Games Workshop Share Discussion Threads

[woozle1] 08/11/2019 11:33

Busiest trading period still to come.
w1

[glaws2] 08/11/2019 11:18

Thanks Robin

[robinnicolson] 08/11/2019 11:15

Warhammer Christmas jumpers:

[robinnicolson] 08/11/2019 10:58

Edison note:

[cockerhoop] 08/11/2019 10:56

Cheers Robin, I didn't realise Liberum covered #GAW

[robinnicolson] 08/11/2019 10:43

Comments from brokers:

Broker Peel Hunt said the retailer was "storming" the first half of the year.

"We expect sales to have grown in all three channels - trade, retail and online - in the first half, with trade likely to be the strongest given the expected continued increase in new trade accounts," the broker added.

"The company has also had a very strong performance in royalty income, both in terms of guarantees from signing new agreements and contribution from existing games."

It upped its target price from 4,750p to 5,000p and hiked its forecast by around nine per cent.

AJ Bell investment director Russ Mould added that Games Workshop's niche focus on gaming miniatures has helped it survive the high street turmoil hitting retailers.

"Its customers are fanatical, loyal and part of a vibrant community whose hobby is centred on miniature figures," he said.

"Games Workshop is currently enjoying a sweet spot whereby it is offering products which appeal to its end-market and in an engaging way. The community spirit of its offering, particularly the way staff interacts with customers in-store, gives it an edge over mainstream retailers."

He added that future earnings potential could be greater than people may think, with it expanding into the US and Germany, while US and Europe stores outstrip the number of UK outlets it has.

[cockerhoop] 08/11/2019 10:12

Last year approx £200k of licence income was recorded in both FY2018 & H119. ie doubled counted.

[cockerhoop] 08/11/2019 10:07

Morning guys,

IFRS 15 was reflected in 2019 results so licensing income in H1 last year would have been accounted for on the same basis.
Very encouraging on licence deal flow especially if minimum income is exceeded in future periods.
I can't see how licencing income hasn't doubled in H1 (unless the margins on paint have skewed the rest of the business margin.)

[shanklin] 08/11/2019 09:29

Hi Xajorkith

I agree with you albeit, all future agreed royalties at the time were I think reflected in the 2019 FY results, so some royalties would have been pulled into the last FY which would previously been reported in future periods.

I guess the bottom line is that GAW are getting much better at exploiting their IP.

[xajorkith] 08/11/2019 09:09

Hi Shanklin.

Totally agree it’s reasonable to book guaranteed royalties; just suggesting it may flatter the H1 numbers.

Regardless, trading remains strong and FY eps likely to be well ahead of current forecasts, so all good :-)

[sspurt] 08/11/2019 09:02

An interesting stat from PH this am re royalties. Warhammer-community.com saw page views rise by over 60% last year from 6m visitors.

[shanklin] 08/11/2019 08:38

Hi Xajorkith

The new accounting treatment for royalties seems very reasonable to me.

If a minimum level of royalties are guaranteed by an agreement signed in the current period, the related profit should be booked in said period, even if some/all of the associated cash is due to be paid in later periods. Presumably the guaranteed but yet-to-be-received royalties will be shown on the B/S under "Trade and other receivables" in the "Non-current assets" as happened in the FY results

[xajorkith] 08/11/2019 08:23

Unexpectedly positive, pre-Christmas update :-)

H1 PBT 40% up on last year, although clouded somewhat by the timing of royalties (profit brought forward?).

On the face of it, they appear to be on course to smash FY broker forecasts.

[nimbo1] 08/11/2019 08:03

Gaw is a cash machine 😀

[nod] 08/11/2019 07:55

For immediate release 8 November 2019Following on from the Group's update in September, trading to 3 November 2019 has continued well. Compared to the same period in the prior year, sales and profits are ahead. Royalties receivable are also significantly ahead of the prior year driven by the timing of guarantee income on signing new licences.Our preliminary estimates of the results for the six months to 1 December 2019 are sales of not less than GBP140 million and profit before tax of not less than GBP55 million.

[shanklin] 08/11/2019 07:43

So that means circa £77m PAT for the 12 months ending 01-Dec-19. That will being the historical P/E down to less than 19 at the current share price of £45.12.

[nod] 07/11/2019 04:10

The Companies Act 2006 414C(2)(b) requires that the strategic report contains a description of the principal risks and uncertainties facing the company.

The descriptions of the principal risks and uncertainties facing the entity should be specific so that a shareholder can understand why they are material to the entity.

Source: FRC

[nod] 05/11/2019 23:05

IMHO Companies should not be speculating on what may or may not occur, especially if they are not acting on their speculation. If they have strong views, it is up to them to take management action as required, e.g. currency hedging (which GAW doesn't do) or increasing stock levels for Brexit or whatever. It's fine to state facts e.g. actions being taken.I would not use any vague or superfluous words like "uncertainties". Every business has uncertainties ahead. They don't say it because it's obvious.

[cockerhoop] 05/11/2019 21:36

GAW alluded to 'uncertainties' in trading statements issued in Jan 17, Mar 17, July 17 and Oct 18 and challenges in Dec 16.How do you know that they didn't relate to potential currency headwinds amongst other possible issues?It's worth noting that Edison's forecasts pretty much mirror PH's so not much original thought going on imo.Anyway at the end of the day it's the certainty of results that count.

[nod] 05/11/2019 19:17

Peel Hunt's forecast 18 months ago was an example of speculation. PH predicted "currency headwinds" would negatively impact profits. This was speculating that GBP would rise. We discussed it at length on this board.
I doubt that this was GAW's speculation and if it was, they got it wrong. GAW shouldn't speculate in its statements but brokers get paid to speculate.
Brokers use their macro and micro economic wisdom to forecast.

[cockerhoop] 05/11/2019 18:35

Going to be a very busy last 3 days of H1 for GAW with the Black Friday Sisters of Battle release on the 29th Nov.

[cockerhoop] 05/11/2019 17:10

I'm not convinced the broker speculates - just reports the companies conservative guidance.

[nod] 04/11/2019 20:54

There were trading "uncertainties" last year and with both Brexit AND an election in progress there will be more uncertainties than normal this December. Stating the obvious would be manipulated by Market bears, as it was last year. It's best for GAW to stick with facts (sales) and not speculate on how consumers may or may not feel. Leave it to the brokers to speculate.

[cockerhoop] 04/11/2019 07:51

I'd expect a H1 TS and dividend announcement on 5th/6th December.