I'm not sure if anybody else picked up on this article today ...
http://www.bbc.com/news/business-35538800 (http://www.bbc.com/news/business-35538800)
I visited a model shop a few days ago and had a lengthy discussion with a very friendly staff member about the manufacturers of the past (mainly continental) and how they operated their distribution systems and obtained their financing ... and also how they eventually weren't able to succeed. He seemed very knowledgeable and said he'd met many if the then family owners in person. It was most fascinating.
The discussion seems most timely now that I read the above. I wish Hornby all the best and here's to hoping they can pull out of this one.
The article mentions that they've broken their banking covenants, which isn't good. Amended to read: Hornby said it was now in talks with its lender, as the scale of losses could see the firm breach its banking agreements.
Daniel
Hmmm, I hadn't noticed - they seemed to be doing great until 8:05 though ;)
Quote from: DesertHound on February 10, 2016, 03:15:19 PM
The article mentions that they've broken their banking covenants, which isn't good.
Naughty - it says "may",
not that they have ...
I do wonder what branch of the company has "screwed the pooch" ... that would let us know more on whether the brand is under threat, or if it's more likely they'll try & divest themselves of the loss area.
But to an extent, they have themselves to blame : closing the old locations to get into nice pretty new buildings (expensive !), losing some staff because of this move, and ditching a bunch of staff as well (eg the old Collectors Club people, now they've replaced something decent with a smelly pile of :poop:).
Thanks for keeping me honest Mike - that was rather naughty, if most unintended, of me. Above opening post amended to clear that one up.
It's either a real struggle these days to operate out of the UK in this business (not manufacture), or legacy costs might have caught up with them. Seems like you're more informed as to their recent history than I am.
Are we getting to the point where producers will almost come under the "cottage industry" category (and by using that term I do not mean it in a derogatory / amateur sense). After all, Hornby is a public listed company, with all the associated costs that go with it.
Are we about to see BachHornby? :'(
Quote from: DesertHound on February 10, 2016, 04:26:16 PM
Thanks for keeping me honest Mike
You are forgiven, my son ... :nerner:
Quote
Are we getting to the point where producers will almost come under the "cottage industry" category
Well ... let's be honest : Hornby aren't a particularly big company. Even though they've bought various other (European) model rail brands, as well as Corgi, Airfix, Humbrol etc - they are hardly in the scale of say Hobbico (owners of Revell - and interestingly a 100% employee-owned company; they have an
impressive range of brands !).
Now - if Hornby was able to go private again - who knows how they would do, without the stock market beating them up regularly ...
Quote
Are we about to see BachHornby? :'(
I doubt it :laughabovepost: Why would Bachmann want to to buy Hornby while they have their own (better ??? In some ways, yes) model rail company that's doing OK ?
My impression of Hornby is that they have completely lost their way. After parting with Simon Kohler they seemed to put people in charge who know nothing about model railways. This is my view after meeting a couple of them.
They have stopped sending samples to magazines for review and upset model shops by selling stock on their web site at prices below the price they charged the shops.
Let's hope they get their act together.
Chris - that'll be because they have lost their way ...
The company is run by bean counters & marketing people - they don't care about the hobby (either ours or the other "brands" they deal in), it's all just a commodity to them.
Now that today's markets have closed, it's interesting to see there is over a 60% drop - and also interesting to see a 10pps rise & drop too shortly before close ... wonder what happened there ... :hmmm:
Thanks for that Mike. Maybe I have visions of them being bigger than they are due to their heritage and all. Okay, I wasn't thinking BP or BT proportions ;D but they had a turnover of over £51m last year (wikipedia) and a quick bit of digging brought up an article saying they moved 150 staff to their new headquarters last year. That number of UK staff is quite an overhead.
I wonder how many staff Bachmann have in the UK (and how many would be Farish) and how many Dapol have.
I do understand though that Hornby have their fingers in many pies, nit just model trains. Seems they do well when they ride on the coat tails of Harry Potter or some other high profile event, but otherwise it seems to be a struggle for them.
My belief (and it's only mine mind) is that their future lies either in private hands, away from the pressures of the stock market, and some of the short-termism that can bring) or under the umbrella of a larger group, in which case they would be hollowed out yo just another brand.
I really hope I'm wrong though.
What say you Mike? ... and others.
Dan
Thanks Chris / Mike
Interesting thoughts and exactly what i was discussing with the chap in the model shop the other day who'd "been in the business" for 40 years. Told me that he's seen many family businesses which were passed on into the wrong hands.
Your last comment about the volatility in the stock price at the end if the day does intrigue me Mike :hmmm:
Quote from: DesertHound on February 10, 2016, 05:04:37 PM
That number of UK staff is quite an overhead.
LOL, glad you don't work for my company then !!! :no: We have quite a few thousands in the UK :D
QuoteI wonder how many staff Bachmann have in the UK (and how many would be Farish)
Not very many ... a few dozen, maybe 20% Farish ? We
allegedly have someone working for them on the NGF - maybe he could give a number here, rather than we guess ?
Quoteand how many Dapol have.
Even fewer would be my guess ...
QuoteSeems they do well when they ride on the coat tails of Harry Potter or some other high profile event, but otherwise it seems to be a struggle for them.
The Olympics was a bloodbath for them ... mind, looking at the quality of their product, it's hardly a surprise (except to Hornby !) :no:
Quotein which case they would be hollowed out yo just another brand.
That's all they seem to be under current mgmt though :hmmm:
One thing made me chuckle - one of the Directors last year bought £2.6M shares @ 95pps ... I bet he's having kittens ::)
Mike
Quote from: MikeDunn on February 10, 2016, 05:22:56 PM
One thing made me chuckle - one of the Directors last year bought £2.6M shares @ 95pps ... I bet he's having kittens ::)
Mike
Why would he do that? To me that seems odd, knwoing this whole stock market runs on trust it seems he's trying to make the market confident because he's chucked a lump sum in...
