Shares are up by 4.3% for Games Workshop after the market liked the company’s financial performance. The Nottingham filed the latest half-year figures this morning.
Online sales are up by 15% to £24.2 million. Money from its own stores is up 6.3% and to £45.3 million, a figure which includes 19 new stores.
Meanwhile, Games Workshop’s trade division increased a whopping 23.9% to £76.1 million. The addition of some 200 new trade accounts has made a considerable impact.
Licensing deals have increased from £5.2 million in the previous six-month period to £10.7 million.
CEO Kevin Rountree, who joined in 2015, said;
Our business and the Warhammer Hobby continue to be in great shape. We are pleased to once again report record sales and profit levels in the period.”
The global team have worked their socks off to deliver these great results. My thanks go out to them all.”
The company showed its thanks to the staff last year by giving everyone a £2,500 bonus.
Investors like Games Workshop
The investment research firm Edison Group suggests tabletop miniature gaming could be worth more than $12 billion by 2023.
Edison estimates that Games Workshop will continue to increase profits for the next few years.
Ian Sturrock, a senior lecturer in Game Design and Games Studies and Teesside University, told the finance site This Is Money that Games Workshop could conquer the minis market.
To investors and retail staff alike, the company has its strategy as ‘total global domination.”
It barely acknowledges the existence of competing games or miniatures, perhaps with good reason; it has no real competitors who can match its vertical integration in the marketplace.”
Sturrock may be right as Games Workshop’s nearest competitor only makes 2% of what the British giant does.
The investors who analyse the games market credit more straightforward rules and the success of Warhammer: Age of Sigmar as wins for Games Workshop. They also point to the cheaper to run, 1-person-managed, stores as a factor.
The (possibly) forthcoming TV series based on the Warhammer 40K novel series Einsenhorn has helped convince investors that geek interest will remain high in Games Workshop titles.
Games Workshop’s infrastructure is impressive, allowing it to operate with a spectacular return on capital.
Microsoft gremlins
However, there are some potential gremlins in the future. The Register noticed this IT warning in the report.
We are changing our core ERP system in the UK, which is a complicated project with the risk of widespread business disruption if it is not implemented well. It is being implemented and managed by a strong internal project team and specialist ERP software consultants,”
ERP, or Enterprise Resource Planning, systems are used to manage how the company runs. This usually means how essential sets of data and knowledge are joined up and shared securely.
The Register’s vulture-eye has noticed Games Workshop are recruiting for Microsoft Dynamics experts.
IT spending is an area where Games Workshop shows some weakness. In the full-year report that ended 31st of July, the model maker had spent £1,000,000 more on software and hardware compared to the year before.
Sources: The Register, Interactive Investor and This is Money.
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