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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Games Workshop Group Plc | LSE:GAW | London | Ordinary Share | GB0003718474 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 140.00 | 1.45% | 9,775.00 | 9,770.00 | 9,780.00 | 9,775.00 | 9,595.00 | 9,665.00 | 54,983 | 15:08:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Games,toys,chld Veh,ex Dolls | 470.8M | 134.7M | 4.0881 | 23.80 | 3.21B |
From Apr 2019 to Apr 2024
TIDMGAW
RNS Number : 7247T
Games Workshop Group PLC
10 January 2017
PRESS ANNOUNCEMENT
GAMES WORKSHOP GROUP PLC
10 January 2017
HALF-YEARLY REPORT
Games Workshop Group PLC ("Games Workshop" or the "Group") announces its half-yearly results for the six months to 27 November 2016.
Highlights:
Hot Features
Premium
Six months Six months
to to
27 November 29 November
2016 2015
Revenue GBP70.9m GBP55.3m
Revenue at constant currency* GBP62.7m GBP55.3m
Operating profit pre-change
in accounting estimates
and royalties receivable GBP9.7m GBP4.7m
Impact of change in accounting GBP0.8m -
estimates
Operating profit pre-royalties GBP10.5m GBP4.7m
receivable
Royalties receivable GBP3.3m GBP1.5m
Operating profit GBP13.8m GBP6.2m
Pre-tax profit GBP13.8m GBP6.3m
Cash generated from operations GBP19.6m GBP8.6m
Basic earnings per share 34.0p 14.9p
Dividend per share declared
in the period 25p 20p
Kevin Rountree, CEO of Games Workshop, said:
"Our business and our Hobby are in good shape.
We are pleased to report sales and profit growth in the period across all channels. This improvement was built on a considerable team effort across the business."
...Ends...
For further information, please contact: Games Workshop Group PLC 0115 900 4003 Kevin Rountree, CEO Rachel Tongue, Group Finance Director Investor relations website investor.games-workshop.com General website www.games-workshop.com
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation.
*Constant currency revenue is calculated by comparing results in the underlying currencies for 2015 and 2016, both converted at the average exchange rates for the six months ended 29 November 2015.
FIRST HALF HIGHLIGHTS
Six months Six months
to to
27 November 29 November
2016 2015
Revenue GBP70.9m GBP55.3m
Revenue at constant currency* GBP62.7m GBP55.3m
Operating profit pre-change
in accounting estimates and GBP9.7m
royalties receivable GBP4.7m
Impact of change in accounting GBP0.8m -
estimates
Operating profit pre-royalties GBP10.5m GBP4.7m
receivable
Royalties receivable GBP3.3m GBP1.5m
Operating profit GBP13.8m GBP6.2m
Pre-tax profit GBP13.8m GBP6.3m
Cash generated from operations GBP19.6m GBP8.6m
Basic earnings per share 34.0p 14.9p
Dividends per share declared
in the period 25p 20p
Revenue by segment
Six months Six months Six months Six months
to to to to
27 November 29 November 27 November 29 November
2016 2015 2016 2015
Constant Constant Actual Actual
currency currency rates rates
Trade GBP24.9m GBP22.4m GBP29.3m GBP22.4m
Retail GBP25.8m GBP21.5m GBP29.2m GBP21.5m
Mail order GBP12.0m GBP11.4m GBP12.4m GBP11.4m
Operating profit by segment
Six months Six months Six months Six months
to to to to
27 November 29 November 27 November 29 November
2016 2015 2016 2015
Constant Constant Actual Actual
currency currency rates rates
Trade GBP6.6m GBP5.8m GBP8.8m GBP5.8m
Retail GBP(2.2)m GBP(3.1)m GBP(2.4)m GBP(3.1)m
Mail order GBP6.4m GBP6.2m GBP6.7m GBP6.2m
Product GBP5.0m GBP4.7m GBP6.1m GBP4.7m
and supply
Royalties GBP2.6m GBP1.2m GBP3.0m GBP1.2m
Other costs GBP(8.1)m GBP(8.6)m GBP(8.4)m GBP(8.6)m
INTERIM MANAGEMENT REPORT
Our business and our Hobby are in good shape.
We are pleased to report sales and profit growth in the period across all channels. This improvement was built on a considerable team effort across the business.
In the period we focused and delivered on our operational plan and are making good progress on our strategic initiatives. I'm delighted that our new approach to marketing and merchandising has been received well. It's early days, we're having fun, and the feedback we've had is that our customers are enjoying the changes too. I intend to build on these improvements in the second half.