Of course this is speculation and opinion.
They certainly have made some strange marketing decisions, an example being a Downton Abbey train set. It has a 0-4-0 loco and two of those short coaches.
If the set is to be used then I can't see children being interested in it, most of them won't have watched the programme. If it is for the Downton Abbey collector's market would it appeal? They would have paid a fortune for royalties, it makes no sense to me.
Closed 61% down.
Not looking clever is it? :thumbsdown:
They have done well (according to their own figures) in 2015. However they borrowed £0.2m, whilst much better than 2014 for them it still isn't entirely the right direction.
Still, nothing can be ruled out and tomorrows trading will show whether it was the market or the confidence in the brand.
It's curious that the company doesn't understand that if you spent a fortune in November and December (up 17%), then sales in January will be down. Seems like common sense to me.
I bet with your few thousand UK staff you pull in more than 50 mil though Mike - rhetorical question so please dont feel the need to get drawn into soecifics on a public forum :D
I make Hornby's £50m in revenue equate to £333,333 per head office employee. I dont know about the economics of their business so pure hyperbole on my part but after marketing, production, logistics, warehousing costs etc. etc. to me 150 employees seems a lot. That said, if they had of gotten their strategy right, 150 employees mightn't seem so many since the revenue would have been so much greater.
You guys seem to know much more about it than me. I just cant help thinking its becoming such a limited opportunity for capital to make a return on these days and hence the use of the term "legacy cost" in a previous post. The new kids on the block are set up differently, seem to me to operate on a much slimmer model (headcount wise) and so perhaps this is the only way the industry can survive. Of course we also have the crowd-funding element too.
I'm enjoying the debate on this one - thanks for the info.
Dan
Well, my company (another way of looking at it : the company I work for ::)) did substantially better than that ;) The joys of large IT, eh ?
Quote from: Malc on February 10, 2016, 06:08:57 PM
It's curious that the company doesn't understand that if you spent a fortune in November and December (up 17%), then sales in January will be down.
I think the phrase used was along the lines of "promotions" rather than sales ... it's not people like us not buying; it's
retailers not restocking as fast as Hornby want them to. Which maps in quite well with the displayed stock in my local model rail store last week-end; there are usually 2-4 good piles of Hornby sets out (one still in delivery boxes, the rest out as retail sales) - I think I counted 8 Hornby sets where there are normally a couple of dozen, and maybe the same again under the model railway they have running (again, normally a couple of dozen).
But if you want to see what is likely the main problem there : read the bios of the directors & ask yourself "that do these guys know about this market ?" ...
If it falls any more , ,
Tomorrow's news :
DJM mount takeover bid for Hornby.
:bounce:
My local shop had to "heavily discount" their last blue grey Brighton Belle, it "hung around on the shelf for ages".
Quote from: MalcolmAL on February 10, 2016, 07:34:23 PM
Tomorrow's news :
DJM mount takeover bid for Hornby.
:bounce:
LOL
Got £18M in his back pocket, has he ::)
Quote from: Dorsetmike on February 10, 2016, 07:45:50 PM
My local shop had to "heavily discount" their last blue grey Brighton Belle, it "hung around on the shelf for ages".
Mine still has theirs for £200 ... I think they're resigned to it never selling.
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
But actually, the FTSE was up today (0.7%) as Hornby was plunging still :( :laugh3:
Quote from: MalcolmAL on February 10, 2016, 08:50:49 PM
But actually, the FTSE was up today (0.7%) as Hornby was plunging still :( :laugh3:
Indeed.
Hornby's problems are a lot larger than the issues facing China; granted, having the majority of their manufacturing over there doesn't help them, but neither do factors a lot closer to home ... as can be seen by the potentially disasterous reaction the markets had today.
Quote from: MalcolmAL on February 10, 2016, 08:50:49 PM
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
But actually, the FTSE was up today (0.7%) as Hornby was plunging still :( :laugh3:
Along with major company's such as the likes of BAT, Sainsbury's , Sky etc.
Quote from: MikeDunn on February 10, 2016, 09:07:13 PM
Hornby's problems are a lot larger than the issues facing China; granted, having the majority of their manufacturing over there doesn't help them, but neither do factors a lot closer to home ... as can be seen by the potentially disasterous reaction the markets had today.
Tell me about it I'm not having a good time myself, should have offloaded IAG back in December. January took a lot of people by surprise! :( ::)
Quote from: Mr Sprue on February 10, 2016, 09:19:38 PM
January took a lot of people by surprise! :( ::)
Yeah ... fancy it suddenly arriving after December ! :doh:
(Sorry, couldn't resist !!! :P)
Quote from: Mr Sprue on February 10, 2016, 09:19:38 PM
Tell me about it I'm not having a good time myself,
Tell me about it too :( I was going to repatriate some stuff from offshore ( yes really !) before the end of March, dont think things are going to recover in time to make it worth my while this year :veryangry: :'( :censored:
Quote from: MikeDunn on February 10, 2016, 08:00:10 PM
Got £18M in his back pocket, has he ::)
It's like ladies and their age, a gentleman would never ask a mogul of industry what he is worth ;)
But you missed out the bit where I said " If it falls any more " :laugh:
Speaking of Moguls, in N ?? :)
Quote from: MikeDunn on February 10, 2016, 09:29:12 PM
Quote from: Mr Sprue on February 10, 2016, 09:19:38 PM
January took a lot of people by surprise! :( ::)
Yeah ... fancy it suddenly arriving after December ! :doh:
(Sorry, couldn't resist !!! :P)
Ha Ha! Yeah ok....... ::) :P to you too!
