Games Workshop Share Discussion Threads

[cockerhoop] 21/12/2017 19:57

I think the 1st Dec TS is plenty detailed enough giving rev, op profit (hence EPS) and details that momentum continuing with constant currency sales and profit growth in all channels.

I'm with WilmDav in that the better you know the company and it's nuances the more you can derive from the statements that don't contain much detail as in the 19th Oct RNS.

[trident5] 21/12/2017 19:45

? Well, try and find a detailed one.

[cockerhoop] 21/12/2017 19:24

Each to their own trident5 :-)

[trident5] 21/12/2017 19:08

TSs here are always short and bereft of detail; I dont think it's illuminating to read much into individual statements on this basis.

[cockerhoop] 21/12/2017 19:04

Wilmdav,

Regards the TS of the 19th Oct, I agree it was lacking detail - only suggesting a continuation of strong trading mentioned in the TS of 5th Sept. It was only later on in the morning when the house broker forecasts were increased from £1.37 to £1.61 that the share price kicked on.

I think the opposite may have occurred on 1st December, opened quite firmly (I thought £25 was nailed on that day) with the specific nature of the update then fell back a little when forecasts weren't upgraded followed by a period of weakness before recovering eventually last week to my expected £25.

If only you'd known about GAW in 2006 you could have bought a LOTR set :-)

I may pop into my local store tomorrow to check how the run up to Christmas has shaped up.

[cockerhoop] 21/12/2017 09:15

Considering the vast IP resource the company owns I think £13m of intangibles on the balance is pretty modest especially considering the royalty income generated from it.

I'm not sure price to sales is a particularly helpful metric in a company with such operational gearing as relatively small increases in sales lead to large gains in profitability. Obviously the operational gearing is though a 2 way street.

I agree the concept of GAW doing well is counter intuitive in an age where there's been a massive move to digital. My experience (though no expert) when in shops is that the Warhammer worlds are akin to those of Stars Wars in that players are immersed in the history of the environment and constantly awaiting new developments and plots. I've heard fascinating conversations instore between players and the manager (or WH histrorian!!)

Very different to the likes of Hornby or Scalextric which lack the depth of IP to compete against digital gaming.

[wilmdav] 20/12/2017 23:44

Unusual business model. Some might take issue with the amount of capitalised product development but any such argument would seem to be nullified by the consistent excess of operating cash flow in relation to operating profit.
The current price/sales ratio of 5.1 against an average of about 1.5 over the previous 5 years caused me to hesitate but I have taken a small position.
The fantasy toy soldiers didn't do a lot for me but I know nothing about the games which are presumably captivating. Probably not a share to hold forever though, especially if you are not very young.

[wilmdav] 19/12/2017 22:54

GAW has only just been picked up by my radar - one of the penalties of focussing too much on smaller market caps.

Sharepad shows only one broker with eps forecasts of 161p, 136.3p and 143.7p for 2018, 2019 and 2020 respectively.

Would anyone be willing to explain why forecasts for 2019 and 2020 are significantly lower than 2018?

[cockerhoop] 19/12/2017 22:07

Nod,

Fair points, I think for example the extended Youtube content enthuses players generally so drives sales across all channels. It will be interesting to see if this years numbers change at all as the Warhammer Community was only established in November 16.

[nod] 19/12/2017 18:41

All channels grew year on year at exactly the same rates. So, the online channel was no more and no less successful at selling than the other channels.

From the 2017 AR:
"Sales by channel
41% (2016: 41%) of sales were made through our own stores,
38% (2016: 38%) of sales were to independent retailers and
21% (2016: 21%) were mail order. "

I would imagine footfall grew similarly across all channels. It's just much easier to generate impressive-looking stats from online tracking.

[cockerhoop] 19/12/2017 12:46

Nod,

I think it's undeniable that the amount of GAW online content has increased dramatically over the last year or so.

Management state that internal metrics of online usage suggest that this content is successful at driving sales. I'm inclined to believe them.

[cockerhoop] 19/12/2017 12:41

David,

As you'll be aware all the retail staff are collectors/players.

I'm amazed by the work a manager has to do in the single store operations. I'd assumed that all the model displays instore were painted centrally and shipped but no it's the managers job along with sales, ordering, supervising the gaming and painting tables, being an oracle on the various warhammer back stories, being a guide to the flock of young players that follow him around.

Very impressed with my local managers ability for add on sales to complement purchases, calenders, card packs etc without appearing pushy. It's in his interest as he gets a 20% cut of sales above target but impressive nevertheless.

[davidosh] 19/12/2017 12:00

As part of my regular DD i went to a store on Monday and chatted to the manager who told me he personally spends £7000 a year on his hobby and loves painting up the models. I hope he gets decent staff discount but that does seem an amazing amount compared to electronic hobbies etc. I wonder what the average spend per customer annually is likely to be ?

He said they run leagues within schools in the area so certainly targeting the younger potential game players early.

[cockerhoop] 19/12/2017 10:35

Lauders,

There often seems to be a dip (or at least a mystifying lack of rise) after exceptional TS's and results.

Oct 16 & Dec 16 TS's provided exceptional buying opportunities to anyone who noticed and understood the operational gearing.

The initial reaction to the during market hours 2nd June 17 TS was down rather than up.

Last TS, share price dipped to £19 in the following days when it was clear £25 was deserved.

I've probably missed a few others too.

[lauders] 19/12/2017 10:17

chrisatom - Thank you for the kind reply. Nice to see a BB that is responsive to requests for information. Hope to join you all with a holding in due course although I also hope at a lower price than now. Will see what happens. Cheers.

[cockerhoop] 19/12/2017 10:12

Nod,

I think the current management have introduced a more coherent marketing policy. Clearly it's not a panacea in itself - the product itself has to be exciting which they also seem to be achieving with the very successful relaunch of 40k in contrast to the (widely considered) botched launch of AoS in 2015.

From the AR

Merchandising and marketing

We are increasingly focussed on engaging with our customers. During the year we invested further in some key tools to allow us to communicate with more of them more often.
Launched in November 2016 , warhammer-community.com serves as a hub for a wealth of Warhammer content and the gateway to the depth of our IP. The tone is fun, honest, engaging and informative. We've also updated our home pages at games-workshop.com with more content to help guide new and existing customers through our product ranges, characters and worlds.
We’ve added more videos to Warhammer TV to really showcase the passion and enthusiasm our staff have for their work and our products. The team has also done a
great job creating a personal connection with our customers at third party and live streaming online events.
In response, our customers have been fantastic. This year has seen them loyally support us and help grow the Warhammer hobby around the world.

[chrisatom] 19/12/2017 08:44

Lauders- from a purely technical side, GAW made a bull flag on the chart from late Oct until last week. The break of the upper line is very bullish and although it may retest, it may not. Measured move puts the target at around £30.

[lauders] 19/12/2017 02:11

Wanted to buy at the recent dip but had no funds and now that I do I am hoping for a bit of a pullback personally. Not sure whether one will come but I can't see this recent spike continuing withut a bit of a retreat. Famous last words. Do any of the regulars like Nod have a long term (2+ years) target if at all possible given the multiple variables that may affect the price. I have been watching here so long and never done anything about it. Silly boy!