One of our key measures of our performance is return on capital. During the period our return on capital grew from 36% at November 2015 to 40% at November 2016. This was driven by the increase in operating profit before royalties receivable, offset slightly by an increase in average capital employed**.
Sales
Reported sales grew by 28% to GBP70.9 million for the period. On a constant currency basis, sales were up by 13% from GBP55.3 million to GBP62.7 million; split by channel this comprised: retail GBP25.8 million (2015: GBP21.5 million), trade GBP24.9 million (2015: GBP22.4 million) and mail order GBP12.0 million (2015: GBP11.4 million).
Retail
This channel showed growth in all territories. We opened, including relocations, 17 stores including our first stores for some time in Singapore, Malaysia and Hong Kong. After closing 8 stores, our net total number of stores at the end of the period is 460.
The key priority in the period reported has been to give our store managers the appropriate product and sales support to help them recruit new customers, retain our existing customers and re-recruit lapsed customers. Recruiting new store managers remains a key area of focus.
Trade
All key territories achieved growth. In the period, our net number of trade outlets increased by 60 accounts.
Mail order
Sales in our online shops were up 8%. Our 'Made to Order' and 'Last Chance to Buy' web store initiatives, aimed at ensuring our customers have access to our broader range, have performed well.
Non-core
This includes licensing, digital, export, non-strategic trade accounts, book trade, magazine and mass-market opportunities. Non-core sales were up from GBP7.6 million to GBP9.8 million with sales growth reported across all areas. In the period, royalties receivable from licensing increased from GBP1.5 million to GBP3.3 million.
We launched in the period new editions of our White Dwarf magazine and Blood Bowl game, the first of many new products from our Specialist Design Studio. Both have sold through well.
Operating profit
Operating profit before royalty income increased by GBP5.0 million to GBP9.7 million (2015: GBP4.7 million) before the change in accounting estimates described below. On a constant currency basis, operating profit before the change in accounting estimates increased by GBP2.0 million to GBP6.7 million.
With effect from 30 May 2016 the Group implemented a change in accounting estimates for the amortisation of development costs intangible assets and for the depreciation of moulding tools. The impact of the change for the six months to 27 November 2016 is an increase in operating profit of GBP0.8 million. The change in accounting estimates is described in note 2 to this half-yearly report.
On a constant currency basis, royalty income increased by GBP1.3 million to GBP2.8 million (2015: GBP1.5 million).
Total operating profit increased by GBP7.6 million to GBP13.8 million (2015: GBP6.2 million). The net impact in the six months to 27 November 2016 of exchange rate fluctuations was a gain of GBP3.5 million. It is not the Group's policy to hedge against foreign exchange rate exposure.
Operating expenses increased by GBP5.3 million due to an investment in sales facing activities relating to new retail store costs. Costs remain a key area of focus.
Capital employed
Average capital employed** increased by GBP2.7 million to GBP41.8 million. The book value of tangible and intangible assets increased by GBP2.4 million, mainly due to the ongoing investment in the implementation of a new ERP system and the change in accounting estimates for development costs and moulding tools whilst trade and other receivables increased by GBP0.8 million, inventory increased by GBP1.6 million due to the timing of product launches, provisions increased by GBP0.5 million and current liabilities increased by GBP1.6 million.
Cash generation
During the period, the Group's core operating activities generated GBP14.5 million of cash after tax payments (2015: GBP6.6 million). The Group also received cash of GBP3.6 million in respect of royalties in the year (2015: GBP1.1 million). After purchases of tangible and intangible assets and product development costs of GBP6.8 million (2015: GBP6.3 million), dividends of GBP8.0 million (2015: GBP6.4 million) and foreign exchange gains of GBP0.8 million (2015: GBPnil) there were net funds at the end of the period GBP15.9 million (2015: GBP7.8 million).
Dividends
In the period we paid a dividend of 25 pence per share (2015: 20 pence) amounting to GBP8.0 million (2015: GBP6.4 million).
Risks and uncertainties
The board has overall responsibility for ensuring risk is appropriately managed across the Group. As discussed in the 2016 annual report, the top five risks to the Group are reviewed at each board meeting. The risks are rated as to their business impact and their likelihood of occurring. In addition, the Group has a disaster recovery plan to ensure ongoing operations are maintained in all circumstances. The principal risks for the balance of the year are the same as those identified in the 2016 annual report and are discussed below:
ERP change. This is a complicated project with the risk of widespread business disruption if it is not implemented well.
