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Train set maker Hornby (HRN) reports finals after a profit warning in January, as pre-Christmas sales in the UK fell below 2010. So far this year the rate of growth is ‘below management expectations’, but observers will be checking to see if this bearish call by the company is too cautious and if new products such as Scalextric Star Wars can halt a bruising decline for the shares from 130p at the start of the year to as low as 80p.
Model train and Scalextric slot-racing games maker Hornby has indicated that underlying profit before tax for the year to the end of March will be not less than £4.5m after a subdued finish to the financial year. The market was expecting full-year profit before tax of £6.45m prior to the latest trading update, which is sure to be interpreted as a profits warning. The group's international business traded strongly in the first three months of the year and made a positive contribution, the group said. "The performance of our international business continues to improve and our London 2012 Games range of merchandise is proving to be increasingly popular," said Neil Johnson, Chairman of Hornby.
Neil Johnson, Chairman of Hornby, commented, " The results for the year reflect the impact of a weak retail environment in the UK. However, the performance of our international business continues to improve and our London 2012 Games range of merchandise is proving to be increasingly popular. The Board is looking ahead with confidence."
Hornby Plc - Year End Trading Update Hornby Plc, the international models and collectibles group, is today updating shareholders on trading ahead of its Preliminary Results for the year ended 31 March 2012, which are expected to be announced on 8 June 2012. The Board expects to report underlying pre-tax profits for the period, subject to audit, of not less than £4.5 million. Following the January update, trading in the final quarter of the financial year to 31 March 2012 has remained muted. The backdrop of a challenging retail sector in the UK remains, but the Company has increased its distribution coverage significantly as a result of products relating to the London 2012 Games. The Group's international business traded strongly and made a positive contribution.
http://www.investegate.co.uk/Article.aspx?id=201204230940258381B
WH Ireland initiated coverage of Hornby (HRN) with a "buy" recommendation and 135p target price. While the toy manufacturer suffered a disappointing Christmas trading period with poor sales of its big ticket items, the broker noted that the firm has since broadened its product range and made partnerships with a number of brands such as Star Wars. Additionally, WH Ireland noted that the company secured the rights to develop a range of Olympics based toys, for which it expects to see strong demand. The broker added that the shares have under performed the FTSE All Share by 30% since the start of the 2012 calendar year and its earnings forecasts put the stock on a prospective multiple of 8.2 times for the year ending 31st March 2013.
WH Ireland Securities initiates buy on Hornby, target price 135p.
Just caught your comment and I agree. No idea why SP is slipping back but might add sub 90p.
Hornby should push back to sensible levels (£1.20-£1.50) over the summer with their Olympic products
not sure! stupid decision!
Sorry wrong board.
Why would you invest in HORNBY??????????
I bought this on the back of Shares Mag recommendation on their new merchandise around the Olympics - they have also signed a deal with Moshi Monsters and Star Wars product on the way - this seems to me an old stuffy brand trying to get down with the kids...hopefully it'll work but in my mind it's make or break - I'm hoping it's 'make' as since the BUY recommendation it's plummeted 25%!
