Airfix 2019

[Procopius]

1 hour ago, Albeback52 said:

Oh please,PLEASE let it be true!! A Spitfire - free 2019? Bliss!😉😂😂

Allan

[Albeback52]

9 hours ago, Procopius said:

brilliant!! Probably the best of the Dracula movies!! One of my favourites! Still doesn't change anything though! .

 

Allan

 

ps - maybe holding up a Spitfire would have the same effect on the intended victim?

pps - Airfix - how about a 1/6 scale diorama featuring Peter Cushing and Christopher Lee in that scene from Dracula? Just a thought!! Better than any Spitfire...............!!!!😂

Edited May 31, 2018 by Albeback52

[ivand]

1 hour ago, Albeback52 said:

ps - maybe holding up a Spitfire would have the same effect on the intended victim?

Well, since French speaking modellers call attaching the wings to the fuselage, "la mise en croix"... 😉

[IanC]

16 hours ago, GreenDragon said:

Also as they are in financial trouble they could concentrate on small 1/72nd fighter moulds. They could probably churn out three or four fighters instead of another big kit much as I'd love a new B-29!

 

 

 I'm in favour of that since I only have space to store and display fighters - all my heavies are all still unbuilt in the stash.

 

So instead of the B-29 I'll take a P-47, Yak-9, Spit XIV and P-51B please!

 

Edited May 31, 2018 by IanC

[Dave Fleming]

On 5/31/2018 at 4:34 AM, Albeback52 said:

Oh please,PLEASE let it be true!! A Spitfire - free 2019? Bliss!😉😂😂

Allan

 

From the hastly removed leak in january, I suspect we will se a 1/48th mk XIV

Edited June 1, 2018 by Dave Fleming

[fightersweep]

Despite the pleas for a Spitfire free year, a Mk XIV in 1/48 (and 1/72) would be a money spinner for Airfix. It's the one mark that keeps getting overlooked.

 

Probably wouldn't sell as well, but I wouldn't mind seeing a few Italian subjects from Airfix again. I really like the idea of a Macchi 200, Macchi 202 or Fiat CR 42 in their current style.

 

Steve

Edited June 4, 2018 by fightersweep

[593jones]

8 hours ago, fightersweep said:

 

Probably wouldn't sell as well, but I wouldn't mind seeing a few Italian subjects from Airfix again. I really like the idea of a Macchi 200, Macchi 202 or Fiat CR 42 in their current style.

 

Steve

In 1/48, of course.

[Wez]

9 hours ago, fightersweep said:

Probably wouldn't sell as well, but I wouldn't mind seeing a few Italian subjects from Airfix again. I really like the idea of a Macchi 200, Macchi 202 or Fiat CR 42 in their current style.

 

Especially the Mc.200 and Fiat G.50 which were widely used.

 

23 minutes ago, 593jones said:

In 1/48, of course.

 

Buy an Optivisor!

[fightersweep]

Yes, of course! The Fiat G.50 as well please, but really would like to see a Macchi 200.

 

Oh, and 1/72 scale.....naturally.

[IanC]

1 hour ago, fightersweep said:

Yes, of course! The Fiat G.50 as well please, but really would like to see a Macchi 200.

 

Oh, and 1/72 scale.....naturally.

 

Yes it would be really nice if Airfix offered one or two Italian fighters (the two above, perhaps) and a pair of Soviet ones, to complement their 1/72 line-up. And maybe something French.

 

But I'm assuming they're not regarded as big sellers, and too much of a risk in the current climate. More decals for the Spit Mk I and Mustang next year instead...

[fightersweep]

22 minutes ago, IanC said:

But I'm assuming they're not regarded as big sellers, and too much of a risk in the current climate. More decals for the Spit Mk I and Mustang next year instead...

True, but Airfix seem quite keen on their Battle of Britain subjects and Dogfight Doubles, so a 257 Squadron Hurricane and a CR 42 Dogfight Double set would be just the ticket!