Store manager recruitment. This comprises both recruitment of managers for new stores as well as replacing poor performing managers. Retail is our primary method of recruiting new customers and so we need great managers in all our stores.
Supply chain. We are changing our mail order warehouse system. This is part of an ongoing programme of continuous improvement for these warehouse systems. As with any system change there are risks associated with the transition.
Range management. We constantly review our range to ensure that we are exploring all opportunities.
Distractions. Anything else that gets in the way of us delivering our goals.
The greatest risk is the same one that we repeat each year, namely, management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule. I will do my utmost to ensure that this does not happen.
Going concern
After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they have adopted the going concern basis in preparing this condensed consolidated interim financial information.
Statement of directors' responsibilities
The directors confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely: an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of (i) the principal risks and uncertainties for the remaining six months of the financial year; (ii) material related-party transactions in the first six months and (iii) any material changes in the related-party transactions described in the last annual report.
There have been no other changes to the board since the annual report for the year to 29 May 2016. A list of all current directors is maintained on the investor relations website at investor.games-workshop.com.
By order of the board
K D Rountree
CEO
R F Tongue
Group Finance Director
10 January 2017
*Constant currency revenue is calculated by comparing results in the underlying currencies for 2015 and 2016, both converted at the average exchange rates for the six months ended 29 November 2015.
**We use average capital employed to take account of the significant fluctuation in working capital which occurs as the business builds both inventories and trade receivables in the pre-Christmas trading period. Return is defined as operating profit before royalty income, and the average capital employed is adjusted by deducting assets and adding back liabilities in respect of cash, borrowings, taxation and dividends.
CONSOLIDATED INCOME STATEMENT
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Notes GBP000 GBP000 GBP000
Revenue 3 70,935 55,259 118,069
Cost of sales pre-change in accounting
estimates* (22,171) (16,802) (37,438)
Cost of sales impact of change in accounting 798 - -
estimates*
------------------------------------------------- ------ --------------- -------------- -----------
Cost of sales (21,373) (16,802) (37,438)
---------- ---------- ----------
Gross profit 49,562 38,457 80,631
Operating expenses (39,065) (33,753) (69,710)
Other operating income - royalties receivable 3,261 1,536 5,939
---------- ---------- ----------
------------------------------------------------- ------ --------------- -------------- -----------
Operating profit pre-change in accounting
estimates* 12,960 6,240 16,860
Operating profit impact of change in accounting 798 - -
estimates*
------------------------------------------------- ------ --------------- -------------- -----------
Operating profit 3 13,758 6,240 16,860
Finance income 29 47 93
Finance costs - - (5)
---------- ---------- ----------
Profit before taxation 5 13,787 6,287 16,948
Income tax expense 6 (2,857) (1,506) (3,452)
---------- ---------- ----------
Profit attributable to owners of the parent 10,930 4,781 13,496
====== ====== ======
Basic earnings per ordinary share 7 34.0p 14.9p 42.1p
Diluted earnings per ordinary share 7 33.9p 14.9p 42.0p
Basic earnings per ordinary share pre-change in
accounting estimates* 7 32.0p 14.9p 42.1p
Diluted earnings per ordinary share pre-change
in accounting estimates* 7 31.9p 14.9p 42.0p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Profit attributable to owners of the parent 10,930 4,781 13,496
Other comprehensive income/(expense)
Items that may be subsequently reclassified to profit or loss
Exchange differences on translation of foreign operations 2,687 (140) 485
--------- ---------- ----------
Other comprehensive income/(expense) for the period 2,687 (140) 485
--------- ---------- ----------
Total comprehensive income attributable to owners of the parent 13,617 4,641 13,981
====== ======= =======
The following notes form an integral part of this condensed consolidated interim financial information.
*With effect from 30 May 2016 the Group implemented a change in accounting estimates for the amortisation of development costs intangible assets and for the depreciation of moulding tools. The change in accounting estimates is described in note 2 to this condensed consolidated interim financial information.
