Games Workshop Share Discussion Threads

[melton john] 26/5/2020 08:35

Good memories of Standard Life. Donkeys years ago my insurance broker advised changing my mortgage to a low-cost endowment life insurance policy. The mortgage was £10k, tells you how long ago. Paid the mortgage off with £10k to spare 20 years ago. I should buy some.

[nod] 25/5/2020 23:40

It's very bullish of Standard Life to add 1.6% of GAW to its holding of over 5% -- Adding during a pandemic and widely predicted global recession (or depression according to some economists).Standard Life holding now is 6.69%

[cockerhoop] 23/5/2020 11:44

So they're pushing on with 9th Edition 40k release!

Leaked FAQ, announced officially at 2pm today.

[shanklin] 22/5/2020 11:52

Well that's great news. I presume this will be RNS'd in due course.

Shame I sold 2/3 of my very overweight holding between £48 and £50 just before the recent increases, but its still circa 11% of my holdings.

[cockerhoop] 22/5/2020 11:39

Factory up and running, new releases available to pre-order 30th May for collection 6th June.

[christh] 18/5/2020 11:24

Dow futures jump nearly 300 points, rebounding from last week’s losses

Published Sun, May 17 20206:08 PM EDT

Updated 21 min ago

Thomas Franck
@tomwfranck

Futures contracts tied to the major U.S. stock indexes rose early Monday as investors weighed comments by Federal Reserve Chairman Jerome Powell on the state of the economy against signs of optimism as states began to reopen for business over the weekend.

Dow Jones Industrial Average futures implied an opening gain of more than 270 points. S&P 500 and Nasdaq futures also pointed to gains at the open.

[christh] 15/5/2020 11:39

Stock futures point to positive open after Thursday’s strong gains on Wall Street

Published Thu, May 14 20206:01 PM EDT

Updated 17 min ago

Fred Imbert
@foimbert

[christh] 14/5/2020 10:14

what caused the 5% drop this morning?

Great time to Buy, great opportunity!

On Monday looking at £62-£63

[suetballs] 13/5/2020 15:58

Added this pm - encouraging Questor article.
Suet

[shanklin] 13/5/2020 14:50

Great article until the mention of Tom Kirby's stake.

[robow] 13/5/2020 14:45

Here is the full piece. It is very positive indeed.


Questor: this games retailer’s huge returns are no fantasy. Buy for the long term
Questor share tip: Games Workshop makes a return on capital of 100pc a year, the highest figure that this column has come across



Attempts to make more from Games Workshop's intellectual property should bear fruit
“Good things tend to happen to good companies. Bad things tend to happen to bad companies.”

This is how one fund manager explained his preference for “quality”; stocks as opposed to the cheap ones that appeal to “value” investors.

One company to which good things seem to be happening is Games Workshop, which sells figurines based on characters from fantasy stories such as Lord of the Rings.

Earlier this month investors heard details of a new partnership with Frontier Developments, another “quality”; company, whose shares have gained 47pc since we tipped them in March. Frontier will develop a video game based on Games Workshop’s Warhammer Age of Sigmar franchise.

Benji Dawes, whose Premier UK Growth fund owns a stake in Games Workshop, said the agreement with Frontier could give a “very material” boost to the former’s profits.

“While Games Workshop is known as a retailer, it has a lot of intellectual property that it could make more of. This deal is a step in the right direction,” he said. “Recent video games from the Warhammer series have sold up to six million units so there is reason to think the Frontier game could achieve at least three million.

"They may sell for around £40 each and if Games Workshop’s royalty rate is in double figures you are talking about its share being at least £12m and potentially much more. That money is effectively pure profit. In the context of current earnings of £87m before interest and tax, that is a lot.”

Many other opportunities exist to turn the firm’s intellectual property into an income stream, although Mr Dawes said it was keen not to alienate its fan base by striking the wrong deals and tended to move slowly. However, since it increased its dialogue with customers over social media a couple of years ago, the fund manager said it had a much better idea of what they wanted from future projects.

One promising possibility is the firm’s agreement with Marvel, which could result in a comic book series based on the Warhammer franchise. Details could come later this year, Mr Dawes said.

He added: “Lots of media companies want to form partnerships with Games Workshop and we think it has reached an inflection point as far as the exploitation of its intellectual property is concerned.” However, sales of physical products such as figurines and board games still account for 90pc of sales, although here too there are opportunities for growth.

About half of this business is already carried out online or via third parties and these relatively low-risk approaches can be used to sell more in markets such as China and Korea, where games are popular but penetration is low. The firm already has a significant presence in America and is growing in Germany.


