Games Workshop Share Discussion Threads

[nod] 15/1/2019 10:11

Martin, the ERP application is for Europe only, which is prudent. In the last AR they forecast a total ERP cost of 8 million. It keeps going up which is the nature of ERP implementations. They are complex and painful. Anyone in corporate IT or Finance can count on one finger the number of successful ERP projects they have seen. The cost is not huge for GAW and with the other infrastructure investments in place will give us the capability to expand more rapidly over the next few years. GAW spent around 3 million on the Forge World online site in 2015/16. There was a comment about stock levels not being where we would like them to be. I take that to mean stock shortages, which would suggest demand has been outstripping supply. Once the new factory capacity is up to speed then this should be fixed.

[cockerhoop] 15/1/2019 10:04

Each to their own :-)

[typo56] 15/1/2019 09:51

Thanks. I'm told Peel Hunt tend to be conservative on GAW forecasts, even though they're the house brokers I believe.

Still goes in my "why bother?" drawer though. On this rating there's too much downside if they should warn IMO.

[cockerhoop] 15/1/2019 09:28

Typo56,

There's only Peel Hunt producing forecasts and analyst Charles Hall has been way behind the curve over the last 2 years.

[nod] 15/1/2019 09:25

The encouraging details are:- Retail sales grew around 7.5% and profit up 65%. This suggests the changes to our own stores are now paying off. - Trade sales up 28% and profit up nearly 32%. Trade is the largest segment and now represents over 50% of total revenue.- Online sales and profits down. I suspect this is due to the competition from the discounts online that we have discussed. GAW may need to address this.- Royalties healthy up 56%. These are lumpy so hard to know what H2 will bring.- Overall: Sales up 14% and Profit up 7%. - Dividend up 6.5% (65 v 61)- December continued at same rate- Can't complain.

[cockerhoop] 15/1/2019 09:25

I can add some detail regards online sales. Independents have started to produce decent online offerings with good customer service, stock levels & range. In the UK they offer a 15%-20% discount compared to the GAW website which never discounts.

Online Op Margin is nearly 60%, Trade 36.6% so has an effect.

[typo56] 15/1/2019 09:19

I seem to have a mix of broker forecasts for 2019 to 2021 but wherever I look growth estimates seem to be quite modest. e.g. Sharescope have:

2019
Pre tax £68m (-8.78%)
EPS 169p (-7.57%)

2020
Pre tax £71m (+4.41%)
EPS 176p (+4.45%)

2021
Pre tax £74m (+4.23%)
EPS 183p (+4.15%)

It does seem a solid company but with a market cap of over £1bn it's not on a valuation I'd fancy chasing, not with the hint about margins and stock levels.

[shanklin] 15/1/2019 09:01

For me the two areas where I would like more clarity relate to:

- Implementation of the ERP system. When will this be complete?

- Online sales. Obviously an increase independent retailers' online sales is having a negative impact on GAW's online sales. Are said retailers undercutting GAW's prices? How big an overall negative impact does this have on GAW's margins? Obviously this is predominantly an effect of GAW using third parties to quickly increase their geographical coverage and overall sales.

[cockerhoop] 15/1/2019 08:49

I'd say the opposite Typo56 Future sounds more positive - once the major expansion project complete gross margin and stock levels will improve from current levels.

It's very naive to expect to be able to double production capability and migrate to a new ERP system without any disruption. The 'keeping the lights on' comment suggest the upheaval is significant. To increase revenue and maintain the relentless release program is an amazing achievement.

Many companies are also increasing inventory levels to mitigate against Brexit causing supply disruption.

[shanklin] 15/1/2019 08:43

Hi Typo

Hope all is well with you?

It would certainly be good to get the ERP system and factory expansion fully implemented. Given they are clearly incurring some transitional growth pains, it is comforting to note record H1 revenue and profits, satisfactory December trading and lots of opportunity to improve operational efficiency.

They are also obviously comfortable with their cash position as otherwise they would not have announced a new dividend just over a month after the previous one was announced.

Cheers, Martin

[typo56] 15/1/2019 08:33

Past sounds positive.

Future? "As we move to complete a series of major investment projects, our gross margin and stock levels are not currently where we'd like them to be."

[nod] 14/1/2019 23:29

Teenagers can dream of having a work desk like the one in the article,

[robinnicolson] 14/1/2019 18:24

Article on the design of the Warhammer models:

hxxps://www.creativebloq.com/features/inside-games-workshop

[hawaly] 11/1/2019 12:21

Thanks Nod

The rest of the article is of some interest too....

[nod] 11/1/2019 11:04

Good news Fred.Hope you enjoyed the Malbec.

[flatoutfred] 09/1/2019 17:26

LATE Happy New Year everyone. Best thread on the tinternet this even though I am not much of a contributor and I've not been here.

Oh and NOD, was at specialist today after bloods taken just before Xmas and the results are - Not Detectable !!! but early days yet, know for sure in 3 months.

Either way, that Malbec I got from my daughter at Xmas (for when I got good news) is getting opened tonight.

Slainte

[nod] 07/1/2019 19:55

Thanks Shanks. I'll get back to the beach then.With prophets and seers on our books our forward-looking statements could be less cautious. "Eldrad sees a clear road ahead over the next six months".

[cockerhoop] 07/1/2019 13:42

The last couple of years there has been very little regards current trading contained within the Interims. From memory nothing at all in 2017 followed by a TS a week later and a single line in 2018. So don't expect too much although with the 53 week year in 2018 results are a little later so we may get a flavour of Christmas trading.

[woozle1] 07/1/2019 12:35

Without words of caution, it would not be GAW! They merely state the obvious and that is the future is hard to predict and this tends to disappoint an investment community that craves certainty.

[shanklin] 07/1/2019 10:49

Nod, 15th January per the TS

[nod] 07/1/2019 10:20

We should get the Interims this week. Hopefully, without words of caution regarding the road ahead.

[woozle1] 05/1/2019 23:12

I told you to wear a hat!

[nod] 05/1/2019 21:59

In the 2017/18 year, sales went up gbp 64 million.A big global hit next year could see the share pass 4,000 again.The US offers huge growth potential.Or have I had too much sun this week?

[cockerhoop] 04/1/2019 12:13

Happy New Year Nod et al

Hypothetically...........

Revenue of £350m would conservatively equate to £110m op profit excluding royalties.

Adding in £10m of royalties that's £3 in EPS.

Not sure we'll get those type of forecasts from Peel Hunt though.