CONSOLIDATED BALANCE SHEET
As at As at As at
27 November 29 November 29 May
2016 2015 2016
Notes GBP000 GBP000 GBP000
Non-current assets
Goodwill 1,433 1,433 1,433
Other intangible assets 9 12,824 9,409 10,501
Property, plant and equipment 10 22,112 22,588 22,621
Trade and other receivables 1,413 1,220 929
Deferred tax assets 2,881 3,289 3,219
---------- ---------- ----------
40,663 37,939 38,703
---------- ---------- ----------
Current assets
Inventories 11,224 9,404 8,540
Trade and other receivables 11,507 10,195 10,120
Current tax assets 982 833 725
Cash and cash equivalents 15,877 7,781 11,775
---------- ---------- ----------
39,590 28,213 31,160
---------- ---------- ----------
Total assets 80,253 66,152 69,863
---------- ---------- ----------
Current liabilities
Trade and other payables (16,761) (12,555) (12,844)
Current tax liabilities (2,689) (1,950) (1,924)
Provisions 11 (838) (674) (823)
---------- ---------- ----------
(20,288) (15,179) (15,591)
---------- ---------- ----------
Net current assets 19,302 13,034 15,569
---------- ---------- ----------
Non-current liabilities
Other non-current liabilities (416) (308) (488)
Provisions 11 (662) (577) (621)
---------- ---------- ----------
(1,078) (885) (1,109)
---------- ---------- ----------
Net assets 58,887 50,088 53,163
====== ====== ======
Capital and reserves
Called up share capital 1,606 1,605 1,606
Share premium account 10,533 10,435 10,519
Other reserves 4,354 1,042 1,667
Retained earnings 42,394 37,006 39,371
---------- ---------- ----------
Total equity 58,887 50,088 53,163
====== ====== ======
The following notes form an integral part of this condensed consolidated interim financial information.
CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
Called up Share
share premium Other Retained Total
capital account reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 29 May 2016 and 30 May 2016 1,606 10,519 1,667 39,371 53,163
Profit for the six months to 27 November 2016 - - - 10,930 10,930
Exchange differences on translation of foreign
operations - - 2,687 - 2,687
---------- ---------- ---------- ---------- ----------
Total comprehensive income for the period - - 2,687 10,930 13,617
Transactions with owners:
Share-based payments - - - 82 82
Shares issued under employee sharesave scheme - 14 - - 14
Deferred tax credit relating to share options - - - 42 42
Dividends paid to Company shareholders - - - (8,031) (8,031)
---------- ---------- ---------- ---------- ----------
Total transactions with owners - 14 - (7,907) (7,893)
---------- ---------- ---------- ---------- ----------
At 27 November 2016 1,606 10,533 4,354 42,394 58,887
====== ====== ====== ====== ======
Called up Share
share premium Other Retained Total
capital account reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 31 May 2015 and 1 June 2015 1,603 10,218 1,182 38,522 51,525
Profit for the six months to 29 November 2015 - - - 4,781 4,781
Exchange differences on translation of foreign
operations - - (140) - (140)
---------- ---------- ---------- ---------- ----------
Total comprehensive (expense)/income for the period - - (140) 4,781 4,641
Transactions with owners:
Share-based payments - - - 77 77
Shares issued under employee sharesave scheme 2 217 - - 219
Deferred tax credit relating to share options - - - 30 30
Current tax credit relating to exercised share
options - - - 9 9
Dividends paid to Company shareholders - - - (6,413) (6,413)
---------- ---------- ---------- ---------- ----------
Total transactions with owners 2 217 - (6,297) (6,078)
---------- ---------- ---------- ---------- ----------
At 29 November 2015 1,605 10,435 1,042 37,006 50,088
====== ====== ====== ====== ======
Called up Share
share premium Other Retained Total
capital account reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 31 May 2015 and 1 June 2015 1,603 10,218 1,182 38,522 51,525
Profit for the year to 29 May 2016 - - - 13,496 13,496
Exchange differences on translation of
foreign operations - - 485 - 485
---------- ---------- ---------- ---------- ----------
Total comprehensive income for the
period - - 485 13,496 13,981
Transactions with owners:
Share-based payments - - - 193 193
Shares issued under employee sharesave
scheme 3 301 - - 304
Current tax charge relating to exercised
share options - - - (3) (3)
Dividends paid to Company shareholders - - - (12,837) (12,837)
---------- ---------- ---------- ---------- ----------
Total transactions with owners 3 301 - (12,647) (12,343)
---------- ---------- ---------- ---------- ----------
At 29 May 2016 1,606 10,519 1,667 39,371 53,163
====== ====== ====== ====== ======
The following notes form an integral part of this condensed consolidated interim financial information.
