Been a big follower of this company over the last few years they have excelent management and they have done very well but due to the nature of the recent markets they have fallen back to very cheap levels and now are worth a buy in my opinion. I know we have 3 historical threads on this one but they havent been used for many months. I like this report on the company today on the results its well worth a read.

Hemscott.

Hornby - Friday 3rd June 2005

It's all systems go at Hornby and another set of excellent results leaves us wondering why the shares have tailed off over the past six months. The UK market offers plenty of scope despite the consumer downturn and the model trains and racing sets maker is ready to cash in on great potential abroad, says Rodney Hobson.


--------------------------------------------------------------------------------

Hornby told investors at the end of January that Christmas trading, which is obviously a key time of year, had gone particularly well so it is no surprise that in the year to March turnover was up from 39m to 45m and pre-tax profits rose from 36.5m to 7.2m.

In line with the commendable policy of paying half of earnings per share out in dividends, the final divi of 5p takes the total to 7p, up from 6p (allowing for last year's five-for-one share split). Earnings per share rose from 12.2p to 14.78p excluding heavy amortisation of goodwill on the Lima acquisition in Italy, which took the figure down to 13.88p.

Chief executive Frank Martin stressed today that he remained confident despite the slowdown in consumer spending which, he claimed, was having less impact on the hobby market than on other sectors.

He pointed out that there had been solid growth at home and abroad before taking into account additional sales from acquisitions.


Martin said: 'Trading in our core UK market has remained robust during the year. Despite nervousness in the retail sector, our products have retained their popularity and sales have remained good. We are conscious that some retailers are reporting the impact of wider economic pressures but the hobby-based characteristics of our products lend resilience in such times and market feedback remains encouraging.'

During the year Hornby has pressed on with developing its network of concessions in other stores to 121 outlets. Sales in the concessions grew by 34% in the year and represented 15% of total UK sales. This does mean that Hornby is not heavily reliant on a few dominant retailers.

In any case, while Martin will not neglect the home market his eyes are on the acquisitions in Spain and Italy where enthusiasm for trains and racing cars is no less than here.

Hornby has exclusive rights to use images of Fernando Alonso, the Spanish Formula 1 star, and Sete Gibernau, well known to motorbike enthusiasts, on its Electrotren slot racing packaging in Spain, which apparently has more slot racing enthusiasts for size of population than any other country in the world.

In Italy, Hornby bought assets of model maker Lima from the liquidators and has shipped production out to China, where Hornby and Scalextric models are already produced. The first new Lima models will be in the shops in time for Christmas and more will be released in 2006.

It does mean that Lima will be incurring overheads before the sales revenue starts to flow. Although action has been taken to reduce costs by restructuring the Italian operation and holding down the headcount, interim profits will be depressed. Martin said, though, that profits for the year as a whole were unlikely to be affected.

The shares peaked at 280p late last year after a terrific run lasting nearly four years. We believed they were worth hanging on to at 241p after the January trading statement and we still think that was reasonable advice at the time, although they subsequently slipped further back to around 200p, where there seems to be solid support.

The recent weakness is an opportunity to buy in. The shares added 3.5p to 216p this morning.ENDS.

If you look at the figures you will see that the company is on a very low rating of P/E 14.6 which is very cheap for this company. At present I do not have a forward P/E but will try to get one.

Well worth a dabble.

Please DYOR.

cheers GF.

cheers GF.

LONDON (Reuters) - Hornby pinned its hopes on Batman spin offs and Spanish model car racers on Friday as it posted a 16 percent rise in year profit.

It also said its model-enthusiast customers could bolster it through the current consumer slowdown as they cut back on buying big things like cars and houses, but held true to their hobby.

Hornby said it was now focusing on overseas expansion, particularly in Spain, the world's largest per capita market for toy car racing tracks like its own Scalextric.

"They're very, very passionate about slot car racing -- very much into their club race nights and modifying cars," Finance Director John Stansfield told Reuters.

Hornby gained a foothold in Spain this year through its acquisition of the family-run Electrotren business.

"The Spanish slot car market is worth around 20-25 million euros, of which we have around 1.5 million euros, but I think as a target we can move to 5 million euros over 2 or 3 years," Stansfield added.

Hornby said it had agreed a marketing deal with Spanish Formula 1 star Fernando Alonso. A new Batmobile and Gotham City police car will be launched to coincide with the upcoming Batman movie, he said.

ROBUST HOBBYISTS

Profits before tax and goodwill amortisation were 7.5 million pounds in the year to March 31, said Hornby.

The group plans to expand into Europe through its businesses in Spain and Italy, where it recently bought model car and railway firm Lima Group.
Hornby said that while some retailers were reporting a slowdown in consumer spending, market feedback was encouraging.

"Looking forward, we are confident that despite a slowdown, our core hobbyist market place will remain robust," Chief Executive Frank Martin said in a statement.

Stansfield said that sales slowed in May and April, but on a like-for-like basis, they were still up on last year.

"There is a possible train of thought that people cut out the big chunks, they're not moving house as much, and potentially, on average, for some people that could actually release money," he said.

"When it's your hobby, and it's not mega-expensive, when something new comes out, as a collector, you're keen to have it."

Hornby said it was hopeful for its new digital systems that allow cars to switch lanes on the racetrack and overtake each other.

"Scalextric Sport Digital looks set to become the system of choice for the industry going forward," it said.

Hornby shares were flat at 212-1/2 pence by 0820 GMT, valuing the group at around 79 million pounds.