The falling price of crude is affecting all shares, investors pulling out of crude are looking for elswhere to invest, that's bringing share prices down across the board.
It's a common trend affecting all business, Man Utd's price has fallen by 22.5%, knocking over £320m off the stock value of the club.
Hornby are also sufffering from putting all their eggs in the Chinese basket, workers are demanding higher wages so that they can afford to purchase the goods they are churning out for the West, this is increasing their costs.
Amongst other things Hornby failed to give us a prize for our raffle at last years exhibition, as did Bachmann, the onlu major supplier who did was PECO, who gave us a Hornby loco !
Without getting bogged down into the whys and what-ifs of the Hornby business having financial problems, I just wanted to say that I hope they manage to sort it out.
As a OO gauge traitor 'dabler' I have a couple of hornby locos and I am very impressed with the quality. It would be a shame to lose this. More to the point it would be a greater loss to see UK Hornby employed staff lose their jobs and security and not to mention the distributors, other allied companies and model shops who would also be hit.
Let's hope they recover and anyone involved in Hornby keeps their jobs.
Best of Luck Hornby.
I can't see hornby disappearing completely the name is too well known to disappear, they would be open to a takeover or even yet another merger, when you think of the brands they own the opportunity to buy out the company would be too good to miss for someone.
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
Except today the FTSE100 went up. Don't be confused by a general downward turn because of china compared to the collapse of a company as we see with Hornby today.
Quote from: Nik96 on February 10, 2016, 11:28:23 PM
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
Except today the FTSE100 went up. Don't be confused by a general downward turn because of china compared to the collapse of a company as we see with Hornby today.
The FTSE rose on the day .71% and is still way below what it was last Friday, despite todays small rise the trend is still down over the previous 5 days trading. Suggesting are it could level out now that crude prices seem to have stabilised, but if countries continue to buy less oil, as they will during the spring and summer months, the trend could be to further falls.
Some experts are suggesting that eco and renewable fuels are starting to hit oil prices, as is America's reliance on fracking which means they need less automotive fuels from the global markets.
Quote from: Only Me on February 10, 2016, 11:04:13 PM
Just be thankful lads that if it goes pop our only loss is the Belle... What will the Orribly Oversized gang do!!!!
:laughabovepost:
I had not thought of it like that, nice(?) one :) !
On the other hand - our model railways are built on dreams and we had the dream that Hornby might, with Arnold, the Belle etc be on the brink of doing great things in N,
this has perhaps shattered that wee dream ?? **
My daughter is blaming me for not having bought anything from Hornby ,,
since they discontinued the 3-rail :( !!
** or maybe they are about to announce a vast new venture into N and the insiders got wind of it and sold, sold , sold ? :laugh3:
Quote from: Graham Walters on February 10, 2016, 11:38:31 PM
Quote from: Nik96 on February 10, 2016, 11:28:23 PM
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
Except today the FTSE100 went up. Don't be confused by a general downward turn because of china compared to the collapse of a company as we see with Hornby today.
The FTSE rose on the day .71% and is still way below what it was last Friday, despite todays small rise the trend is still down over the previous 5 days trading. Suggesting are it could level out now that crude prices seem to have stabilised, but if countries continue to buy less oil, as they will during the spring and summer months, the trend could be to further falls.
Some experts are suggesting that eco and renewable fuels are starting to hit oil prices, as is America's reliance on fracking which means they need less automotive fuels from the global markets.
The market naturally fluctuates up and down dependent on a whole range of things. The point you seem to be missing is Hornby's price of shares has crashed at 60%. The FTSE has not crashed in its overall value anywhere near this value. You must know that one companies share price has little overall effect on the FTSE but the overall FTSE has a greater effect on a companies price.
You say the general trend is downwards over the last five days. You're correct but the percentage change between 4th and 10th of February is a whopping 4.13%. Still nowhere near hornby's crash of 60%.
This appears to be the point that is missed at the moment.
Three companies in the FTSE 100 were also mentioned and have shown you the percentage decrease of each share price from today.
BAT Down 1.18%
J Sainsbury Down 0.91%
BSKYB Down 0.36%
All three of those mentioned companies are down a fraction of what they started. This won't cause much alarm to other traders as they see these percentages everyday.
Hornby Down 60%
Well this companies traders have lost confidence, they have all sold they're investments so the price drops to encourage new investors. Except more investors have become unsure and it has dropped even more and now because it has dropped so much it's a high risk of losing more. Now the basics are call (buy) low and put (sell) high.
Today's biggest mover up was Prudential with a whopping 4.40%
Today's biggest mover down was Antofagasta down 3.04%
And these are the two biggest movers in the FTSE 100, Note Hornby isn't on the FTSE 100 but is traded in London.
So our 0.7% is calculated on all the companies between 4.4% growth and 3.04% decline. SO Hornby's crash (partially caused by a warning on profits put out yesterday) hasn't affected the FTSE100 but has greatly affected it's own share price.
In Conclusion, your "well below" is actually 4% below in the last five days, Hornby is not greatly affected by the price of crude despite most of the models being made of plastic of which crude is a big player. Also the americans will start taking their RV's out as it warms up and that causes a suck in fuel to move them so the price should pull up slightly during the summer. Finally your last point experts suggest eco and renewable fuels are hitting oil. Can you point out this article to me please, are they petrochemical experts or money experts?
Quote from: Nik96 on February 11, 2016, 12:15:17 AM
Quote from: Graham Walters on February 10, 2016, 11:38:31 PM
Quote from: Nik96 on February 10, 2016, 11:28:23 PM
Quote from: Mr Sprue on February 10, 2016, 08:36:18 PM
Since the New Year pretty much all shares have been affected because of whats happening in China, along with mining stocks prices of oil and commodities all have taken a tumble as well.