 

Well, one can dream!

[Albeback52]

13 hours ago, fightersweep said:

True, but Airfix seem quite keen on their Battle of Britain subjects and Dogfight Doubles, so a 257 Squadron Hurricane and a CR 42 Dogfight Double set would be just the ticket!

 

Well, one can dream!

Interesting idea. Or, maybe a Hurricane and Fiat BR.20 Dogfight double set? Still better than yet another Spitfire!!

 

Allan

[593jones]

20 hours ago, Wez said:

 

Buy an Optivisor!

I'd rather squint and spend my money on kits 

[Max Headroom]

5 hours ago, 593jones said:

I'd rather squint and spend my money on kits 

So that’s one happy Starfix customer!! 😆

 

Trevor

[593jones]

1 minute ago, Max Headroom said:

So that’s one happy Starfix customer!! 😆

 

Trevor

My eyes aren't that bad!  Not yet, anyway.  

Edited June 5, 2018 by 593jones

[StevieD]

80th Anniversary of outbreak of WW2 next year so how about a 1/72 PZL P.11c?

 

I went into Foyles bookshop in London recently and couldn’t find one single book that dealt with September 1939. I think we’re in danger of thinking the war started in 1940 at a place called Dunkirk.

 

There’s a P.11c at the Krakow aircraft museum to go look at (although the wheels put on during restoration are all wrong.)

 

How about Gnys' aircraft for the (generally accepted) first allied kill?

 

And could be boxed up as dogfight double with the He111 or Stuka.

 

The latter could represent WW2’s first kill - Frank Neubert’s Stuka over Medwecki’s P.11c.

 

The BBC are planning some mega-series ‘World on Fire’ dealing with 1939 (probably showing cavalry against tanks) so there should be a lot of interest.

[Botan]

6 hours ago, StevieD said:

80th Anniversary of outbreak of WW2 next year so how about a 1/72 PZL P.11c? 

[...]

The BBC are planning some mega-series ‘World on Fire’ dealing with 1939 (probably showing cavalry against tanks) so there should be a lot of interest.

 

Arma Hobby is bringing out PZL P.11c very soon on market. Anyway, looking at Airfix panel lines, I doubt they could make acceptable corrugated duralumin metal skin, which in this case were very, very petite.

Also two companies are bringing put PZL.37 Łoś simultaneously (Fly and IBG), IBG already made PZL,23 Karaś and will make their P.11c too, looks like this theme is pretty well covered, when it comes to main Polish fighters and bombers.

Edited June 10, 2018 by Botan

[fightersweep]

I still rate the Heller PZL 23 and PZL 11 kits. I'm sure they have been overtaken by the current kits, but for their time they were very nice. 

 

Intrigued by this BBC series. Hadn't heard about that one.

[Lord Riot]

Any chance of a 1/72 Andover/HS748?

[Ed Russell]

On 6/11/2018 at 8:34 PM, Lord Riot said:

Any chance of a 1/72 Andover/HS748?

Not really, because the S+M kits have saturated the small market for these relatively unknown aircraft.

http://sandmmodels.co.uk/product/dan-air-hs748-172/

http://sandmmodels.co.uk/product/avro-andover-c1/

748 out of stock at the moment but will probably return once a new market develops or people nag S+M enough.

Andover is available.

[Lord Riot]

1 hour ago, Ed Russell said:

Not really, because the S+M kits have saturated the small market for these relatively unknown aircraft.

http://sandmmodels.co.uk/product/dan-air-hs748-172/

http://sandmmodels.co.uk/product/avro-andover-c1/

748 out of stock at the moment but will probably return once a new market develops or people nag S+M enough.

Andover is available.

 

Thanks for those links. £94 though! 😳

[Phil Gollin]

.