CONSOLIDATED CASH FLOW STATEMENT
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Notes GBP000 GBP000 GBP000
Cash flows from operating activities
Cash generated from operations 8 19,621 8,569 26,782
UK corporation tax paid (1,313) (747) (2,236)
Overseas tax paid (155) (121) (316)
---------- ---------- ----------
Net cash from operating activities 18,153 7,701 24,230
---------- ---------- ----------
Cash flows from investing activities
Purchases of property, plant and equipment (2,484) (2,641) (5,296)
Purchases of other intangible assets (1,187) (1,485) (2,789)
Expenditure on product development (3,167) (2,185) (4,578)
Interest received 35 47 86
---------- ---------- ----------
Net cash from investing activities (6,803) (6,264) (12,577)
---------- ---------- ----------
Cash flows from financing activities
Proceeds from issue of ordinary share capital 14 219 304
Interest paid - - (3)
Dividends paid to Company shareholders (8,031) (6,413) (12,837)
---------- ---------- ----------
Net cash from financing activities (8,017) (6,194) (12,536)
---------- ---------- ----------
Net increase/(decrease) in cash and cash equivalents 3,333 (4,757) (883)
Opening cash and cash equivalents 11,775 12,561 12,561
Effects of foreign exchange rates on cash and cash
equivalents 769 (23) 97
---------- ---------- ----------
Closing cash and cash equivalents 15,877 7,781 11,775
====== ====== ======
The following notes form an integral part of this condensed consolidated interim financial information.
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The Company is a limited liability company, incorporated and domiciled in the United Kingdom. The address of its registered office is Willow Road, Lenton, Nottingham, NG7 2WS.
The Company has its listing on the London Stock Exchange.
This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 29 May 2016 were approved by the board of directors on 25 July 2016 and have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under either section 498 (2) or section 498 (3) of the Companies Act 2006.
This condensed consolidated interim financial information has not been audited or reviewed pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information' and does not include all of the information required for full annual financial statements.
This condensed consolidated interim financial information for the six months ended 27 November 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 29 May 2016 which have been prepared in accordance with IFRSs as adopted by the European Union.
After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they have adopted the going concern basis in preparing this condensed consolidated interim financial information.
This condensed consolidated interim financial information was approved for issue on 10 January 2017.
This condensed consolidated interim financial information is available to shareholders and members of the public on the Company's website at investor.games-workshop.com.
The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenues and expenses. Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 29 May 2016.
The accounting policies applied are consistent with those of the annual financial statements for the year ended 29 May 2016, as described in those financial statements. With effect from 30 May 2016 the Group implemented a change in accounting estimate for the amortisation of development costs intangible assets and the accounting estimate for the depreciation of moulding tools. These are described in note 2 below along with the impact on the results for the six months to 27 November 2016.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
There are no new accounting standards or interpretations effective in the current period which are relevant to the Group.
New standards, amendments to standards and interpretations which have been published but are not yet effective which are relevant to the Group are:
IFRS 16 'Leases' (effective for the year ending 31 May 2020). Under this new standard all leases will be required to be recognised on balance sheet. Currently under IAS 17 'Leases' only leases categorised as finance leases are recognised on balance sheet, with leases categorised as operating leases not recognised. In broad terms the impact will be to recognise a lease liability and corresponding asset for the Group's operating lease commitments. The Group is assessing the impact of the new standard.
IFRS 15 'Revenue from contracts with customers' (effective for the year ending 2 June 2019). Under this new standard the royalty minimum guarantee income is expected to be taken as revenue up front. Currently the minimum guarantee income is deferred and released in line with licensee sales.
The Group does not consider that any other standards, amendments or interpretations issued by the IASB, but not yet applicable, will have a significant effect on the financial statements.
2. Change in accounting estimates
With effect from 30 May 2016 the Group implemented a change in accounting estimates for the amortisation of development costs intangible assets and the depreciation of moulding tools. Previously product development costs recognised as intangible assets were amortised on a straight line basis over periods ranging between 1 and 48 months. These development costs intangible assets are now amortised on a reducing balance basis with rates ranging from 50% to 80%.
Previously moulding tools were depreciated on a straight line basis over a period of 48 months. Moulding tools relating to specific products are now amortised on a reducing balance basis at 50%.
The changes have been made in order to better match the expenditure incurred to the expected revenue generated from the subsequent product release. In accordance with IAS 8 'Accounting policies, changes in accounting estimates and errors' the changes are recognised prospectively and hence there is no impact on the results or financial position previously reported for the six months to 29 November 2015 or for the year ended 29 May 2016.