So Hornby is not alone!
Except today the FTSE100 went up. Don't be confused by a general downward turn because of china compared to the collapse of a company as we see with Hornby today.
The FTSE rose on the day .71% and is still way below what it was last Friday, despite todays small rise the trend is still down over the previous 5 days trading. Suggesting are it could level out now that crude prices seem to have stabilised, but if countries continue to buy less oil, as they will during the spring and summer months, the trend could be to further falls.
Some experts are suggesting that eco and renewable fuels are starting to hit oil prices, as is America's reliance on fracking which means they need less automotive fuels from the global markets.
The market naturally fluctuates up and down dependent on a whole range of things. The point you seem to be missing is Hornby's price of shares has crashed at 60%. The FTSE has not crashed in its overall value anywhere near this value. You must know that one companies share price has little overall effect on the FTSE but the overall FTSE has a greater effect on a companies price.
You say the general trend is downwards over the last five days. You're correct but the percentage change between 4th and 10th of February is a whopping 4.13%. Still nowhere near hornby's crash of 60%.
This appears to be the point that is missed at the moment.
Three companies in the FTSE 100 were also mentioned and have shown you the percentage decrease of each share price from today.
BAT Down 1.18%
J Sainsbury Down 0.91%
BSKYB Down 0.36%
All three of those mentioned companies are down a fraction of what they started. This won't cause much alarm to other traders as they see these percentages everyday.
Hornby Down 60%
Well this companies traders have lost confidence, they have all sold they're investments so the price drops to encourage new investors. Except more investors have become unsure and it has dropped even more and now because it has dropped so much it's a high risk of losing more. Now the basics are call (buy) low and put (sell) high.
Today's biggest mover up was Prudential with a whopping 4.40%
Today's biggest mover down was Antofagasta down 3.04%
And these are the two biggest movers in the FTSE 100, Note Hornby isn't on the FTSE 100 but is traded in London.
So our 0.7% is calculated on all the companies between 4.4% growth and 3.04% decline. SO Hornby's crash (partially caused by a warning on profits put out yesterday) hasn't affected the FTSE100 but has greatly affected it's own share price.
In Conclusion, your "well below" is actually 4% below in the last five days, Hornby is not greatly affected by the price of crude despite most of the models being made of plastic of which crude is a big player. Also the americans will start taking their RV's out as it warms up and that causes a suck in fuel to move them so the price should pull up slightly during the summer. Finally your last point experts suggest eco and renewable fuels are hitting oil. Can you point out this article to me please, are they petrochemical experts or money experts?
Point taken, but as I stated in a previous post other companies have taken a big hit, Man Utd have suffered a 22% drop, unheard of for that club, albeit on the NYSE. Whats more alarming about that hit is that shareholders outside the Glazer family have no voting rights, so that small amount of share holders must be selling in droves.
Can we suspect that Hornby may be just playing the market, and like other companies issue a loss warning, then post losses a lot less than expected, and we get a resurgence in investment ?
On the Eco front, I had it reliably pointed out to me by a friend in the states that sales of eco vehicles are hitting pump sales in the states, plus the Americans are getting more automotive quality oils from fracking, so further reducing their reliance on gulf imports, this was in fact reported on the BBC some time ago.
Quote from: Nik96 on February 11, 2016, 12:15:17 AM
You say the general trend is downwards over the last five days. You're correct but the percentage change between 4th and 10th of February is a whopping 4.13%. Still nowhere near hornby's crash of 60%.
This appears to be the point that is missed at the moment.
Exactly so !
a point that @MikeDunn (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=641) and I were trying to make earlier !
But it is all **** in the wind, tomorrow will reveal if I, perhaps in partnership with others, will be able to do anything with it
muwahhhaha ;D
Quote from: Graham Walters on February 11, 2016, 12:30:23 AM
more automotive quality oils from fracking, so further reducing their reliance on gulf imports, this was in fact reported on the BBC some time ago.
It is way more simple than that, not automotive products alone :
Way back in the 70's Sheik Yamani of the House of Saud (sp may have suffered with age !) held us to ransom by restricting exports from (the then, now a rump) OPEC and thus pushing up the price of all oil derived products and services, which only served to push production into other spheres, North Sea and now Shale and Frack
Now the law of unintended consequences springs Parkison-like into action :
The House of Saud opens the taps to reduce the price of oil to put the American ( and Canadian) new shale and frack out of business, - which are more expensive to extract and process than Saudi oil :
so America does a deal with Iran, to bring them back into the fold of international friends, who promptly add their new un-embargo supplies, without national limit to market, to do down the Saudi sovereign wealth fund which will be bankrupt in ( at present rates) about 5 years
wheels within wheels
with the added advantage that it totally cream-crackers the Russian oil 4casts/economy
Graham - I see Man United are lurking at fifth in the league, so any share price drop less than 25% is doing okay surely! ;D
Not wishing to go off topic, but I feel the club sold its soul when the Glazer deal was done. Wasn't it something like borrow money to buy club, then transfer said borrowing onto club's books? Nice one for the fans that.
I think Hornby's share price drop of 60% can only really be attributed to Hornby, since the wider market didn't move anything like that on the day. Market sentiment most probably didn't help (in that we have nervous sentiment) but I don't think we can pin the reasons for the drop on the wider market.
I too feel more for the employees than the trains.
Cheers (and all Man U comments in jest)
Dan
Quote from: DesertHound on February 11, 2016, 07:03:25 AM
Graham - I see Man United are lurking at fifth in the league, so any share price drop less than 25% is doing okay surely! ;D
Not wishing to go off topic, but I feel the club sold its soul when the Glazer deal was done. Wasn't it something like borrow money to buy club, then transfer said borrowing onto club's books? Nice one for the fans that.