 

Hornby Group released their Annual Report and Chairman's Statement today ;

 

http://otp.investis.com/clients/uk/hornby/rns/regulatory-story.aspx?cid=1477&newsid=1057137

 

19 June 2018

 

Hornby PLC

 

Hornby ANNOUNCES ANNUAL RESULTS

 

Hornby Plc ("Hornby"), the international models and collectibles Group, today announces its results for the year ended 31 March 2018.

 

 Results Highlights

 

·        Revenue of £35.7 million (2017: £47.4 million)

 

·        Reported loss before tax £10.1 million (2017: £9.5 million loss)

 

·        Underlying1 loss before tax of £7.6 million  (2017: £6.3 million loss)

 

·        Reported loss after tax £9.9 million (2017: £9.7 million loss)

 

·        Exceptional items of £2.3 million (2017: £3.3 million) including costs relating to the restructuring of the business and refinancing in 2017

 

·        Net cash at 31 March 2018: £3.9 million (2017: £1.5 million)

 

1 Underlying figures are before amortisation of intangibles (brand names and customer lists), and net unrealised foreign exchange movements on intercompany loans and exceptional items

 

Current Trading

 

Group Sales for the 10 weeks to 8 June 2018 are lower than we expected. This is due to the ongoing impact of insufficient investment in tooling in the past, coupled with late placing of purchase orders with suppliers. There is also a backlog of stock at our retailers from previous decisions to bring sales forward by discounting, which will take time to work through.

 

Despite these difficulties, gross margin for the Group for the 10 weeks to 8 June 2018 was 5 percentage points higher compared with the same period last year, reflecting the absence of discounting initiatives since October 2017.

 

Lyndon Davies, Hornby Chief Executive Officer and Interim Chairman, said:

 

"In the first seven months that I have been at Hornby, we have assessed our position and confronted the reality of the situation in which we find ourselves. Tough decisions have now been taken and we are currently laying down the foundations for our future success. There is a new energy in the business and I am excited with our plans as we re-engage across both domestic and international markets with these well-loved brands."

 

==============================================

 

19 June 2018

 

HORNBY PLC

 

Strategic Report

Executive Chairman's Report

 

As I write this message to you I have been a Hornby employee for seven months, but I have both worked for and adjacent to the brands you own for 40 years. I started on the production line at the old Corgi factory in Wales when I was 16 and have been in the industry ever since.

 

I do not wish to dwell on the mistakes of the past, but please do not think I take them lightly. I have drawn on all my experience in assessing Hornby's current position and formulating my views on the future direction. I have a great deal of passion for these iconic brands and it has pained me to see them fall from grace. You, as shareholders, have had to bear the brunt of it, and so I do not feel the need to reopen those wounds you know so well.

 

My team and I are fully committed to developing a sustainable business that builds on our heritage. My job is to look forward and deliver the results for you. This report is an opportunity for me to give you an honest and humble account of our progress. We need to return this Group to profitability and I need to explain how we intend to do it.

 

The first step is understanding. The next step is fixing the basic issues once they are understood. The final step is to get us back to profitability with a logical and measured strategy that does not imperil the balance sheet. In doing these things we will build long term shareholder value in a sustainable way. Some of our brands have lasted for more than 100 years and it is my view that they should thrive for at least 100 more.

 

The Business Model

 

What we do is simple, but not easy. We have an office in Sandwich where most of our hard-working staff come to work every day. We also have a logistics hub approximately ten miles away in Hersden which most of our product will pass through on the way to both retailers and sometimes directly to customers via our own website. Before Sandwich and Hersden, we had all our operations (including manufacturing many years ago) in Margate, but we have now sold this building and retain only the Hornby visitor centre where we showcase the wonderful heritage of our brands.

 

Over the years we have acquired a diverse portfolio of market leading international brands. These brands are supported by similarly hard-working staff at offices in Italy, France, Spain and Germany. Further afield, we have a warehouse and office in Washington, USA.

