Saturday, 28 January 2012

Hornby goes Mantic about Kings of War

Hornby PLC published an interesting Interim Management Statement/Trading Updateon 27 January 2012  

Hornby is a well known hobby products group, with a wide brand portfolio including  Hornby, Scalextric, Electrotren, Lima, Jouef, Rivarossi, Airfix, Humbrol and Corgi. They issued an update on trading and an Interim Management Statement for the period from 1 October 2011 to 27 January 2012.  

On Business Performance Hornby states that  
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). 

They are happy that their supply chain is performing well, continuing to diversify their supplier base.  The Board says it remains confident in the Group's strategy whilst recognising trading conditions in the UK and the rest of Europe will continue to be challenging for the foreseeable future.  They do seem concerned that these conditions are likely to continue to constrain sales of Hornby and Scalextric items.

They are however expanding their portfolio, which includes a number license and distribution agreements such as 

  • Scalextric "Star Wars" products based on the Lucasfilm series of movies, the first of which will be released in 3D format in February 2012.
  • A comprehensive range of pre-school products at keen price points based on the new TV Series "Olly the Little White Van".
  • A newly tooled range of collectable Corgi die cast toys designed to hit the key £1.99 retail price point. 
  • A recently signed distribution agreement with Reeves International (USA) to distribute their range of Breyer Horses in the UK. This range of collectable horses brings Hornby into the arena of girl and adult female collectables, with a flagship launch of "War Horse" collectables 
  • A global license agreement with Mind Candy for its global kids entertainment brand 'Moshi Monsters'. 

And most interesting of all is the single paragraph where it states 
  • 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. 

So, Hornby have a global distribution agreement with Mantic for the distribution of their Kings of War.  I take it that this would also cover Warpath.  But it does not specify Warpath. Maybe Hornby want to concentrate on the Fantasy line first to see how it goes.

Many thanks to the guys on The Mantic Fanatics Facebook Group for the heads up.

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