I think Hornby's share price drop of 60% can only really be attributed to Hornby, since the wider market didn't move anything like that on the day. Market sentiment most probably didn't help (in that we have nervous sentiment) but I don't think we can pin the reasons for the drop on the wider market.
I too feel re for the employees than the trains.
Cheers (and all Man U comments in jest)
Dan
No offence taken, all you say about United is true, I mentioned them because their shares have been on the rise since being issued, the drop just shows what a results led market the stocks are.
Well, it's 9:20 & the shares have ... dropped more.
Not as bad (let's face it - it can't drop over 50p anymore ::)), but it dropped a further 2.25p - call it 7% - since opening.
Quote from: Graham Walters on February 11, 2016, 12:30:23 AM
Can we suspect that Hornby may be just playing the market, and like other companies issue a loss warning, then post losses a lot less than expected, and we get a resurgence in investment ?
Not really they have a business plan to save the company and it appears what was planned probably meant a breakeven or profit for this year, that now has become a loss and investors have no faith in those with the power.
On a separate note, the employees probably heard about this and are most probably worried about their jobs, and that is a fair few people to get new jobs in one town. I'm sure something will be done to solve this problem.
Closing down today another 27.5% down to 23p, Does anybody know what happens if they hit a rock bottom of nil value?
If the price is zero I will buy all the shares :D
Best regards,
Joe
P.S. How much debt do they have ?
With a whopping 181bn wiped off the FTSE so far this year its no wonder stocks are plunging, this week alone has suffered a further loss of 80bn!
Losses such as this along with the global market losses affects every stock. As for the post that mentions "Today's biggest mover up was Prudential with a whopping 4.40%" Their shares have actually been the the biggest casualty on the 100!
Read this to see why (http://www.telegraph.co.uk/finance/economics/12151386/Hong-Kong-follows-global-rout-as-shares-plunge-live.html)
Hardly the same thing though, is it ::)
Quote from: Mr Sprue on February 11, 2016, 08:31:41 PM
With a whopping 181bn wiped off the FTSE so far this year its no wonder stocks are plunging, this week alone has suffered a further loss of 80bn!
Losses such as this along with the global market losses affects every stock. As for the post that mentions "Today's biggest mover up was Prudential with a whopping 4.40%" Their shares have actually been the the biggest casualty on the 100!
Read this to see why (http://www.telegraph.co.uk/finance/economics/12151386/Hong-Kong-follows-global-rout-as-shares-plunge-live.html)
Yesterday Prudential had a growth of 4.40% (FACT). It was used to illustrate my point that hornby's crash is somewhat decoupled from the FTSE slow decline and the fact that a 60% crash is a big thing. Hornby's shares went down 60% one day and 25% the next. That is called a crash.
The FTSE is decreasing gradually over the last 5-6 weeks, at a few percent every day is a decline.
The point half of us seem to understand and the other half dont is one companies crash has not been caused by the FTSE slowly falling since January. You can have decline without it being a crash.
Quote from: joe cassidy on February 11, 2016, 08:28:35 PM
If the price is zero I will buy all the shares :D
P.S. How much debt do they have ?
You'd have to fight a few people ;)
New Pistoia may sell you theirs (they dropped to22.5% today), but Ruffer might beat you to them (they moved up to 12% I wonder what %age is required to demand a seat at the Board ... :hmmm: Takeover bid, anyone ? What would have cost £18M yesterday is only £12.5M today ... ::)) Phoenix Asset Mgmt only have around 29% ...
As to debt - they have £26M in liabilities.
Quote from: Nik96 on February 11, 2016, 09:09:03 PM
The point half of us seem to understand and the other half dont is one companies crash has not been caused by the FTSE slowly falling since January. You can have decline without it being a crash.
Indeed ... and I hardly see the point of comparing this with the FTSE - Hornby aren't a member ... they're on AIM ... You might as well say that it's because the NASDAQ fell ! Another Exchange they aren't in ... ::)
Quote from: MikeDunn on February 11, 2016, 09:26:04 PM
Quote from: Nik96 on February 11, 2016, 09:09:03 PM
The point half of us seem to understand and the other half dont is one companies crash has not been caused by the FTSE slowly falling since January. You can have decline without it being a crash.
Indeed ... and I hardly see the point of comparing this with the FTSE - Hornby aren't a member ... they're on AIM ... You might as well say that it's because the NASDAQ fell ! Another Exchange they aren't in ... ::)
Apart from the FTSE is relevant to Hornby, we wouldn't be having this discussion and this would be on the news if the FTSE dropped remotely near 60%. My point is one of correlation. Why is this news? Because the individual share price dropped 60% but the rest of trading didn't. This means something has happened with Hornby's Investors...
This is my point, the crash of Hornby shares was caused by something Hornby did and it's investors reacting. Something which appears to be missed here...
You mis-understand me; I was agreeing with your point to Mr Sprue ...
Quote from: MikeDunn on February 11, 2016, 10:00:11 PM
You mis-understand me; I was agreeing with your point to Mr Sprue ...
I apologise to you Mike,
:sorrysign:
Quote from: Nik96 on February 11, 2016, 05:42:00 PM
Closing down today another 27.5% down to 23p, Does anybody know what happens if they hit a rock bottom of nil value?
Interesting question ! I guess there may be a minimum price to be ( remain) quoted ? 1p shares are often spoken about as experimental hunting grounds for the ever hopeful investor :) Maybe 1p is the minimum ?
Yes, 23p at close, they went down to 19p at one point (3pm ish ?) then went up, so someone somewhere must have decided to snap up a bargain.