 

We aspire to design high quality models and accessories for the toy and hobby markets which are not necessarily low-priced but provide great value for money. Most of the research and development for our product occurs in the UK, but the manufacturing is predominantly executed in China and India, in conjunction with the engineers and support staff at our satellite office in Hong Kong.

 

The design and delivery cycles of our products are quite long, sometimes up to two or three years between inception and delivery to the UK. Our customers tend to be quite particular about what they want and so it takes time to make sure that they will be acceptable to them.

 

The challenge is then to make sure we market our products in such a way as to make them desirable. It is also important to choose the correct retail partners and communication channels that help us cultivate a loyal following of collectors and fans from all age ranges.

 

Knowing the right products to produce and how many of each product to order requires an in-depth knowledge of the individual brands, the history, the competitive landscape and the various customer bases. We have to order all the products up front and wait for them to arrive to truly see how they sell through. We must take risks in this process and there is an element of uncertainty. Managing the cash flows through this cycle of investment is an extremely important part of the process of protecting and enhancing shareholder value.

 

If we order too much of an item that nobody wants, we tie cash up in inventory which means we don't have the cash available to deploy into new and exciting models for the following year. If we order too little, then we don't maximise the profitability and therefore shareholder value. It requires great coordination and deep expertise across engineering, development, marketing and sales to make sure this engine ticks over smoothly.

 

This challenge is made even more difficult by the seasonal element to our business. We are lucky enough to have customers that see our products as worthy of a gift to a friend or family member over the Christmas period. The final three months of the calendar year tend to be very busy for us from a sales perspective and so we have to coordinate the investment in inventory so that it can satisfy this peak in demand.

 

This cycle of development, manufacturing, marketing and distribution is our business engine. We have some wonderful talent in the Group but the engine as a whole doesn't perform optimally. Based on my in-depth knowledge of this industry and following an initial review, many trips to trade shows, retailers, suppliers, manufacturers and other important partners all over the world, I have now developed the understanding and have taken the first steps towards fixing the engine.

The Strategy

 

Over the last few years our competitors have gained strength in the marketplace.  They are stronger and smarter than ever, and we must give ourselves every opportunity to compete successfully with them. In this situation, it is important that our competitors (who I am more than aware read our reports in detail) are not able to pick out, copy and better the moves we make to delight our customers. As a result, I will look to discuss some of the steps we have already taken to fix the engine here, instead of plotting out the battle plan for our competition to follow.

 

1. Discounting

 

From the description of the business model above, hopefully you can see how a business like ours can run into cash flow problems. If we have debt repayments to make and we order too much stock, then the cash that is tied up in the slow selling stock can create a liquidity problem. This can sometimes force us to hastily liquidate stock at a discount to pay the bills.

 

Discounting is a very difficult thing to do without materially affecting the perception of a brand or product. Many brand owners, not just in the toy and hobby sector, have fallen victim to choosing discounting to pay bills or to chase arbitrary sales targets, instead of thinking more about the longer-term impact on the brand.

 

Let us take the collector segment of our customers as an example to illustrate this. If a collector eagerly awaits the launch of the latest locomotive and snaps it up at full price on release day, the likely reason he or she will do this is because they anticipate it will be a desirable item to have, will sell out and will become a store of value over the long term as collectors fight over the few hundred that remain in circulation. If this collector then sees the item on sale for half price a few months after release, not only do they become disillusioned because the scarcity value and desirability seems to not be there, but also, they probably won't buy other products from that brand at the time of release again and will just wait for the inevitable discounts. If you keep following this discounting strategy, you will become more and more reliant on lower and lower prices after every round. You end up never selling anything at the prices you assumed when you made tooling investment and the economics of the business are impaired because the trust is gone in the brand. If you destroy the trust in the brand and collectors no longer see the products as a store of value, they will switch to a collectible that does satisfy their desire.

