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.

Turnover for the year up 1.7% to £64.4 million (2011: £63.4 million)

· Underlying profit before tax* of £4.5 million (2011: £4.4 million)

· Reported profit before tax of £4.0 million (2011: £4.1 million)

· Statutory basic earnings per share 8.19p (2011: 7.50p)

· Total dividend of 3.7p per share (2011: 5.0p)

· Sales of London 2012 merchandise growing strongly

· New license win with Moshi Monsters for a range of pin badges and die-cast vehicles

· Star Wars Scalextric launched this year

· New products associated with 'Olly the Little White Van' and Corgi 'Toys' developed

· Net debt £6.3 million (2011: £6.1 million)




http://www.moneyam.com/action/news/showArticle?id=4384605

http://www.dailymail.co.uk/money/markets/article-2156601/Hornby-steams-ahead-Europe-snaps-toys.html

Loadsa ....... looking very interesting.

"Importantly, we continue to introduce more merchandise associated with the London 2012 Olympic Games. We expect these product lines to perform well as we get closer to the games."

Very bullish presentation.

Think its time or near abouts to remove it from Bearish Trending Charts on Chart Attack.

Hmm just checked the chart and cant take it off just yet or Id be cheating and breaking the thread rules. But i think Ill buy myself some after clarity over greek elections next sat/sunday.

http://www.iii.co.uk/articles/38886/stock-watch-hornby

Couldnt help it was tempted by HORNBY at the death today. Cheap going forward fantastic last RNS outlook statement. Olympics boost.

Brokers on side...... Forward
P/E of just 6.7 to 2013.

Cheap as chips.

Hornby PLC

FORECASTS WIRES 2013 2014
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

W H Ireland Ltd [W]
08-06-12 BUY 6.40 11.60 5.80 6.90 12.60 6.30
Numis Securities Ltd
08-06-12 BUY 6.20 11.70 4.80 6.10 11.60 5.10
Merchant Securities Limited [W]
11-11-11 HOLD

2013 2014
Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

Consensus 6.20 11.70 4.80 6.10 11.60 5.10
1 Month Change -0.30 -0.50 -2.20 0.00 0.00 0.00
3 Month Change -0.30 -0.30 -2.20 0.00 0.00 0.00


GROWTH
2012 (A) 2013 (E) 2014 (E)
Norm. EPS 8.41% 44.09% -0.86%
DPS -25.37% -4.00% 6.25%

INVESTMENT RATIOS
2012 (A) 2013 (E) 2014 (E)

EBITDA £m £m £m
EBIT £m £m £m
Dividend Yield 6.33% 6.08% 6.46%
Dividend Cover 1.62x 2.44x 2.28x
PER 9.73x 6.75x 6.81x
PEG 1.16f 0.15f -7.97f
Net Asset Value PS p p p

http://www.investegate.co.uk/Article.aspx?id=201206080700089453E



Frank Martin, Chief Executive of Hornby, commented,

" Despite the backdrop of a challenging market, Hornby is making encouraging progress. Our ability to broaden our product and distribution base will enable us to mitigate to some extent any short term weakness in our traditional hobby sectors. We are pleased that sales of our London 2012 merchandise are gathering momentum. We expect this unique license opportunity to contribute positively to profits in the short term and, through the increased distribution that we gain as a result of our involvement with London 2012, to provide an ongoing legacy benefit in substantially increasing our presence in mass market retail outlets.



" In order to benefit from this increased presence following London 2012 we have developed a number of new ranges with entry-level price points ranging from £2 to £9.99. The first of these ranges is a series of collectable pin-badges based on the Moshi Monsters license.



" There is no doubt that there will continue to be pressure on consumer confidence for some time to come. However we continue to innovate and to seek new commercial opportunities in order to counter the effects of the macro-economic climate in which we are operating."



-ends-

Interesting tip.......

http://www.iii.co.uk/articles/38886/stock-watch-hornby

Moving up nicely.

Nearly 4% up on the day already.

Olympics should boost this companys
sales and thet got some cheapo trinkets
at affordable prices under a tenner.

HRN HORNBY..

lets put some SP targets
to the Brokers BUY notes.....

Hornby Broker Views

Date Broker Recommendation Price Old target price New target price Notes

11 Jun WH Ireland Securities Buy 81.50 135.00 135.00 Reiterates
08 Jun Numis Buy 81.50 108.00 108.00 Upgrades

Yes rather strange day yesterdays trading. Looked like I was going to be in profit with an hour to go and then out came what I see as stale bulls to spoil the party.

