[Doug]

Model train and Scalextric slot car maker Hornby are unlikely to meet market expectations, the company warned this morning (27 January 2012).

Growth in sales in the UK was muted in the pre-Christmas period compared to a year earlier, largely due to a drop in sales of train sets and Scalextric slot car sets.

In a trading update to the Stock Exchange, Hornby said that although sales remain the ahead of comparable 2010/11 revenue, the rate of growth is below management expectations.

"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," said Chairman Neil Johnson.

"The challenging economic environment impacted UK sales negatively pre- Christmas. In anticipation of continuing difficult trading conditions, we have adapted our business to offer a wider range of products at lower price points in categories complementary to our core business," he added.

"The company therefore expects that pretax profits in respect of the year to March 31 2012 are likely to be below current market expectations," the statement said.

The group said it has taken action to reduce costs and had launched its London 2012 range for the Olympic Games.

Shares fell 30p to 93.5p, down about 17%.

 

[miveson]

I hate to tell you that 30p off of 123.5p to 93.5p is not 17%. It's a lot closer to 24.5%

They fell as low as 90p and have recovered to 99p. It'd be interesting to see what analysts had factored in for profit, interesting that they don't actually give any actual figures, more guidance than anything.

 

[zarko]

How about you start selling cars and sets at more realistic prices? For example, none of the super resistant cars should be above £20 let alone £30-£35 and maybe you will start to see bigger sales. Not to mention the F1 cars which use the same mould from 2-3 years ago, and then you try and sell them as 'new model'.
Start listening to the general public and start producing what we want and not what you think is right for the market.

 

[RikoRocket]

QUOTE (Doug @ 27 Jan 2012, 09:34) <{POST_SNAPBACK}>"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," said Chairman Neil Johnson.

"trading conditions"? It might have helped if they had got the Platinum set out earlier, and maximised the potential for Xmas which they know is their main revenue.

What is interesting is they were better than the previous 2 years and yet the share prices dropped alarmingly - I think a new spin doctor is required...

 

[MPJBud]

QUOTE (zarko @ 27 Jan 2012, 10:00) <{POST_SNAPBACK}>none of the super resistant cars should be above £20 let alone £30-£35

I'm not sure how you think you can research, manufacture, transport, retail something like a slot car for £20.

VAT is 3.33 to give you £20, then there are other duties, import duties, licence fees etc. Retailer's cut.

 

[Doug]

So it is us, the Hardcore Fans Keeping The Flame Alive

Check out the article in The Huffington Post

 

[TR7_Driver]

Share price below a 100p, buy buy buy, and a few cars as well.

 

[Coopdevil]

From that Huff Post article

QUOTE We haven't got any children at the club," he told the Huffington Post UK. "We haven't got anyone under 40. That tells you something."

"We call it the Last of the Summer Wine now. We enjoy ourselves. But we say now that children now would probably get in the way."

Well done London Scalextric Club.

(Sarcastic golf clap)

 

[zarko]

@MPJBud - please tell me you are joking!? The minimum profit made by majority of manufacturers on any car will be in the region of 100% if not a lot more. Not to mention the markup prices by resellers to make their own profit. If Carrera can sell high detailed cars at around £25, which look & handle on the track much better than Scalextric cars, why can Scalextric not do the same?

I was a huge Scalextric fan (90% or more of my collection is Scalextric cars) but with their attitude over the last 2-3 years, you can clearly see that they are on a down spiral and I wish them well but they will not be getting any more of my cash unless I can pick up a bargain on ebay or when they decide to realese an F1 car which has correct livery and body shape!

 

[tedm]

I'd like to issue a warning ahead of the trade fairs - I'm skint. The forecast for 2012 is this is unlikely to change.
TED...

 

[MPJBud]

QUOTE (zarko @ 27 Jan 2012, 11:09) <{POST_SNAPBACK}>The minimum profit made by majority of manufacturers on any car will be in the region of 100% if not a lot more.

But 100% of what.

Take your £20
Remove the vat leaves £16.67
Let's be generous and give the retailer the 6.67, that leaves £10
Couple of quid for shipping from china and then distribution to the retailer leave £8

so your 100% profit for Hornby is £4
100% profit for the manufacturer is £2
Cost of the car £2

Here endeth the lesson

Bud

 

[zarko]

QUOTE (MPJBud @ 27 Jan 2012, 11:52) <{POST_SNAPBACK}>But 100% of what.
100% markup on what it actually cost them to make the car in the first place and all other associated cost that goes with it. Just look at some of the SCX NASCARs which are being sold at £10-£15 BNIB, it just tells you how much super resistant cars cost if resellers are willing to offload them at this price. Yes, resellers probably make bare minimum at this price but it just proves a point of how much it costs to make the car.

 

[MPJBud]

But 100% is only £4 in my outline, how many of these do you need to sell in order to run a business the size of Hornby?

As for SCX Nascars, they made a gamble and lost and are trying to recoup something for the oulay, so they are probably knocking them out at cost, you can't run business selling everything at cost.

I still fail to see how you can justify pricing a car at £20 and have a business that will still be here next year.

 

[RikoRocket]

QUOTE (Doug @ 27 Jan 2012, 10:45) <{POST_SNAPBACK}>So it is us, the Hardcore Fans Keeping The Flame Alive

Check out the article in The Huffington Post

Sounds like we are the next Dodo...

 

[zarko]

@MPJBud - what are you on about with £4! The total cost to Hornby (this includes VAT, labour, P&P and all other costs you can think of) per car is not more than £10 for basic models and maybe up to £15 for high detialed cars with special packaging. If the cars get sold for more than £30, you can do the maths and work out what their profit is.