The impact of the change on the results for the six months to 27 November 2016 is shown in the table below:
Impact of Total
Pre-change in change in Six months to
accounting accounting 27 November
estimates estimates 2016
GBP000 GBP000 GBP000
Cost of sales (22,171) 798 (21,373)
Gross profit 48,764 798 49,562
Operating profit 12,960 798 13,758
Income tax expense (2,703) (154) (2,857)
Profit attributable to owners of the parent 10,286 644 10,930
Other intangible assets 11,184 1,640 12,824
Property, plant and equipment 22,487 (375) 22,112
Deferred tax assets 2,976 (95) 2,881
Current tax liabilities (2,630) (59) (2,689)
Net assets 58,243 644 58,887
Basic earnings per share 32.0p 2.0p 34.0p
Diluted earnings per share 31.9p 2.0p 33.9p
The impact of the change in accounting estimates in future periods will depend on the release mix and nature of products being developed in those years. A benefit relating to the changes in accounting estimates is expected until the year ending 31 May 2020, when the change will no longer materially impact the financial statements.
3. Segment information
As Games Workshop is a vertically integrated business, management assesses the performance of sales channels and manufacturing and distribution channels separately. At 27 November 2016, the Group is organised as follows:
- Sales channels. These channels sell product to external customers, through the Group's network of retail stores, independent retailers and directly via the global web store. The sales channels have been aggregated into segments where they sell products of a similar nature, have similar production processes, similar customers, similar distribution methods, and if they are affected by similar economic factors. The segments are as follows:
- Trade. This sales channel sells globally to independent retailers and also includes the Group's magazine newsstand business and the distributor sales from the Group's publishing business (Black Library).
- Retail. This includes sales through the Group's retail stores, the Group's visitor centre in Nottingham and global exhibitions.
- Mail order. This includes sales through the Group's global web stores and digital sales through external affiliates.
- Product and supply. This includes the design and manufacture of the products and incorporates the production facility in the UK and the Group logistics and stock management costs. This also includes adjustments for the profit in stock arising from inter-segment sales and charges for inventory provisions.
- Central costs. These include the Company overheads, head office site costs, and the costs of running the Games Workshop Academy.
- Service centre costs. Provides support services (IT, accounting, payroll, personnel, procurement, legal, customer services and credit control) to activities across the Group and undertakes strategic projects.
- Royalties. This is royalty income earned from third party licensees after deducting associated licensing costs.
The chief operating decision-maker assesses the performance of each segment based on operating profit, excluding share option charges recognised under IFRS 2, 'Share-based payment' and charges in respect of the Group's profit share scheme. This has been reconciled to the Group's total profit before taxation below.
The segment information reported to the executive directors for the periods included in this financial information is as follows:
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
External revenue
Trade 29,341 22,418 44,522
Retail 29,168 21,457 48,414
Mail order 12,426 11,384 25,133
------------- ------------- ------------
Total external revenue 70,935 55,259 118,069
======== ======== =======
For information, we analyse external revenue further below:
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Trade
UK and Continental Europe 10,416 8,424 15,504
North America 11,131 8,716 17,944
Australia and New Zealand 1,133 871 1,658
Asia 746 323 741
Non-core trade 5,915 4,084 8,675
------------- ------------- -------------
Total Trade 29,341 22,418 44,522
------------- ------------- -------------
Retail
UK 8,627 7,776 16,074
Continental Europe 7,869 5,116 12,878
North America 7,044 4,438 10,417
Australia and New Zealand 3,338 2,350 5,133
Asia 538 165 417
Non-core retail 1,752 1,612 3,495
------------- ------------- -------------
Total Retail 29,168 21,457 48,414
------------- ------------- -------------
Mail order
Citadel and Forge World 10,283 9,508 21,018
Non-core mail order 2,143 1,876 4,115
------------- ------------- -------------
Total Mail order 12,426 11,384 25,133
------------- ------------- -------------
Total external revenue 70,935 55,259 118,069
======== ======== ========
Operating expenses by segment are regularly reviewed by the executive directors and are provided below:
Six months Six months Year to
to to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Trade (5,388) (4,086) (8,899)
Retail (21,222) (17,055) (35,930)
Mail order (2,595) (2,207) (5,002)
Product and supply (1,279) (1,583) (2,767)
Central costs (3,125) (2,697) (5,582)
Service centre costs (4,738) (5,822) (10,907)
Royalties (192) (226) (430)
------------- ------------- -------------
Total segment operating
expenses (38,539) (33,676) (69,517)
Share-based payment charge (82) (77) (193)
Profit share scheme charge (444) - -
------------- ------------- ------------
Total group operating expenses (39,065) (33,753) (69,710)
======== ======== ========
Total segment operating profit is as follows and is reconciled to profit before taxation below:
Restated** Restated**
Six months to Six months to Year to
27 November 29 November 29 May
2016* 2015 2016
GBP000 GBP000 GBP000
Trade 8,791 5,789 10,625
Retail (2,369) (3,052) (3,927)
Mail order 6,651 6,231 13,747
Product and supply 6,075 4,646 7,610
Central costs (3,125) (2,697) (5,424)
Service centre costs (4,738) (5,822) (10,907)
Royalties 2,999 1,222 5,329
------------- ------------- ----------
Total segment operating profit 14,284 6,317 17,053
Share-based payment charge (82) (77) (193)
Profit share scheme charge (444) - -
Finance income 29 47 93
Finance costs - - (5)
------------- ------------- -------------
Profit before taxation 13,787 6,287 16,948
======== ======== ========
*The implementation of the change in accounting estimates for the amortisation of development costs intangible assets and the depreciation of moulding tools, as described in note 2, has resulted in an increase in operating profit of GBP798,000 which is shown within the product and supply segment above. There is no impact on the results for the six months to 29 November 2015 or the year to 29 May 2016.
