I Read The News Today Oh Boy! 3-Apr-2018

Tuesday, Apr 03 2018 by

Morning all!

Hope you all had a great (long) weekend.

Hornby ( Hornby (LON:HRN) ) – 23.03p – £28.8m – PER 18.0

Trading Update – Sticking with the “no use of discounting” approach has affected sales (as has late delivery) - Sales and profits lower than last year. Expects to have finance in place by June to support a return to profitability – Barclays have waived a recent quarter breach of covenants (due to the sales and profits issue mentioned above).

I just feel there’s more risk here to the downside than to the upside, at least in the short to medium term. I’ll sit on the side-lines for now.

Flybe ( Flybe (LON:FLYB) ) – 33.5p – £72.6m – PER 10.4

Trading Update – Weather impact -£4m on Revenue.

Never really been tempted here and this update hasn’t changed that view.

Renew Holdings ( Renew Holdings (LON:RNWH) ) – 380p – £237.8m – PER 10.8

Trading Update For The 6 Months To End March 2018 – In-line with the Board’s expectations, expecting to report an increased forward order book when the interims are published. Expects Net Cash at the end of the year, as forecast.

Looks OK but I will remain Neutral.

Air Partner ( Air Partner (LON:AIR) ) – 143.5p – £74.9m – PER 15.6

Year End Update – Something about an accounting balls up to the tune of £3.3m.

No idea of the impact here. The last Trading Update For The 12 Months To End January 2018 mentioned expectations of PBT of at least £6.4m. Does this mean PBT will be halved? I hold but may be looking for a sharp exit this morning.

As always, all comment most welcome – Have a great day!

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Hornby Plc is a holding company. The Company is engaged in developing, designing, sourcing and distribution of hobby and interactive products. The Company distributes its products through a network of specialists through its online activities and various retailers throughout the United Kingdom and overseas. The Company has operations in the United Kingdom, the United States, Spain, Italy and the rest of Europe. The Company offers its products under various brands, such as Hornby, Scalextric, Airfix, Humbrol and Corgi. Its subsidiary, Hornby Hobbies Limited, offers products under various categories, which include Train Sets, Locomotives, Train Packs, Tracks and Extras, Wagons and Coaches, and Spares and Accessories. Its subsidiaries include Hornby Espana S.A., which is engaged in the development, design, sourcing and distribution of models, and Hornby America Inc., Hornby Italia s.r.l, Hornby France S.A.S and Hornby Deutschland GmbH, which are distributors of models. more »

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Flybe Group PLC is a United Kingdom-based company. The Company is a shell company.

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Renew Holdings plc operates as a contractor in engineering services and specialist building. The Company's activities are carried out in the United Kingdom with some development activities in the United States. The Company's segments include Engineering Services, which comprises the engineering activities, which are characterized by the use of the Company's engineering workforce, supplemented by specialist subcontractors where appropriate, in a range of civil, mechanical and electrical engineering applications and; Specialist Building, which comprises the building activities, which are characterized by the use of a supply chain of subcontractors to carry out building works under the control of the Company as principal contractor, and Central activities, which include the sale of land for development, the leasing and sub-leasing of some United Kingdom properties and the provision of central services to the operating subsidiaries. more »

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  Is LON:HRN fundamentally strong or weak? Find out More »

7 Posts on this Thread show/hide all

MrContrarian 3rd Apr '18 1 of 7

My morning smallcap tweet:

1Spatial (LON:SPA), Ukrproduct (LON:UKR), Hornby (LON:HRN), Flybe (LON:FLYB), Air Partner (LON:AIR), IG Design (LON:IGR)

1Spatial (SPA) wins £1.6m contract over 5 years. Current T/O is £22m.
UKRproduct Group (UKR) expects to report increased FY revenue and gross margin. An overall loss for the year is expected, due to the negative impact of exchange rate differences. No forecasts.
Hornby (HRN) has stopped shooting itself in the foot after the supply debacle: "some trust is coming back with our retailers and customers." "There was an improvement in sales towards the end of the financial year as some of the European product started to arrive, but as expected, the Group sales and profits were lower than last year." Seeking a larger financing facility with new lender. Barclays gives covenant waiver. "Whilst we have managed to make a lot of progress in the first few months, there is still much more to do in terms of reducing costs, streamlining processes and adding routes to market."
Flybe Group (FLYB) Q4 load factors were up by 6.8 ppts to 73.5%. But weather in February and March led to airport closures and flight cancellations. Estimates hit of £4m rev inc. additional care and assistance costs. Very early indications of summer trading encouraging.
Air Partner (AIR) has overstated profit in last 8 years by failing to account for bad debts correctly. "Principally relates to the collection of receivables from customers and accounting for uncollected amounts since financial year 2010/11. Certain uncollected receivables were inappropriately offset against deferred income rather than being expensed to the income statement in the appropriate financial year. This is a non-cash item and has no bearing on the Company's cash balances." Total £3.3m. "At no point was a customer, operator or supplier impacted or disadvantaged. Further, the Group continues to maintain a strong net cash position."
IG Design Group (IGR) sells property for £2.5m for a gain of £1.1 - £1.3m.

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andrea34l 3rd Apr '18 2 of 7

I sold RNWH at a small loss at 419p in November last year, and the price has obviously drifted since. I sold after the last results, when the price took a hit, as I thought the outlook seemed variable, and one division was seen as low growth. On this basis, I would not be tempted to re-invest at any point.

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BlueFrew 3rd Apr '18 3 of 7

Air Partner (LON:AIR) - Been pondering all morning what to do. I've decided to sell since the investigation is only at a preliminary stage. Were the auditors incompetent or was there something more sinister going on. Holding would mean hoping there is only 1 cockroach in the kitchen, to paraphrase Warren Buffett. In addition, my investment case was that it was a well run company which was adding better quality earnings, through acquisition, to offset the cyclical nature of the private jet business. I can't honestly say that it is well run after this debacle.

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matylda 3rd Apr '18 4 of 7

In reply to post #349008

Yes, I subsequently decided to sell too.

My reckoning being the FD probably has to go now which is more bad news and then there's the further investigation to come. If the further investigation is worse, well that's more bad news.

Decided - Better out wishing you were in than in wishing you were out!

Blog: Briefed Up
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BlueFrew 3rd Apr '18 5 of 7

In reply to post #349028

Yes, I think the news flow in the short to medium term is going to be poor. Non cash item or not, I presume the results announced at the end of the month are going to look very bad. Lots of things could potentially drive the share price much lower, not much to drive it higher. It may be investable again once the investigation is complete, but until then it would have been too much like gambling for my liking.

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matylda 3rd Apr '18 6 of 7

In reply to post #349043


Blog: Briefed Up
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herbie47 3rd Apr '18 7 of 7

I would sell on bad news.

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