QUOTE As for SCX Nascars, they made a gamble and lost and are trying to recoup something for the oulay, so they are probably knocking them out at cost, you can't run business selling everything at cost.
Don't you worry, there were not sold at a loss to the reseller. I never said they should sell them at that cost and expect to run the business, I simply gave an example showing how low the price can go to break even or make a small margin.

QUOTE I still fail to see how you can justify pricing a car at £20 and have a business that will still be here next year.
Carrera sell their high detailed models at £25 or less and as I can see, they are still around.

 

[Michael363672]

QUOTE (MPJBud @ 27 Jan 2012, 11:52) <{POST_SNAPBACK}>Let's be generous and give the retailer the 6.67, that leaves £10
That is way over what you would make on a car so you are extremely generous there

and Yes I do actually know what the TRADE Prices are ! and most times you can buy on ebay for under or at very little more than trade prices

QUOTE (zarko @ 27 Jan 2012, 12:15) <{POST_SNAPBACK}>Just look at some of the SCX NASCARs which are being sold at £10-£15 BNIB, it just tells you how much super resistant cars cost if resellers are willing to offload them at this price. Yes, resellers probably make bare minimum at this price but it just proves a point of how much it costs to make the car.
The SCX NASCARS were not from SCX them selfs they had come from an administrator trying to recover cash after a distributer went under so were sold at a price to shift a load not a price to make money
So actually not proving how much it cost to make at all

Is this how much it should be all the time ? No right place right time = STUPID PRICE they have lost money on me shopping there this time

 

[Mr Modifier]

I don't think we are under immediate threat of extinction. If a couple of large slot car manufacturers collapse there are others left and they will benefit from a surge in sales if a couple of big ones go down. The remaining manufacturers will get a bit of a wake-up call and maybe, just maybe, listen to the hardcore enthusiasts and make what we want them to make.

Prices may rise, they may not. If they do then it will probably encourage a few more scratch builders to get into selling resin kits and widen our choice further.

My only concern about Hornby collapsing would be the availability of spares for my APB and lane changers but other digital options are out there.

Even if all track manufacturers went bust there is always a routed option.

There are enough niche manufacturers making a success of it from the enthusiast market for the enthusiast market to be well served indefinitely.

I'm not at all worried about continuity of supply of slot stuff.

What DOES worry me is the lack of youngsters getting off their playstations and into slot cars - Hornby needs to be roundly applauded with its Scalextric for Schools project. I'm trying to put my portable track out there so people can see slot cars are alive and well and if I capture the imagination of only a handful but they get into the hobby then job done.

The failure to get kids into slots is not the fault of video games. My track at my local school was inundated with kids begging to have a go. What is going wrong is kids' lack of mechanical aptitude - when their Scalextric goes wrong they can't fix it and more to the point; their dad is unlikely to be able to fix it. I have 19 neighbours in my street. To my knowledge only I and ONE OTHER has a garage or shed with tools in it.

Scalextric in its basic figure-of-8 form loses its appeal quickly. Unless you are practically inclined it gets exponentially difficult to build interesting layouts that join up without spending a fortune on tiny and outrageously overpriced 1/4 straights and 22.5 degree turns.

Kids (and may dads) these days wouldn't dream of taking the cars apart and attempting to tune them. Schools don't let kids near screwdrivers and craft knives any more for fear of a law suit. The culture is - "if it's broken buy a new one". You wouldn't, after all, take an Xbox apart to try to make the track in your latest rally simulation a bit less bumpy.

All in all the long term future of slot racing needs something doing to show kids HOW to make it more interesting and rewarding. Building a car from a kit, learning how it works and the satisfaction of watching it do its first laps without falling apart would, I have no doubt, be more satisfying than getting fastest lap on the latest Need For Speed video game (voice of experience there). So what is missing is OPPORTUNITY. And what supplies that opportunity? WE DO through CLUBS because that way kids can race, with their dads (and mums?) on a bigger, more interesting track and gain some satisfaction from making something and improving it and getting recognition for that achievement.

Slots will last my lifetime but if we want them to grow and thrive we need to DO SOMETHING PRACTICAL ABOUT IT.

There isn't a slot car club west of Abergavenny (so that means Wales' largest 2 cities and surrounding areas have no club and that's a population of around 1 million). There are 5 or 6 of us just starting to meet casually in the middle of that area and I am hoping we can get a club going in due course and I for one will be trying to get a junior section going in a year or 2 (just as my son reaches the right age to trust with a screwdriver and oil pen).

So all you slotters who are concerned about the death of our hobby - that's what I'm doing. How about you?

If you care enough about it do something. If you don't..... don't. It's a free country.

 

[Coopdevil]

QUOTE Sounds like we are the next Dodo...

I wouldn't take an incredibly atypical example of a slot car club with no members under the age of 40 as an example. In fact I'd go as far as to say (as I hinted in my slightly angry post above) that if a club with Scalextric in it's title operating in a wealthy city of 7.5m people with the only decent public transport system in Britain has no interest from kids then it is the club that is at fault, not Hornby. In fact, I'll stick my neck out and suggest that club members there must be actively preventing and discouraging kids from joining and are sowing what they reap.

Wasn't this the club where a young Johnny Herbert won one of his first cups?

 

[MPJBud]

QUOTE (Michael363672 @ 27 Jan 2012, 14:00) <{POST_SNAPBACK}>That is way over what you would make on a car so you are extremely generous there
I was making my maths simple, being a lowly engineer

 

[Mr Modifier]

Coopdevil - agreed - see my post above yours.

Shame on the London club that excludes youngsters. They don't have to let the kids into the main evening event - many clubs run an early session or even a different night so they can learn their craft and get good enough to thrash their elders.

As I said - it's up to us really. We can choose to close up shop and slowly decline or we can share our hobby with others.