Quote from: MalcolmAL on February 11, 2016, 11:32:54 PM
Quote from: Nik96 on February 11, 2016, 05:42:00 PM
Closing down today another 27.5% down to 23p, Does anybody know what happens if they hit a rock bottom of nil value?
Interesting question ! I guess there may be a minimum price to be ( remain) quoted ? 1p shares are often spoken about as experimental hunting grounds for the ever hopeful investor :) Maybe 1p is the minimum ?
Yes, 23p at close, they went down to 19p at one point (3pm ish ?) then went up, so someone somewhere must have decided to snap up a bargain.
I'm currently toying with the idea.
They wont drop that far...unless the company is a totally debt laden basket case.......
A very interesting thread, thanks to all for their comments.
A couple of observations from me as of end of trading on Thursday and based on Hornby's 2015 annual report (see http://hsprod.investis.com/ir/hrn/pdf/23204_Hornby_AR_2015.pdf (http://hsprod.investis.com/ir/hrn/pdf/23204_Hornby_AR_2015.pdf) ). Of course their financial position would seem to have significantly worsened since their 2015 annual report:
~ Hornby's market cap is only GBP12.64M, which makes them a very small traded company. Market capitalisation is the total value of the company calculated by multiplying the total number of outstanding shares (~55million) by the current share price (GBP0.23).
~ So in theory, the NGF could buy Hornby for 12 million pounds, but this would require the agreement of the majority of Hornby shareholders to sell at today's share price which is unlikely. If the NGF was to put in a hostile bid we could expect to acquire Hornby at about a 30% premium; in other words we could realistically buy Hornby for about GBP17million. Hmmm.
~Looking at Hornby's 2015 annual report their profitability is marginal at best. In 2015 on sales of GBP58.1million they made a profit of just GBP300,000 - a profit margin of just 0.5%. Interestingly this is a vast improvement on 2014 when Hornby posted a GBP4.1million loss on sales of GBP51.6million. So they have increased sales by about 12.5% over the last year and increased profit by an even greater percentage. At the end of there day though they are making very little money at all on their sales.
~Others can maybe speculate as to why their margins are so tiny, but at the end of the day Hornby is a company with reasonable sales, but tiny profits which equates to minimal earnings per share of 3.4p and a dividend of zero. Not very healthy at all.
~ Debt is listed at about $7.5million (more than half Hornby's market cap). They also incurred costs of just under GBP1million related to their relocation and 'restructuring' - not unreasonable if these costs helped return the company to profitability in 2015.
~ Other posts have mentioned the resignation of Simon Kohler as a significant factor in last year's performance. Sorry to all Simon fans, I don't think he had a senior enough position to make a real difference to the overall financial picture. As a marketing manager he would have limited control of supply chain strategy (manufacturing and distribution costs), corporate restructuring or corporate debt management.
~ Finally a look at the balance sheet suggests they have high inventory levels of around GBP12.5 million (i.e. stock not yet sold to wholesalers or retailers) and another GBP10million or so in amounts owed to them by wholesalers and retailers.
~ So with about GBP1million in cash (and short term derivatives) plus about GBP12.5million in inventories, less about $9million owed to suppliers and about $7.5million debt, it is difficult to assign much value to the company.
In summary, I can see three ways forward:
1) Hornby goes it alone and tries to increase revenue, reduce costs and decrease debt. Achievement of which is not likely based on prior performance.
2) They are purchased at a price less than GBP20million by a competitor such as Bachmann
3) Private equity steps in and takes them over - the most likely in my opinion
None of these options are positive for our hobby as a whole. As far as future investment in N Gauge, well I don't think we should expect much at all....
Quote from: Chetcombe on February 12, 2016, 01:15:56 AM
A very interesting thread, thanks to all for their comments.
but tiny profits which equates to minimal earnings per share of 3.4p
3) Private equity steps in and takes them over - the most likely in my opinion
None of these options are positive for our hobby as a whole. As far as future investment in N Gauge, well I don't think we should expect much at all....
Thank you, fascinating read
,
3.4p yield per share, if bought at say 20p/share, would be a healthy 17% return, not to be sniffed at when faced with negative interests on bank deposits ! * But I dunno, are they paying out all their tiny profits, I have not studied them, it was just a curious thread thus far !
someone Mike? I thought said their debts were a lot higher than that ?
I also thought 3) was a probable outcome until I saw that late pick-up at 19p
would a load of venture capital be any worse than present, , ummm lets not go there :)
* some say that will boost the economy by getting money into real things not languishing in banks, [ but then banks did not usually languish it in the past anyway, they used to use the deposits to do real things, till they started messing with dodgy mortgage whatsits,,ho hum ] I wonder if it wouldnt just make me put it under my bed if inflation remains so low ,,,
Quote from: Nik96 on February 11, 2016, 10:04:17 PM
I apologise to you Mike,
:sorrysign:
No worries :no:
Quote from: MalcolmAL on February 11, 2016, 11:32:54 PM
Yes, 23p at close, they went down to 19p at one point (3pm ish ?) then went up, so someone somewhere must have decided to snap up a bargain.
Yup; the drop seems to be around the time New Pistoia sold a bunch ...
Quote from: Nik96 on February 11, 2016, 05:42:00 PM
Closing down today another 27.5% down to 23p, Does anybody know what happens if they hit a rock bottom of nil value?
They'd be suspended before they went that far ...
Quote from: Chetcombe on February 12, 2016, 01:15:56 AM
Other posts have mentioned the resignation of Simon Kohler as a significant factor in last year's performance. Sorry to all Simon fans, I don't think he had a senior enough position to make a real difference to the overall financial picture.
