Games Workshop’s final half-year report for 2021 to 2022 is out. The company has grown revenue but made less profit. It’s taking cash in, but something’s eating it up more quickly.
One of those costs is Brexit, which has resulted in the UK leaving the trading ecosystem the country once fought to join.
In the statement, Games Workshop says;
In the period, we have continued to use the new working arrangements adopted following the UK’s exit from the European Union in January 2021. This has resulted in additional shipping and freight costs of £2 million in the six months to 28 November 2021 and is included as part of the £5.6 million increase in input and carriage cost increases discussed earlier in gross margin. In addition, from a cash flow perspective, there are delays in the repayment of VAT from some European tax authorities.
The new post-Brexit system has pushed costs up by £2m in six months, and the company has assigned nearly £6m to cover the expected hit.
Revenue in the six months to 29 November 2020 was £186.m, and the six months to 28 November 2021 it had grown to £191.5m.
However, profit before taxation was £91.6m in the 2020 period and is now £88.2m.
eCommerce down
There are some twists and turns in the report intended for financial people, but which might speak to non-financial but geeky minds. For example, eCommerce is down for the wargaming giant.
Games Workshop says that online says are down 10% compared to last year’s same period. Why? Customers have a choice, Games Workshop says, and buy their minis from independent retailers.
Many gamers, rightly, try their best to support their friendly local gaming store or indie website.
Speaking of websites, Games Workshop has confirmed they’ve signed off a first phase of the web store upgrade and have set aside a capital investment of about £6 million. They’ve spent £0.3 million so far.
Here’s hoping they get into affiliate marketing and working with bloggers like Geek Native. Ha.
Politically correct Games Workshop
Games Workshop says they don’t want to be “politically correct”, but I suspect they’re using it strangely, perhaps as some people might use “virtue signalling”.
Here’s the exact quote from “Social responsibility” from their “Risks and uncertainties” section!
… we don’t intend to ‘greenwash’ or to be ‘politically correct’. We believe we are already good corporate citizens and we have been making some good progress quietly in the background. We are looking for ways we can support global initiatives including climate change, diversity and equality. We have recruited a senior manager to document a realistic plan to make some progress, forever.
It’s good that the model maker doesn’t want to greenwash. That generally means trying to convince us they’re not part of the climate crisis, while not actually doing enough to fight it.
In the “Key Priorities” section earlier in the report, they confirmed “Social responsibility and sustainability” was a priority.
Our new head of social responsibility and sustainability will have joined us by the time you are reading this. This new recruit, we hope, brings with them a wealth of expertise and experience on this key subject. An area we would like to see some significant progress on in the years ahead. Working alongside our departmental heads across the global business, they will be reviewing and redefining our sustainability action list. Once complete, we intend to communicate this plan to our shareholders, customers and staff to ensure that everyone is clear on both our priorities and our progress.
They don’t, of course, confirm they have got a plan to be more sustainable or responsible here. Games Workshop has someone looking at what the company feels like it should do.
The report signs off with notes of concern about COVID-19 and the intent to make the best miniatures in the world.
Quick Links
- Games Workshop’s November 2021 Half Year Report.
Image credit: Andres Canavesi
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