even a "we've shipped it - here's your tracking number" e-mail.

I'm sure it varies by customer, but for me, Hornby are doing much better in the "delivering according to the customer's expections" than Rails.

[andyman7]

27 minutes ago, Pecketts And Panniers said:

Maybe the mail does, but Hornby don't work on a Saturday. An order placed on a Satuday arrived on a Wednesday. Hornby process it on Monday, it's picked up by DPD later that day and arrives on Wednesday.

Unlike Rails, Hornby didn't charge me for delivery (because it was more than £50), so I'm quite happy with a two day delivery time. On the other hand, Rails charged me £4 for a stated next day delivery. The order was placed late on Wednesday, so a Friday delivery expectation is perfectly fair for that, but as of Friday evening, nothing's turned up - not even a "we've shipped it - here's your tracking number" e-mail.

I'm sure it varies by customer, but for me, Hornby are doing much better in the "delivering according to the customer's expections" than Rails.

Which belies my experience last weekend, ordered from Hornby Friday night, order processed Sunday, delivered Tuesday...

[jonnyuk]

7 hours ago, ColinB said:

Something recently happened in the last two days which is interesting. Two items I preordered at least a year ago arrived in stock. One was a set of ex Hatton's Genesis coaches now handled by Rails, the other a loco pre ordered off Hornby. So unusually I can do a Supplier responsiveness check, a bit like Sam did on one of his videos. The Rails coaches arrived today, twenty four hours after they asked for the money. Sadly no sign of the Hornby preorder even though I paid roughly at the same time as Rails, it hasn't even reached their Shipping department (I normally get a Tracking mail, when it does). So Hornby want to sell direct, I think they have a few issues to resolve first.  

Seriously? your picking apart Hornby on this? they will be working through orders like any other online retailer. I've had two Hornby pre-orders come into stock this week, i got notifications and 2 days later they arrived.

Now go and look over another thread, people wait weeks for items that have arrived, some get them straight away, others are 3/4 weeks behind.

[ColinB]

18 hours ago, jonnyuk said:

Seriously? your picking apart Hornby on this? they will be working through orders like any other online retailer. I've had two Hornby pre-orders come into stock this week, i got notifications and 2 days later they arrived.

Now go and look over another thread, people wait weeks for items that have arrived, some get them straight away, others are 3/4 weeks behind.

Really, that has never happened to me, a week at the most from Rails. I have also never had a Hornby product delivered that quick and believe me I have ordered a significant amount. Perhaps they just don't like me. As to picking Hornby apart, they stated previously that they want to deal direct with the , I was just pointing out what most industries have found, it is not that easy.

[jonnyuk]

On 21/09/2024 at 16:25, ColinB said:

Really, that has never happened to me, a week at the most from Rails. I have also never had a Hornby product delivered that quick and believe me I have ordered a significant amount. Perhaps they just don't like me. As to picking Hornby apart, they stated previously that they want to deal direct with the , I was just pointing out what most industries have found, it is not that easy.

who said i was on about rails? With rails i've had two orders from them in the last 4 weeks, both took nearly a week to arrive after order, that is a down grade on service from my previous experiences with them.

in reality we all have good, ok and bad experiences with on line retailers, sometimes even with the same ones, is it luck, is it demand on the retailer at that point, more than likely.

 

As a society we have got used to the Amazon Prime model, order by 11pm and get it the next day, truth is very, very few retailers can support that model and we have to understand that. Amazon has ruined the British retail market.

Edited September 23 by jonnyuk