Agreed; and it was more like he was pushed than went happily. Interestingly, the company still have him as a consultant ... however, given the lack of understanding of the market they're in by the Directors, pushing out a resource like SK was a rather stupid idea, unless they pay him less as a freelance & get the same draw on his knowledge ? Can't see that, TBH !
Quote
3) Private equity steps in and takes them over - the most likely in my opinion
Look at who the main shareholders are - that's already happening, and has for a while.
Quote from: MalcolmAL on February 12, 2016, 02:09:49 AM
3.4p yield per share, if bought at say 20p/share, would be a healthy 17% return
Only to the company -
you wouldn't see any return as Hornby aren't paying any dividends ...
Quotesomeone Mike? I thought said their debts were a lot higher than that ?
I quoted the overall liabilities; debt is a component of that.
QuoteI also thought 3) was a probable outcome until I saw that late pick-up at 19p
would a load of venture capital be any worse than present,
As I say above - check out the main stockholders ...
Quote from: MikeDunn on February 12, 2016, 09:42:37 AM
Quote from: MalcolmAL on February 12, 2016, 02:09:49 AM
3.4p yield per share, if bought at say 20p/share, would be a healthy 17% return
Only to the company - you wouldn't see any return as Hornby aren't paying any dividends ...
Which was the reason for my previous question on the following line to the quoted bit "are they paying out all their tiny profits,"
:)
Thanks for the clarification, dont think I'll be investing for a while then :)
and they hit just over 301p this time back in 2007 ! How the mighty are fallen :(
Now that's a coincidence, time is 14:18 the markets up by 2.17% and Hornby by 2.88%!
Quote from: Mr Sprue on February 12, 2016, 02:18:24 PM
Now that's a coincidence, time is 14:18 the markets up by 2.17% and Hornby by 2.88%!
You still don't appear to have understood the Markets and individuality of Hornby's Share price.
As pointed out, the FTSE 100 does not include Hornby. So it's not really coincedental, because what you appear to be saying is that the two are coupled :D together, which they aren't they're two different things entirely.
Quote from: Nik96 on February 12, 2016, 02:32:11 PM
Quote from: Mr Sprue on February 12, 2016, 02:18:24 PM
Now that's a coincidence, time is 14:18 the markets up by 2.17% and Hornby by 2.88%!
You still don't appear to have understood the Markets and individuality of Hornby's Share price.
As pointed out, the FTSE 100 does not include Hornby. So it's not really coincedental, because what you appear to be saying is that the two are coupled :D together, which they aren't they're two different things entirely.
Would you have been happier if Mr Sprue had said "it is amusingly interesting that " instead of "a coincidence" ? :smiley-laughing:
But you must admit that the performance of the FTSE is a broad brush measure of investor sentiment at the time or during the day, which will be part of the view of Hornby or any other individual share ?
In any case a single data point is hardly sufficient to show a sigma5 correlation
time for
mahatmacoat :laugh:
Quote from: Nik96 on February 12, 2016, 02:32:11 PM
Quote from: Mr Sprue on February 12, 2016, 02:18:24 PM
Now that's a coincidence, time is 14:18 the markets up by 2.17% and Hornby by 2.88%!
You still don't appear to have understood the Markets and individuality of Hornby's Share price.
As pointed out, the FTSE 100 does not include Hornby. So it's not really coincedental, because what you appear to be saying is that the two are coupled :D together, which they aren't they're two different things entirely.
Agreed the FTSE is not directly connected with Hornby but what I was trying to point out that the movement of markets can and do affect share prices, the movement of the FTSE 100 is a pretty good indicator of the current financial climate. Yes Hornby's shares have fallen in value due to their financial situation but in addition to this the markets are not helping their share value either.
Quote from: MalcolmAL on February 12, 2016, 02:53:47 PM
But you must admit that the performance of the FTSE is a broad brush measure of investor sentiment at the time or during the day, which will be part of the view of Hornby or any other individual share ?
time for
mahatmacoat :laugh:
Thank you at last someone understands where I am coming from!
Time to exit this thread! :wave:
Quote from: Mr Sprue on February 12, 2016, 02:58:23 PM
Quote from: Nik96 on February 12, 2016, 02:32:11 PM
Quote from: Mr Sprue on February 12, 2016, 02:18:24 PM
Now that's a coincidence, time is 14:18 the markets up by 2.17% and Hornby by 2.88%!
You still don't appear to have understood the Markets and individuality of Hornby's Share price.
As pointed out, the FTSE 100 does not include Hornby. So it's not really coincedental, because what you appear to be saying is that the two are coupled :D together, which they aren't they're two different things entirely.
Agreed the FTSE is not directly connected with Hornby but what I was trying to point out that the movement of markets can and do affect share prices, the movement of the FTSE 100 is a pretty good indicator of the current financial climate. Yes Hornby's shares have fallen in value due to their financial situation but in addition to this the markets are not helping their share value either.
But the market movement is caused by share price. Investors are buying shares which affects the market. So the movement of the market is after the change in shares. It can't show you much more than a trend in Investors.
Once again, Hornby's Share price crashed, it is not declining in line with the markets.
Quote from: Mr Sprue on February 12, 2016, 03:04:39 PM
Quote from: MalcolmAL on February 12, 2016, 02:53:47 PM
But you must admit that the performance of the FTSE is a broad brush measure of investor sentiment at the time or during the day, which will be part of the view of Hornby or any other individual share ?
time for
mahatmacoat :laugh:
Thank you at last someone understands where I am coming from!