Hi People< Any thoughts on where this is going? :-)
surfedout - couldnt agree with you more - their toys, especially of old were built to last and are fantastic pieces of engineering ( for toys anyway) - I sadly do not own such a train set but I do envy those that do - perhaps in my retirement I may treat myself and catch up with the fun. Sadly as a business they will have to adapt as the youth of today obviously concentrate on the electronic games etc - HRN will become more and more a specialised Niche in the market - and I cant see that expanding the SP any - I hope I am wrong . gl
Numis downgrades Hornby from buy to add, target price 136p
It is a sign of the times, but I still have Hornby from my sons youth (now 24) in the loft, and it has just come out for my newest arrival who is 10 months old.... Hornby still as good as it was 20 years ago, and still fun for them.... Not good for trade but reliable and solid toys
Looks like a red day for HRN - pity - sign of the times and changing desires of the kids
Our new category initiatives for 2012 include: · Scalextric "Star Wars" products based on the Lucasfilm series of movies, the first of which will be released in 3D format in February 2012. Hornby holds global rights to slot racing products related to "Star Wars". · A comprehensive range of pre-school products at keen price points based on the new TV Series "Olly the Little White Van", launched under the Corgi brand. The range includes die cast vehicles, playsets, jigsaw puzzles and remote control vehicles. Hornby holds global rights to toy products related to "Olly the Little White Van". The producer of the series is at an advanced stage in negotiations for transmission rights in a number of overseas markets. · A newly tooled range of collectable Corgi die cast toys designed to hit the key £1.99 retail price point. The products are designed around the UK/European vehicles that children see every day on the roads of UK/ Europe, a market not currently served by our die cast competitors. · A recently signed distribution agreement with Reeves International (USA) to distribute their range of Breyer Horses in the UK. This range of collectable horses fits perfectly with our distribution profile and brings Hornby into the arena of girl and adult female collectables, alongside our traditional male directed ranges. A flagship launch product for this range will be the "War Horse" collectable which will be available for shipping in the UK in February 2012. · A global distribution agreement with fantasy war gaming specialist Mantic Games. Hornby will distribute Mantic's "Kings of War" product range under our highly complementary Humbrol brand. In doing so we will enter the lucrative fantasy war gaming market, and provide a further vehicle for sales of our Humbrol paint ranges. · Last but by no means least, we have entered into a global license agreement with Mind Candy for its global kids entertainment brand 'Moshi Monsters'. Drawing on our London 2012 collectable experience, Hornby has secured global rights to produce and distribute collectable pin badges and die cast vehicles based on the Moshi Monsters characters. Our activity in developing these new categories has been recognised at the London Toy Fair by Hornby gaining 3 Best New Toy Awards; for our London 2012 Pictogram range, the Corgi Toys range and our Micro Scalextric Star Wars set.
Outlook The Board remains confident in the Group's strategy. We recognise that trading conditions in the UK and the rest of Europe will continue to be challenging for the foreseeable future and are likely to continue to constrain sales of our high ticket Hornby and Scalextric items. However we have taken steps to broaden our portfolio of products, resulting in lower average price points. We have also signed a number of exciting license and distribution agreements which will help to underpin the business over the coming years. At the London Toy Fair earlier this week, we showcased our major product introductions for 2012. Leading this programme is our range of London 2012 merchandise, produced for the London Games which start in July this year. Our retail listings for this event in mass market channels of distribution are very strong and these new channels represent a unique opportunity to launch mass market ranges following on from our London 2012 range.
Business Performance In the Interim Report on the first half of the financial year to 30 September 2011, we highlighted the good progress made in growing sales in our Continental European subsidiaries. This trend has continued to date. At the time of the Interim Report we indicated that sales growth in the UK had been muted. Against a background of fragile consumer confidence and cautious retail trade buying, sales in the pre-Christmas period in the UK were below the corresponding period last year. In particular, sales of high-ticket items such as our Hornby and Scalextric sets were affected adversely. Although Group sales for the financial year to date remain ahead of the same period last year, the rate of growth is below management expectations. The Company therefore expects that pre-tax profits in respect of the year to 31 March 2012 are likely to be below current market expectations. Net debt as at 31 December 2011 was £8.5 million (30 September 2011 £12.8 million, 31 December 2010 £10.3 million). Supply Chain Our supply chain is performing well and we have continued to diversify our supplier base.
http://www.investegate.co.uk/Article.aspx?id=201201270700122608W
Where do people feel this sp is going on approach to olympics? My current av is 21p and considering getting out.
Steady as she goes.....just shows you...by popular demand..they survive.
A profit warning is not the best way to start the year, but that is what happened with Hornby in January. Part of the cause was supply shortages, so the news – released with its full-year results in June – that the issues had been resolved was a major relief. House broker Numis is predicting a full-year pre-tax profit of £7.4m, which would be £3m ahead of the previous 12 months. Much will depend on Christmas, but the resolution of supply-chain issues, plus the expected boost from next year, points to a positive outlook for the shares, says the Independent, which has a ‘buy’ rating on the stock.