Overall, sales grew by 44pc, 40pc and 16pc in 2017, 2018 and last year respectively. Profit growth was even stronger. On one measure margins are 33pc and, as we point out ad nauseam, high margins tend to mean high returns on capital and good cash generation, two key advantages that enable a company to grow without the need to borrow and compound returns over the long term.

But in Games Workshop’s case the returns are truly extraordinary: the return on invested capital last year was 100pc, the highest figure that to Questor’s knowledge any of its stocks has achieved. Cash conversion was 88pc last year.

The company also has net cash of £29.2m on its balance sheet. “When you make such high returns there’s no need to try to amplify them by using borrowed money,” Mr Dawes said.

He also likes companies in which managers have significant stakes and Tom Kirby, the former chairman who was instrumental in the firm’s growth, has 4.8pc of the shares.

We might expect Games Workshop’s huge returns to attract a stratospheric valuation but the multiple of 30 times this year’s expected earnings is attractive for a fast-growing company.


Games Workshop is one to buy and hold for the long term – certainly for long enough to see the fruits of the collaboration with Frontier, which is expected to release its Warhammer Age of Sigmar game in late 2022 or shortly afterwards.

Questor says: buy

Ticker: GAW

Share price at close: £60

[suetballs] 13/5/2020 09:45

Rob that's good news - onwards and upwards.
Suet

[robinnicolson] 13/5/2020 09:16

There is a buy recommendation by 'Questor' in today's Daily Telegraph. The article quotes the fund manager of Premier UK Growth fund, who own a stake in Games Workshop. He believes the recent Frontier agreement could give a 'very material' boost to GW's profits.

"...recent video games from the Warhammer series have sold up to six million units so there is reason to think the Frontier game could achieve at least three million. They may sell for around £40 each and if GW's royalty rate is in double figures you are talking about its share being at least £12m and potentially much more. That money is effectively pure profit. In the context of current earnings of £87m before interest and tax, that is a lot."

[drcheinstein] 11/5/2020 22:49

Another example of licensing GAW IP - cropped up recently. One of GAW most successful board games was Talisman. They have licensed (like there 40k Risk game) Talisman to USAOPoly . So far Kingdom hearts and Batman games - but Star Wars is the latest version of Talisman to be licensed. I think we can see the future potential with these type of crossovers and GAW exposure to Disney etc...hxxps://theop.games/2020/05/talisman-star-wars-coming-soon/

[robinnicolson] 11/5/2020 20:17

Bloomberg:

"Hasbro, the maker of Play-Doh, Scrabble, Monopoly and Dungeons & Dragons, appreciated 72% over the six weeks starting March 15. It hasn't seen a markup like that since its IPO in 1968 and its 2020 revenue is expected to grow the most since 1999."

[robinnicolson] 10/5/2020 12:15

Sorry, the ticker is LSE: TUNE

[nod] 10/5/2020 11:59

Thanks Robin. I'll take a look.

[robinnicolson] 09/5/2020 13:50

Nod,

I don't hold the stock but I remember KAL waxing lyrical in a recent interview about the music and audio products company Focusrite (LSE: FOCUS). It 'ticked all the boxes' for him financially and he said that the enthusiasm of the employees at the company reminded him of those who work at Games Workshop. Ain't cheap though.

My two most recent buys have been Coloplast and Avon Rubber...both with wide moats but again not cheap...but quality companies rarely are!

[nod] 09/5/2020 12:39

To exercise your minds a little during these weeks of lock-down, here is a little US-analysis of Keith Ashworth-Lord's three favourite investments across three defined Buffettology moats.

If you can find a cheap share that shines across all three moats - share it with us.

GAW falls into the moat of "Owning a piece of the customer's mind".

"They would find a way to play it if they were 100ft underground." - the lock-down has been a test of this statement. We shall see if Keith is correct.

[robinnicolson] 08/5/2020 10:37

games-workshop.com traffic analytics for April 2020 (month-on-month change)

Visits: 15.9 million (+9.52%)
Unique visitors 3.9 million (+21.75%) !!
Average visit duration: 09:06 minutes (+1.3%)

[cockerhoop] 08/5/2020 09:18

Nod,

No expert on digital gaming but in answer to your earlier question both Total War and Vermintide 2 appear to be still be selling well with further expansions and DLC's being regularly released for the base games.

[nod] 07/5/2020 21:08

Last year GW earmarked Germany for expansion. This looks fortuitous as Germany leads the way out of lockdown.

[ianb114] 06/5/2020 21:32

Anyone have any thoughts about those massive trades after hours today?