**Segment operating profit for the six months to 29 November 2015 and for the year to 29 May 2016 has been restated in this financial information to reclassify a stock valuation gain of GBP517,000 from the retail segment to the product and supply segment. This reflects the current management structure in place for the six months to 27 November 2016.
4. Dividends
A dividend of GBP8,031,000 (25 pence per share) was declared and paid in the six months to 27 November 2016.
A dividend of GBP6,413,000 (20 pence per share) was declared and paid in the six months to 29 November 2015.
Dividends of GBP12,837,000 were declared and paid during the year ended 29 May 2016.
5. Profit before taxation
The following costs have been incurred in the reported periods in respect of ongoing redundancies, inventory provisions, impairments and loss-making retail stores:
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Redundancy costs and compensation for loss of office 345 275 536
Impairment of property, plant and equipment 16 46 28
Net charge to property provisions including closed or loss-making
retail stores 197 377 562
Net inventory provision creation 235 286 1,805
6. Tax
The taxation charge for the six months to 27 November 2016 is based on an estimate of the full year effective rate of 20.7% reflecting overseas tax rates which are higher than the UK rate of 19.83% (2015: 24.0%, reflecting overseas tax rates which were higher than the UK rate of 20.0%).
7. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue throughout the relevant period.
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Profit attributable to owners of the parent (GBP000) 10,930 4,781 13,496
------------- ------------- -------------
Weighted average number of ordinary shares in issue (thousands) 32,121 32,070 32,093
------------- ------------- -------------
Basic earnings per share (pence per share) 34.0 14.9 42.1
======== ======== ========
Basic earnings per share pre-change in accounting estimates
Basic earnings per share pre-change in accounting estimates is calculated by dividing the profit attributable to owners of the parent, before the impact of the change in accounting estimates, by the weighted average number of ordinary shares in issue throughout the relevant period.
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Profit attributable to owners of the parent pre-change in
accounting estimates (GBP000) 10,286 4,781 13,496
------------- ------------- -------------
Weighted average number of ordinary shares in issue (thousands) 32,121 32,070 32,093
------------- ------------- -------------
Basic earnings per share pre-change in accounting estimates
(pence per share) 32.0 14.9 42.1
======== ======== ========
Diluted earnings per share
The calculation of diluted earnings per share has been based on the profit attributable to owners of the parent and the weighted average number of shares in issue throughout the relevant period, adjusted for the dilution effect of share options outstanding at the period end.
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Profit attributable to owners of the parent (GBP000) 10,930 4,781 13,496
------------- ------------- -------------
Weighted average number of ordinary shares in issue
(thousands) 32,121 32,070 32,093
Adjustment for share options (thousands) 77 74 57
------------- ------------- -------------
Weighted average number of ordinary shares for diluted
earnings per share (thousands) 32,198 32,144 32,150
------------- ------------- -------------
Diluted earnings per share (pence per share) 33.9 14.9 42.0
======== ======== ========
Diluted earnings per share pre-change in accounting estimates
The calculation of diluted earnings per share has been based on the profit attributable to owners of the parent, before the impact of the change in accounting estimates, and the weighted average number of shares in issue throughout the relevant period, adjusted for the dilution effect of share options outstanding at the period end.
