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.


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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.

Why didnt I buy at 207p....?
This share is heading for 250p before the divi is paid in August........

Goosy you still might be able to get it a little cheaper if the present overall market conditions prevail.

GF

The sp has been unaffected by the market slump of 10% over the past month
Just shows how tight the "free" market actually is
Some big trades today around 230p............Can`t believe they are buying from funds with the ex divi date in July...funds like the cash coming in
Could there be a new big buyer on the reservation ?

Hornby has smashed through previous resistence levels on heavy volume, time to buy.

Skreen
Looks like you are right and the sp is now motoring at a rate of knots....Any ideas on the next resistance level and if a bid may be looming...?

Looks like we are teetering on the brink of a breakout to 260p - 270p another bullish statement or even no xmas cautionery note in the next month or so and we could be there ...

Yup looks very interesting at the moment. Higher price could be well on the way especially leading up to xmas.

Re previous post 22....
Given the conservatism of the Chairman`s past announcements it is most unlikely that the recent german acquisition was in his calculation when he said that he saw the UK Market representing a minority proportion of the business in future years........and given the potential of the german market..this makes that statement even more credible.......
DYOR

Looking rather strong.



Forward P/E of 13.9 to 31st march 2008.

Holding its own on a bad day for small caps.

Looks like its breaking out.

Hornby profits slide
MoneyAM
Hornby said pretax profits for the first half were 1.4m, compared with 2.5m a year ago.

The international models and collectibles group said this was due to lower sales in UK.

It declared an interim dividend of 2.5p per share, up 9% from a year earlier.

Hornby confirmed press reports it has acquired certain assets of Humbrol Ltd, including the Airfix model kit business, out of administration for 2.6m in cash.

'We expect this acquisition to be broadly earnings neutral in the current financial year, but to be significantly earnings enhancing thereafter,' said Neil Johnson in his review as the company announced its results for the six months to September 30th.

The company expects 'significantly stronger' performance in the second half of the current financial year.

The acquisition of Airfix etc. should keep this down for a while. It may even see increased pressure on it.

A temporary kick in the teeth, no more than that.

Clairvoyant post GF...........as we target 280p

UK smallcap opening - Hornby runs back on disappointing FY numbers
AFX


LONDON (Thomson Financial) - Hornby ran back 11 pence to 275 as the international hobby products group delivered disappointing full-year numbers. Management is confident of improving results in the coming year, aided by a wider spread of activities.

However, Altium Securities anticipates cutting estimates for 2008 and beyond and, as a result, has provisionally reduced it target price to 250 pence from 315 and its recommendation to 'reduce' from 'add'.

tf.TFN-Europe_newsdesk@thomson.com

176p now...in bad times, who would want to spend money on these toy trains???
SELL now.

Altium has reduced Hornby's target to 150p from 200p. Sell now.

Results to March 2008 out today and I have bought at 169p.The model business (these are not toys) has been shown to be quite resilient historically in difficult economic times and it is not as seasonal as might be imagined (approx 60% sales in second half i.e over Xmas period). HRN looks sensibly managed, it is growing steadily, has strong cash flows from operations, negligible debt and yield on increased dividend over 5%. Maybe not for traders, but I am happy to lock some away for a few years at this price.Always DYOR