 

The discounting has also impacted the trust our retailers have in us too. If you take our independent retailers who generally do a great job of cultivating the hobby on our behalf, these are small businesses who have to choose their stock carefully because they have limited balance sheets to fund it. If we sell them a box of Airfix Sea Harriers at full wholesale price and then sell them at half price on a website, these retailers will not be able to compete on price without taking a loss on the item. The best they can do is sit on the stock until we have sold out. It makes life very difficult for them and it certainly makes them think about wanting to buy items at full price from us. It has pushed some of them to buy from competitors instead.

 

In both anecdotes, the sales figure the Group would report to you would be higher than otherwise, but the value of the brands over the long term would have reduced. Discounting is a strategy that wins sales in the short term, but history would suggest that the extra sales today does not compensate for the long-term loss of trust in the brands.

           

The first thing we have done is remove the discounting, which has had the effect of initially reducing sales. The strategy has been welcomed by our retail partners and customers, but this is just the beginning. We are only at the start of the long process of rebuilding trust.

 

In order to do this, we needed to remove the financial straight jacket. We have worked with our lenders and shareholders over the last six months to restructure the balance sheet and have started the new financial year with a structure that will allow us to hold the line. We will be able to sell our carefully curated and desirable models/accessories at the price that optimises the brand values over the long term and cultivates trust with our customers and retail partners.

 

2. Supply Chain

 

We are working to improve the infrastructure in our overseas supply chain to make it function more efficiently. We must guarantee that we get the right amount of product to the market at the right time and at the right cost. When this works efficiently we will greatly improve our sales performance.

 

We have a lack of new product arriving in the UK and therefore can't meet the demand. This is because of two main reasons:

 

- Order quantities were very low per item because of cash constraints and a lack of understanding about which designs would sell better than others.

 

- Not only were orders placed late, but the vitally important technical specifications were also supplied late to our manufacturers.

 

Manufacturers are like sharks - they survive and thrive by moving at pace. We must keep them busy. If we don't they will look elsewhere for orders, which is what they did, further delaying production of our products.

 

After the delays in submitting orders and specifications last year, the situation was similar to trying to book a table at a restaurant at the last minute. As you might expect, most of the restaurants were unavailable, so we desperately rang around and booked the best available table we could find.

 

We then arrived late with less people in the party than we'd promised, we didn't order all of the meals, forgot to tell the kitchen how we wanted our steaks cooked, changed our mind on the side dishes and then complained when we found the restaurant was closing and there was no time for a dessert.

 

The solution here is to pull forward the planning deadlines by six months and choose the right manufacturing partners for the long run. Considering the complexity of our design and ordering cycles it will take time, but the aim is for the new schedule to be fully operational and firing on all cylinders for the financial year ending 31 March 2020.

           

3. Knowledge & Experience

 

The skills required to produce the correct products in the right quantities needs decades of knowledge and experience of what the business has done before, what competitors have done before, what has worked, what hasn't worked and the understanding of why in all these scenarios.

           

We don't sell toothpaste. Our customers don't return once every couple of weeks for a new tube without thinking about it. It is difficult to generalise because the customer base for each brand is unique, but on the whole we have discerning customers who require only very specific models for their layouts, collections, gifts or playrooms. If a product sells well in a particular year, it doesn't necessarily mean the same one will sell well the next year. We are on a constant treadmill of innovation and this needs highly specialised and in-depth knowledge and experience for each of the brands.

           

Initially, I brought Simon Kohler and Tim Mulhall with me to help manage this turnaround. Simon alone spent 35 years with the Group during Hornby's most profitable years, before parting ways under a previous regime. Tim has a wealth of experience in this industry, bringing in knowledge of the international markets. All three of us together have over 100 years of directly applicable experience. This was a good start, but I realised we needed more. In 2018, we will take on more people who combined will add another 100 years of experience. These roles span all the major functions including sales, marketing, purchasing and operations.

