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.

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.

Xmas is 3 months away they could deliver you never know.

Frank Hornby celebrated in today's Google home page.

I enjoyed Fever Pitch so thanks for that SC -):

Erm ... Nick Hornby. Hmmm.

:-))

A page in this weeks Shares - Recovery takes flight.

Orders for Christmas are building.

Hornby handed worldwide license for Corgi and Scalextric-branded James Bond products, including rights to latest 007 film Spectre

By City & Finance Reporter for the Daily Mail

Published: 22:01, 5 December 2014 | Updated: 22:01, 5 December 2014


The name’s Hornby – Frank Hornby Toys, and the company tends to look after its replica cars better than James Bond cares for his real ones.

007’s all singing, all shooting vehicles are ready for the scrapheap by the time he’s seen off the villain and his henchman, with Daniel Craig as the licenced-to-kill agent.

But Hornby takes more care. And now, the Kent-based firm has landed a worldwide license for Corgi and Scalextric-branded James Bond products, including the rights to the latest Bond film Spectre, which will reach cinemas late next year.



Finger on the trigger: Daniel Craig will continue to play James Bond in the next 007 film Spectre, which will reach cinemas late next year

Corgi’s Aston Martin DB5 from Goldfinger, which starred Sean Connery as Bond, won the first toy of the year award in 1965. The next Bond film, starring Craig in his fourth outing as the special agent, will feature a special Aston Martin DB10 sportscar.

Hornby (up 3.25p at 80.25p) has evolved to include big-name hobby products such as Airfix model kits and Humbrol paints, Corgi die-cast vehicles and slot racing Scalextric.





The company said its new range of products was under development and would go on display at the London Toy Fair in January, with shipments to begin in the second half of 2015.

Chief executive Richard Ames said: ‘James Bond has been a fantastic licensed partnership for our brands going back over 50 years.’

The company said that Scalextric sets featuring 007’s vehicles were always popular with its customers.

Profit warning today.

there is an old stock market adage that says profit warnings come in 3s ..... let's hope for any holders that this is not the case here

I expect another profit warning this year.

sp~30p for Hornby looks cheap - until you read the Co statement - Oh dear!
Banking Covenants - statement due MArch2016 - let's hope they've - "got a cunning plan"
Up today - 33p mid.
EDIT (16Feb2016)- Up again, but as others have warned,--- and this does look cheap, but then it's for a Reason. . . . and until that's cleared there may be DfE dilution, so what you paid today could be much lower value.
No-one minds Co taking a loan for maybe 5-10% Equity, ( provided Management really knows what to do with it ), but DfE can be quite nasty since the Bankers have you over a barrel, Also the way I read it, they are importing these "toys", so there is little UK involvement - other one hopes at the design stage - but even that's a shame, since they are copies of "Full-size" items = like Locos.
EDIT- (18July2016)- . . . Oh deary . . . hlyeo98 - surely nobody "plays with expensive trains" – It's a nostalgia-trip and folks buy them “Because they can” ?
+++ IMHO [HRN], needs to develop software ( engines+track ) and features that you buy “on-line” - or swap with friends. Then the physical metal is for “Collectors” only until that market dries up, maybe in the next 20 years . . . HRN Pushing the old-model (ho-Ho) along is going to repeat history . . . . Another ploy would be to put Shareholder names into a hat and draw one Free Model every AGM . . this would encourage large-scale holders to attend. ( Rather than “Speculate” )....sp 28p ( I expect parity with Offer ).
EDIT(12Jan2017)- I see AGM's are at London Br ( Good), but at 9:30AM (Bad!)....also Dir has lost lots as sp fell from 99p to abt 30p... and still no "progressive" News.

today's high % rise is actually nothing fantastic in monetary terms and may merely reflect bears banking profits

From what I've heard about these I would avoid.

Nobody plays with train set in this day and age... so dated

Yet another turnaround plan by Hornby (HRN) was greeted with a mute response with the shares down 0.6% to 31.79p. It also announced an intention to raise £8 million via a placing and open offer at 27p.

Stockwatch: Recovery reveals 60% upside