The total dividend was increased by 17 percent to 7 pence per share.

cheers GF.

From Citywire.............

Hornby: next stop Europe

Published: 10:14 Friday 03 June 2005 By: Algernon Craig Hall, Secret Buying Correspondent


Hobbyists continue to buy Hornby's model trains and its Scalextric slot cars despite weakness elsewhere on the high street and Europe beckons.

Worries about how the hobbyist market would take the high street slowdown following a warning from Games Workshop earlier this year were brushed aside by Hornby (HRN) today.

Finance director, John Stansfield, told Citywire: 'There are many similarities between us and Games Workshop but they moved into Lord of the Rings which was a short term thing we haven't had a Lord of the Rings, we've just had steady growth.'

Continued steady growth was evident in the company's numbers for the year to the end of March which were published today. Turnover rose 15% to 45 million and profit before tax and goodwill amortisation charges rose 16% to 7.5 million. The performance was reflected with a 17% increase in the final dividend to 7p.

Following another successful year's trading the group's plans are to invigorate its international operation, which was boosted last year by the acquisition of model train companies Electrotren in Spain and assets of Lima Group in Italy.

Sales in Spain, which is the world's largest per capita slot car market, will hopefully be boosted by distributing of slot car through Elecrotren and increased spending on promotions and marketing. The Group has exclusive right to use images of Spanish Formula 1 star Fernando Alonso and MotoGP motorbike rider Sete Gibernau.

However, the really exciting opportunity is Lima, which has market leading positions in Italy and France and a strong position in the large German toy train market. Manufacturing is moving to China to improve efficiency and the group will start distributing slot cars to Lima's markets. The operation is expected to make a loss in the first half but break even in the full year.

Stansfield said: 'It's a different scale to Hornby which is a UK brand we have a platform to sell to Europe.'

The group is embracing digital technology and says its Scalextric Sport Digital has been well received and looks set to become the system of choice.

The number of concessions has been increased by 10 during the year to 120 and the stronger distribution should make Hornby more resilient to retailer's demands for lower prices.

Scalextric USA, which distributes a number of European slot car systems in the US, was the only part of the business that did not do that well during the year. The weak dollar hit sales and margins.

Citywire Verdict:

Recent trading looks encouraging, although as long as the retail market remains weak worries are likely to persist.

The opportunities in Europe are exciting but this year will be largely concerned with laying the groundwork. The financial rewards should come from 2006 onwards.

Stansfield says he is comfortable with profit forecasts for this year of 8.5 million to 8.6 million. The shares are down 2.5p at 210p and all in all the group looks solid hold.

House broker Altium has advised clients to buy shares on weakness and has increased its recommendation from Hold to Add.

cheers GF.

Now they are starting to move up.

cheers GF.

Going like a train now.

cheers GF.

Positive again. Looks like the post results cob webs have finally been removed.

cheers GF.

Looking very strong. I told you so LOL.


Cheers GF

GF,new products soon for scalextric,i here there`s a film out june 16th,,,dunner,,dunner,,dun
ner,,dunner,,dunner,,dunner,,dunner,,dunner,,,batman.

Absolute give away when it was 1.90 all the same..

No cash, but it does look nice. I would like to have a seat on this train.

And up again she goes.

cheers GF.

Hadn't you better stop ramping now goldfinger?

goldfinger i bought @2.42 feb 05 are we goiing to see a harvest by october.? also does any one have any thoughts on european nickle?

regards cw

Always been a kid at heart, so in I go,

This share now looks cheap for a well managed business.......
I intend to get in big at 188p

I bought 50000 HRN shares recently and couldnt figure out why the trade wasnt being reported on Money am
I then discovered that Hornby shares are being traded on two exchanges Sets and Plus net http://www.plus-trading.co.uk/details.shtml?ISIN=GB00B01CZ652
this means you have to monitor plus net to examine all the trades in real time
Incidentally it also provides a way for Sellers to dribble away their holding of shares ..........which my Broker told me was what was probably happening in my case........somebody has had a a large unfulfilled sell order on HRN for several weeks

Yes goosy it rather complicates things. Im sure in time they will be a big recovery story. At the moment out, but on the hot stock watch list.

cheers GF.

Last week I tried to order different items online from the HRN website only to find there was no stock
Does this suggest a good Xmas or just poor stock control ?

I suspect it could be poor stock control (unfortunately).
Post Christmas my local branches of Boots and WHSmith have been selling mini-Scalextric sets very cheaply to get rid of stock. The local department store (a very big one with a Hornby concession shop) has lots of locomotives and Scalextric cars going cheap whilst the local branch of a well known model retailer has big discounts on Hornby items (and very big discounts on limited edition items that were very expensive to start with).

Now back in.

Hornby on track
MoneyAM
Hornby expects FY profits before IFRS adjustments to come in broadly in line with expectations.

The model railways group said strong sales in Europe offset a drop in the UK.

The maker of Scalextric also said pre-Christmas trading was more difficult than in previous years.

'This had the effect of depressing sales of both Scalextric and Hornby sets,' it said in a trading statement.

'However, sales of hobby accessories performed well, particularly in the model railway sector.'

It went on: 'The beneficial impact of the acquired businesses in Spain, Italy and France is expected to offset partially the effects of lower sales in the UK. As a result of this, the company expects to achieve full year profits prior to IFRS adjustments broadly in line with market expectations.'


cheers GF.

With similar results to last year but more strategic options in place .....hrn should now power towards a new high by the year end in March
eg min size to buy 1500
minsize to sell 15000
Hooray