           

This concerted effort to fill the Group with people who have decades of directly applicable experience to our rather esoteric markets is not limited to outside hires (or re-hires). Allowing the right internal talent to rise up and giving them a voice has started to yield great results too. Several existing employees with years of experience have been returned to their positions that they held during our most successful years.

           

We are assembling a team of experts who understand the customers and the markets in which each of the brands operate. We also have many stars moving through the ranks who now feel empowered to get on with rebuilding these brands and learn from the more experienced members. It's still only day one and we are rebuilding the foundations, but the early impact on morale and motivation is encouraging.

 

4. Costs

           

As I mentioned above, we have good visibility into the costs that we will need to incur to operate throughout the year. The challenge is to make enough gross profit to cover our operating costs and have some net profit left over for shareholders and/or future investment. In the simplest terms; there are two levers we can pull. We can sell more, and we can reduce our costs.

           

As it currently stands, we need to sell more product if we are to cover our costs. We have reset the business to a more sustainable level of sales without discounting. This has been painful in the short term from a profitability perspective, however, it is the right thing to do to ensure the business has a future. We aim to rebuild sales as the trust returns to our brands, but we are also working tirelessly to do more while spending less.

           

In the last announcement, we told you of the ongoing operational expenditure we had saved. We have found additional savings since the January update, and these savings are being found while improving service levels and product delivery schedules. We are instilling a culture of frugality which means we are doing more with less. This will be a key part of getting us back to profitability.

 

Outlook

           

As I said above, we don't want to give too much away to our competitors, but I can tell you that the changes to the strategy and the way we deal with our customers, suppliers, retailers and manufacturing partners has already yielded many opportunities to save cost, sell more and increase gross margins.

           

Dominant national retailers who were only a distant memory to the business have proactively re-engaged now the discounting has stopped. Licensors of important trademarks are engaging with us again and wanting to broaden ranges and partnerships. Previously lost talent is coming back to the Group and morale is starting to improve in our staff who will be the real champions of this turnaround.

           

Whilst there are green shoots starting to appear for the future, at the time of writing this, we have only been in place for seven months. The long design cycles mean that we have a largely inherited line plan for products being delivered this year. Nonetheless, we are at work doing the best with what we have as we seek to return the Group to profitability.

 

 

On behalf of the Board

Lyndon Davies

18 June 2018 

 

 

[Scooby]

Great read, the one thing he doesn’t address is the quality control issues out of India. I know here in Canada a lot of kits have been returned for missing parts or short shots.

[tangerine_sedge]

1 hour ago, Scooby said:

Great read, the one thing he doesn’t address is the quality control issues out of India. I know here in Canada a lot of kits have been returned for missing parts or short shots.

I think that is covered under - 2. Supply chain.  Airfix turned up late to the restaurant...

 

Edited to add - very positive words, makes me hopeful for the future...

Edited June 20, 2018 by tangerine_sedge

[amblypygid]

I find little to encourage me in that report. The only positives he sees in the business are in the brands and the design and engineering teams. When it comes to deciding what to make, getting it made, and getting it sold, there are problems. Weak sales in the last ten weeks aren't encouraging.

 

Looking at Airfix from my perspective as a modeller, I worry for the future. They make some very good kits at the moment, but they aren't great value for money. I can get an Eduard kit for a similar price but can expect the kit to be higher quality. And I recently bought the AMK 1/72 Kfir; for about the same price as a low-end Airfix kit, the difference in in-box presentation was startling: full colour instructions for a start. I've seen series 1 Airfix kits on sale recently in some shops at nearly £20, possibly linked to the end of discounting. I foresee Airfix ending up as a MOR product: undercut in price by cheaper operations in China, and unable to compete with the higher quality of Eduard, Tamiya, and the like.

Granted, there are many other strings to Hornby's bow, but it will take some real skill to exploit the brand strength and secure the distribution that Airfix will need to keep going for another five years. The investors might well decide that the best option is to sell the brand name while it still has value, rather than tough out a period of non-profitability.