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
Profit attributable to owners of the parent pre-change in
accounting estimates (GBP000) 10,286 4,781 13,496
------------- ------------- -------------
Weighted average number of ordinary shares in issue
(thousands) 32,121 32,070 32,093
Adjustment for share options (thousands) 77 74 57
------------- ------------- -------------
Weighted average number of ordinary shares for diluted
earnings per share (thousands) 32,198 32,144 32,150
------------- ------------- -------------
Diluted earnings per share pre-change in accounting estimates
(pence per share) 31.9 14.9 42.0
======== ======== ========
8. Reconciliation of profit to net cash from operating activities
Six months to Six months to Year to
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Operating profit 13,758 6,240 16,860
Depreciation of property, plant and equipment 3,156 2,611 5,305
Net impairment charge on property, plant and equipment 16 46 28
Loss on disposal of property, plant and equipment 23 8 28
Loss on disposal of intangible assets - - 39
Amortisation of capitalised development costs 1,557 1,831 3,853
Amortisation of other intangibles 604 595 1,232
Share-based payments 82 77 193
Changes in working capital:
-Increase in inventories (1,805) (1,697) (701)
-Increase in trade and other receivables (1,298) (1,004) (293)
-Increase/(decrease) in trade and other payables 3,585 (413) (198)
-(Decrease)/increase in provisions (57) 275 436
---------- ---------- ---------
Net cash from operating activities 19,621 8,569 26,782
====== ====== ======
9. Other intangible assets
27 November 29 November 29 May
2016* 2015 2016
GBP000 GBP000 GBP000
Net book value at beginning of period 10,501 8,262 8,262
Additions 4,479 3,566 7,362
Exchange differences 5 7 1
Disposals - - (39)
Amortisation charge (2,161) (2,426) (5,085)
---------- ---------- ----------
Net book value at end of period 12,824 9,409 10,501
====== ====== ======
*The impact of the change in accounting estimate for the amortisation of development costs intangible assets is an increase in the net book value of intangible assets of GBP1,640,000 as at 27 November 2016. There is no impact on the net book value of intangible assets at 29 November 2015 or 29 May 2016.
10. Property, plant and equipment
27 November 29 November 29 May
2016* 2015 2016
GBP000 GBP000 GBP000
Net book value at beginning of period 22,621 22,719 22,719
Additions 2,348 2,551 5,193
Exchange differences 338 (17) 70
Disposals (23) (8) (28)
Charge for the period (3,156) (2,611) (5,305)
Impairment (16) (46) (28)
---------- ---------- ----------
Net book value at end of period 22,112 22,588 22,621
====== ====== ======
*The impact of the change in accounting estimate for the depreciation of moulding tools is a decrease in the net book value of property, plant and equipment of GBP375,000 as at 27 November 2016. There is no impact on the net book value of property, plant and equipment at 29 November 2015 or 29 May 2016.
11. Provisions
Analysis of total provisions:
27 November 29 November 29 May
2016 2015 2016
GBP000 GBP000 GBP000
Current 838 674 823
Non-current 662 577 621
---------- ---------- ----------
1,500 1,251 1,444
====== ====== ======
Exceptional Employee
items benefits Property Total
GBP000 GBP000 GBP000 GBP000
At 31 May 2015 26 492 469 987
Charged to the income
statement - 65 377 442
Exchange differences - (7) (3) (10)
Utilised (26) (1) (141) (168)
---------- ---------- ---------- ----------
At 29 November 2015 - 549 702 1,251
====== ====== ====== ======
Exceptional Employee
items benefits Property Total
GBP000 GBP000 GBP000 GBP000
At 31 May 2015 26 492 469 987
Charged to the income
statement - 89 562 651
Exchange differences - 3 16 19
Utilised (26) (37) (150) (213)
--------- -------- -------- ----------
At 29 May 2016 - 547 897 1,444
Charged to the income
statement - 99 197 296
Exchange differences - 53 60 113
Utilised - (47) (306) (353)
---------- ---------- ---------- ----------
At 27 November 2016 - 652 848 1,500
====== ====== ====== ======
12. Seasonality
The Group's monthly sales profile demonstrates an element of seasonality around the Christmas period which impacts sales in the month of December.
13. Commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is GBP996,000 (2015: GBP867,000). The committed spend includes the replacement of the local area network for our headquarters in Nottingham and tooling and machinery spend.
14. Related-party transactions
There were no material related-party transactions during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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January 10, 2017 02:00 ET (07:00 GMT)
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