Cant be that many left now and the shorting on the stock is minimal.

So I look forward with confidence but certainly aware of consumer spending overal in a dip but maybe this £2 to £10 cheap range might do tthe trick and turn the stock around. fingers crossed.

Good read, just taken off twitter..

http://www.investortrader.co.uk/06-2012/hornby-and-the-london-olympics-2012?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+InvestorTrader+%28Investor+Trader%29

Moving up nicely today and recovery intact.

Aye. I bought a few yesterday. Couldn't quite get as many as I wanted which was nice!

BTW I'd be wary of that Twitter comment - don't think he's the greatest trader/investor.

LOL yep I have had my doubts for a while. Did have a kick back earlier today he he,

When brokers say buy in June, it meant SELL.


Profit warning.....

Models maker Hornby said the overall business performance is being adversely affected as macro-economic factors continue to depress consumer spending.

Sales of London 2012 merchandise were lower than forecast. Whilst, prior to the Games, major account listings for our products were strong, and consumer purchases were encouraging, the major retailers had also purchased substantial quantities of London 2012 merchandise from other licensees. Faced with lower than expected sales, the major retailers resorted to deep price discounting. The consequence of this for Hornby was that retailers lost confidence in many categories of London 2012 merchandise, and repeat orders for products were cancelled.

In the Trading Update dated 26th July 2012, hornby indicated that one of its significant suppliers in China had informed it of plans to rationalise its manufacturing facilities and that this may result in disruption to shipments. This process is ongoing and it is now clear that the disruption to supplies for the remainder of the financial year will be substantial.

In view of the above, the Directors now believe that the Group will not achieve its forecasts for the current financial year and, therefore, anticipate that the Group's results will be approximately break-even for the financial year ending 31st March 2013.

The group continues to benefit from a strong balance sheet. Net Debt at 31st August 2012 was £7.8m compared to £14.3m a year earlier.

Against a backdrop of continued depressed consumer spending, a combination of lower than expected sales of London 2012 merchandise and the supply chain disruption referred to above the performance of the Group will be constrained significantly in the current financial year. Looking forward, whilst working closely with our existing vendors in China we continue to develop additional capacity in alternative sources of supply.

Well I did warn in January

Me too in January... intelligent minds think alike.

I sold mine in Aug as I thought the stock quality was cr@p and too expensive (and I made a small profit). Not sure if the management are up to it if they allow such rubbish to be produced.

Shares in Hornby fell more than a third on Tuesday after the maker of model train sets issued its third profit warning of the year.

The owner of the Scalextric, Airfix and Corgi brands warned that an expected sales boost from the Olympic Games had failed to materialise, as cash-strapped consumers shunned its London 2012 models that included black taxis, double-decker buses and a Team GB cycling velodrome racing set.

“Faced with lower than expected sales, major retailers resorted to deep price discounting,” the group said.

“The consequence of this for Hornby was that retailers lost confidence in many categories of London 2012 merchandise, and repeat orders for our products were cancelled.”

Hornby shares fell 32½p or 37 per cent to 56p in morning trading in London, the lowest level in more than a decade.

Kent-based Hornby also warned that the decision by one of its biggest suppliers to close several factories in China and the resulting supply chain disruption would wipe out the group’s profits this year. It said it would now only break-even for the 12 months to the end of March 2013; last year the group reported pre-tax profits of £4m.

Full-year revenue forecasts were also cut from £64.5m to £59.1m as the group said it was looking to further diversify its manufacturing base in India and China.

“The disruption is part of a painful process but we believe that, working with all our suppliers, we will be able to work through this process to arrive at a more balanced supply base for the future,” Hornby said.

“It is now clear that the disruption to our supplies for the remainder of the financial year will be substantial.”

Andrew Wade at house broker Numis, who put his guidance on the stock under review, said he saw potential for the supply disruption to persist next year.

Hornby – which makes high-end train sets that sell for as much as £275 – has responded to the financial crisis by introducing a series of lower-price ranges, and broadening its appeal with, such as toys based on the popular children’s television series Olly the Little White Van, as well as a Star Wars-themed range of Scalextric racing sets.

Management seems to have lost the plot. Which of their offerings is unique these days? Only the traditional train products and they are now punted out by Chinese guys on piece work. Not inspiring at all. As always with a company that loses sight of its core competence, it ends up pear shaped. Tempted to short even at this level.