Market's view on Hornby
Published on April 2024
- Hornby’s financial position shows a net debt of £14.3 million as of 31 March 2024, with an increase from the previous year primarily due to a trading loss and capital expenditure.
- Concerns are raised about Hornby’s stock management and debt issues, noting that while stock has reduced, it doesn’t necessarily equate to a reduction in debt.
- Observations are made that competitor businesses are capturing more market share, which might be attributed to Hornby’s strategic missteps, such as not purchasing a Chinese factory that has led to ongoing business disruptions.
- It is noted that Hornby historically performed better when focusing on trade supply rather than direct sales, and there’s criticism towards their failure to re-engage with former top trade customers.
- Discussions include the impact of inflation on Hornby’s pricing and sales volume, suggesting that despite price increases, the actual sales volume might be decreasing.
- Comments are made on Hornby’s involvement with the Warlord games business, with some speculation about the strategic intentions behind the move.
- Stock watchers discuss the involvement of larger investment groups like Castelnau and Phoenix, and how these may influence Hornby’s business strategies.
- There’s skepticism about Hornby’s retail strategy shifts and their impact on both the brand and its relationship with smaller manufacturers.
- The acquisition activities of companies like Frasers Group in relation to Hornby are discussed, pondering the potential outcomes and strategies.