We’ve been following Games Workshop LON:GAW, the Nottingham-based tabletop games and miniatures retailer for nearly two-and-a-half-years, and in that time the geeks and gamers go-to retailer has gone from strength-to-strength.
In its latest trading update, published at the end of last week, the Games Workshop team said that the company has had another strong year, and trading will be ahead of expectations with the anticipation that the GBP4.5bn, FTSE250-listed retailer would have revenues of at least GBP260m for the six-months to 1st December. In the same period last year Games Workshop reported revenues of GBP235.6m.
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Of this the company more than doubled its year-on-year licencing revenue to at least GBP30m (last year licencing revenues were GBP13m for the period). This would see profits of more than GBP120m, significantly breaking through the GBP100m barrier and a 25% improvement in profits y-o-y.
Staring-down shareholder revolt
Earlier in the year Games Workshop management stared-down a shareholder revolt where more-than-a-quarter of its shareholders voted against Games Workshop’s remuneration policy for its executive suite. The company proposed a 150% bonus on base salary for CEO, Kevin Rountree and CFO, Liz Harrison. However, to be fair on GAW, its executives have not seen their base pay increase for two years and they aren’t just trousering the bonuses, as they have use at least 67% of the bonus to buy Games Workshop shares and hold them for at least three-years, and in comparison, to other FTSE250 executives, Games Workshop is at the bottom of the pay charts.
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In its latest update, it seems that management are doing quite well for their shareholders. Games Workshop opened the week (25th November) at 13,773p, up 26% over one-year and up 40% year-to-date. Since we started writing about Games Workshop in detail, Games Workshop’s shares are up over 85%.
As well as the capital gains, shareholders are also getting a bit of the profits. On 16th October the company announce a dividend of 85p/share, taking declared dividends for 2024/25 to GBP185p/share.
Last month the company also promoted independent NED, Mark Lam, to the position of non-executive chairman as John Brewis decided to step down from the position. Lam has been with the business since 2023, originally from Singapore, he has worked in the telcoms, healthcare and retail industries, previously chief technology officer of BT Openreach
Games Workshop to publish half-year results in January
Things continue to burn bright for Games Workshop and it will publish its half-year results in January next year. Built on the back of high-quality miniatures, the firm is a specialist company – they aren’t selling smartphones, so have a limited appeal to the general public – but their customer-base is fiercely loyal, and Games Workshop has done a great job since foundation in 1975 in serving its unique customer base, which seems to be very committed to their hobby, despite the cost.
Moving away from the tabletop to the laptop and flatscreen, Games Workshop’s fifty-year IP is a valuable resource and has inspired many video games, books, and soon-to-be-seen live-action and animated TV and movie productions.
The community it serves is global, and although it has a strong high-street, retail presence across the UK, it also has a strong online presence that interacts with hundreds-of-thousands of people across the world daily.
Away from science-fiction and fantasy, the boring bit of business that Games Workshop does well is focusing on creating a sustainable and increasing cash return year-on-year, which has led to over the years a high return on investment. Since the company listed in 2004, its shares have grown by 1575%.
With a loyal customer base, a strong brand, and a growing digital presence, Games Workshop continues to be a compelling investment. As the company expands its licensing deals and leverages its IP, the future looks bright for this tabletop titan.
