|Games Workshop Group
||EPS - Basic
||Market Cap (m)
Games Workshop Share Discussion Threads
Showing 1901 to 1921 of 1925 messages
|I'd chip in with a few comments to some recent posts.
"GAW's weakness is that it is a one product company (fantasy models)"
Yes and no. That's a little bit like describing BMW as a one product company in that they produce cars. GAW have broadened their range over the last year or two and while it is still in the niche gaming sector, they offer a number of different options for those in the hobby.
They also recently went back into producing one off table top and board games, which I think is a very good move. This is a hugely growing market globally.
"GAW has an almost monopolistic market position"
On the high street yes but not within the hobby. Crowd funding has allowed a lot of smaller companies to start up in this area and GAW have probably the most number of competitors that they have ever had. But this is actually a good thing as it is attracting more people into GAW's market place.|
|Royalty Income v OpProfit (ex royalties & exceptionals)
2006 - £1.2m £3.0m
2007 - £1.4m £0.8m
2008 - £1.7m £3.2m
2009 - £3.5m £3.5m
2010 - £3.0m £13.0m
2011 - £2.5m £12.8m
2012 - £3.5m £15.6m
2013 - £1.0m £20.2m
2014 - £1.4m £15.4m
2015 - £1.5m £15.0m
2016 - £5.9m £10.9m
2017H1 £3.1m £ 9.7m adjusting back for accounting change.
I think this shows that royalties have applied a smoothing effect to an extent since they became more significant with 2013 and 2016 being good examples.|
|What a treat to see a board with grown up discussion about pros and cons of a company, and some useful research. Award yourselves chocolate gold stars...|
2001 - £0.08m
2002 - £0.12m
2003 - £0.21m
2004 - £0.20m
2005 - £0.37m
2006 - £1.2m
2007 - £1.4m
2008 - £1.7m
2009 - £3.5m
2010 - £3.0m
2011 - £2.5m
2012 - £3.5m
2013 - £1.0m
2014 - £1.4m
2015 - £1.5m
2016 - £5.9m
Seemed to sail through the GFC pretty well royalty wise.|
|The capex requirements are low: the tooling and moulding kit was upgraded a few years back and the visitor centre in Nottingham was the last meaningful capex. Nothing major on the horizon.
Licensing revenue is becoming more important as the company is actively seeking to exploit the IP. Previously it was passive and v strict on controlling imagery etc and hence the v clunky Space Marines movie!!|
|Mozy, yes but they always do this, in the case of GAW it's not a "loss leader" more of a "lower profit leader".GAW has to attract new customers on price and then charge them an arm and a leg for a piece of shrubbery.|
|From my experience the consumer is the parent of the customer. For the hard core gamers they sometime look down and out adults but I found they were often from affluent families and/or long term students with jobs. This is a really expensive hobby.|
|My own gut feeling is that there is no relationship (or very little) between retail sales and the UK economy. GAW has an almost monopolistic market position, with its main consumer being someone that is unlikely to work anyway.
Also I dont think there will be must corrolation between royalty revenues and the economy. These are stand alone titles and IP that will be produced due to the fan base and computer gaming markets. Again its consumers are mostly teenagers who dont experience the ups and downs of the economy.
Its why i like GAW as a business. High Margins, High ROCE, and uncorrolated to the market.|
|Unfortunately, the royalties have always been very "lumpy" and often correlate to an increase in model sales. I prefer a word like lumpy than volatile which sounds more like the wife. Royalties have increased significantly when the economy and consumer sentiment is good. Game businesses must be investing in computer or board games early in the economic cycle because of lead times, otherwise they miss the cycle. Retail is a high risk business these days.During economic upswings, if there is a new strong theme for GAW all the better. I haven't been through past royalty revenues over 20 years to analyse cyclical relationships but I suspect they correlate well to the economic cycles rather than GAW themes.Hopefully someone has more time than me to analyse the long term correlation between the UK economy and royalties. That would be a revealing analysis either way.|
|Nod, I'm no expert so happy to be corrected but isn't the cyclical nature caused by ebb and flow of individual GAW ranges eg LOTR rather than fantasy figures generally? The increase in royalties may perhaps also flatten out any cyclical waves?|
|We don't know what GAW's capital investments may be in 2017, so there is not much point in speculating what they decide is unneeded cash. They have indicated expansion in Asia where they recently opened a regional office in Hong Kong. Perhaps other regions would benefit from a GAW office rather than relying on indies developing the brand awareness.GAW's weakness is that it is a one product company (fantasy models), so when there is a downturn in a core product for whatever reason they take a big hit for a few years. I don't have a solution for an anti-cyclical product. Any ideas?|
|Royalties have though been on a steeply upward trajectory over recent half years, I'd be very surprised if they dropped away to nothing and I'd be even more surprised if they'd modeled that. Think they're being very conservative across the board.|
|23p in the 2H wouldn't be too far off if they repeated the 1H but without royalties - which are hard to accurately forecast - I'm guessing that's how they derived their figure.|
|Nice analysis Woozle - cheers|
|Why the GAW forecasts are too low.
Peel Hunt, the housebroker has penciled in 57p for Y/E 2017.
To derive this figure, they have taken H1 2017 of 34p and added 23p. This latter number is too low on a number of fronts:
- in H2 2016 company made than 28p.
- in H1 2017 the company made £10.5m op profit versus £10.9m for 2017. IN OTHER WORDS, IN THE FIRST HALF OF 2017 GAW MADE ALMOST AS MUCH AS THE WHOLE OF 2016! AND THESE NUMBERS EXCLUDE ROYALTY INCOME
- in H2, the company usually makes 60% of their earnings as this period covers Xmas
- anecdotal evidence is that strong trading continued into Dec
If we apply the 40/60 split to the current year, we'd expect EPS of 51p in H2, giving a full year figure of potentially 85p. That puts GAW on less than 10x's and given the large cash generation - we can expect 40p more of dividends - a yield for the current year of 8.5%.
I think the lack of outlook is probably due to the fact that they want a few more months of trading but I'd expect a large upgrade to forecasts and dividend in the coming months.
|When I spoke to my local store manager he said they were selling across the board, he may have been deliberately vague but in the 30 mins or so I was in the shop chatting it was mainly consumables that were sold- large spray cans of black uncoat, brushes etc. That's not to say they aren't being used to build Age of Sigmar armies.
Royalties have also been very positive for the last 2 half years which is straight on the bottom line.
Certainly if they replicate H1 performance in H2 you won't be able to buy at less than £8 and picked up some chunky dividends.|
|So, is "Age of Sigmar" all that is driving increased sales here? Would just be interested to get a better handle on their revised business model before buying any shares.
|Great set of interims this morning.
Only negatives for me were lack of outlook statement and nothing mentioned re Xmas sales, however, it is pretty clear that the company is back on the right footing and that given the strength of the H1 numbers and cash generation the results for the full-year are extremely likely to be very strong.
GAW remains a medium term solid hold for me.|
|For long time GAW investors this sentence is the key take away:
"I'm delighted that our new approach to marketing and merchandising has been received well."
Marketing, advertising etc have long been dirty words at the company as it relied exclusively on word of mouth. This marks a big shift strategically for the business and it seems to be making a big difference.
Anecdotally, Age of Sigmar replacing WH Fantasy is is also paying off, attracting new hobbyist and bringing old players back. It's easier to play and, more importantly, cheaper because it doesn't rely on having large armies (which was creating a barrier to new players). It seems, now, that after years of waiting (about 10 !) that GAW may be entering a sustained growth phase!
|Well done GAW! Look forward to the next Divi!|
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