Time to exit this thread! :wave:
:thumbsup:
but dont leave just yet, I'm still looking for my cloakroom ticket :bounce:
Quote from: MalcolmAL on February 12, 2016, 03:12:29 PM
Quote from: Mr Sprue on February 12, 2016, 03:04:39 PM
Time to exit this thread! :wave:
:thumbsup:
but dont leave just yet, I'm still looking for my cloakroom ticket :bounce:
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
Quote from: Nik96 on February 12, 2016, 03:07:15 PM
But the market movement is caused by share price. Investors are buying shares which affects the market. So the movement of the market is after the change in shares. It can't show you much more than a trend in Investors.
Exactly - and the current trend in the FTSE and other major Exchanges is for the investors to panic & sell soft assets while moving into hard assets like gold.
Comparing Hornby against the All AIM, the price is bumbling along today, following the market. Comparing for a longer period, however ... and it is evident that Hornby has fallen off a cliff while the AIM in general has had a very slow decline (could be described as marginal). Comparing to the FTSE (which is daft as Hornby is in AIM after all ... but some people still seem unaware of this !) shows Hornby under-performing today - and the same cliff seen in the AIM when longer periods are examined.
QuoteOnce again, Hornby's Share price crashed, it is not declining in line with the markets.
Precisely. All visible if people bother to check the graphs ...
Quote from: MalcolmAL on February 12, 2016, 03:28:47 PM
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
LOL.... Ok my eldest son is a VP at Credit Suisse I'll see you there! :D
Quote from: Mr Sprue on February 12, 2016, 03:38:58 PM
Quote from: MalcolmAL on February 12, 2016, 03:28:47 PM
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
LOL.... Ok my eldest son is a VP at Credit Suisse I'll see you there! :D
You're a telepath !
I considered writing "Deutsche Bank/Credit Suisse" but edited it just before sending on the grounds that one worry at a time is enough :uneasy:
Quote from: MalcolmAL on February 12, 2016, 03:45:40 PM
Quote from: Mr Sprue on February 12, 2016, 03:38:58 PM
Quote from: MalcolmAL on February 12, 2016, 03:28:47 PM
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
LOL.... Ok my eldest son is a VP at Credit Suisse I'll see you there! :D
You're a telepath !
I considered writing "Deutsche Bank/Credit Suisse" but edited it just before sending on the grounds that one worry at a time is enough :uneasy:
That's it you've done it now! :worried:
Quote from: Mr Sprue on February 12, 2016, 03:57:14 PM
Quote from: MalcolmAL on February 12, 2016, 03:45:40 PM
Quote from: Mr Sprue on February 12, 2016, 03:38:58 PM
Quote from: MalcolmAL on February 12, 2016, 03:28:47 PM
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
LOL.... Ok my eldest son is a VP at Credit Suisse I'll see you there! :D
You're a telepath !
I considered writing "Deutsche Bank/Credit Suisse" but edited it just before sending on the grounds that one worry at a time is enough :uneasy:
That's it you've done it now! :worried:
Ooops ! :whiteflag: :admiration: :smackedface: :dunce:
:sorrysign:
Quote from: MalcolmAL on February 12, 2016, 04:13:08 PM
Quote from: Mr Sprue on February 12, 2016, 03:57:14 PM
Quote from: MalcolmAL on February 12, 2016, 03:45:40 PM
Quote from: Mr Sprue on February 12, 2016, 03:38:58 PM
Quote from: MalcolmAL on February 12, 2016, 03:28:47 PM
Ok, found it,
see you over on the Deutsche Bank thread,,,
now there is something to worry about, not this trifling little hornby thing ! :laugh3:
LOL.... Ok my eldest son is a VP at Credit Suisse I'll see you there! :D
You're a telepath !
I considered writing "Deutsche Bank/Credit Suisse" but edited it just before sending on the grounds that one worry at a time is enough :uneasy:
That's it you've done it now! :worried:
Ooops ! :whiteflag: :admiration: :smackedface: :dunce:
:sorrysign:
:laughabovepost: ;)
Quote from: MalcolmAL on February 12, 2016, 02:09:49 AM
Quote from: Chetcombe on February 12, 2016, 01:15:56 AM
A very interesting thread, thanks to all for their comments.
but tiny profits which equates to minimal earnings per share of 3.4p
3) Private equity steps in and takes them over - the most likely in my opinion
None of these options are positive for our hobby as a whole. As far as future investment in N Gauge, well I don't think we should expect much at all....
Thank you, fascinating read
3.4p yield per share, if bought at say 20p/share, would be a healthy 17% return, not to be sniffed at when faced with negative interests on bank deposits ! * But I dunno, are they paying out all their tiny profits, I have not studied them, it was just a curious thread thus far !
someone Mike? I thought said their debts were a lot higher than that ?
I also thought 3) was a probable outcome until I saw that late pick-up at 19p
would a load of venture capital be any worse than present, , ummm lets not go there :)
* some say that will boost the economy by getting money into real things not languishing in banks, [ but then banks did not usually languish it in the past anyway, they used to use the deposits to do real things, till they started messing with dodgy mortgage whatsits,,ho hum ] I wonder if it wouldnt just make me put it under my bed if inflation remains so low ,,,
Hi Malcolm
the 3.4p is actually earnings per share not dividend yield. The dividend rate is currently zero. So not even a high yield stock, I would call it a zero yield penny stock :(
The debt number I quoted was from their 2015 annual report, so I'm sure @MikeDunn (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=641) is right in saying it is greater now.
@Chetcombe (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=817)
Er - can you fix your quotes ? It's very hard to see what you're saying vs what you're quoting ... :(
Quote from: MikeDunn on February 12, 2016, 05:29:38 PM
@Chetcombe (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=817)
Er - can you fix your quotes ? It's very hard to see what you're saying vs what you're quoting ... :(
Oops - That'll teach me to use the preview button before posting :-[ Hopefully clearer now (unlike Hornby's future prospects!)