Games Workshop Share Discussion Threads

[wildshot] 18/1/2021 13:50

Thanks for the quick reply goldilocks1. You may well be right. I haven't researched that far back.

GAW only came onto my radar as an investment about 11/12 years ago when a former colleague joined my employer and used to work there. We had some interesting conversations which put it on my watchlist.

[goldilocks1] 18/1/2021 13:05

it's possible that i'm talking total rubbish - as i regularly do - but i see that back in 2001 share price dived to 130p from a high of 850 in may 1998 ..... it's something at the back of my magpie brain

for all that, i confess this is not a company i have regularly followed and indeed did not buy into until a couple of months back

[wildshot] 18/1/2021 12:50

Hi goldilocks1, do you have an estimate as to when this might have been? I have been a holder since 2011 and never worried about their financial future. I did reduce my holdings in 2013 when business went soft under the old management but I never thought it was critical.

(For the record I added in 2015 and not traded them since.)

[goldilocks1] 18/1/2021 11:56

didn't GAW nearly go bankrupt several years back, prior to the current management taking control?

[nod] 18/1/2021 11:25

Agree, goldilocks. Going back to the 80s and 90s, I would trade stocks frequently, including GAW which was highly cyclical.Over the past 13 years I've never sold a GAW share.We had some lean years, following GFC, but I felt the company was doing the right thing in pursuing its international expansion and online sales.The old'uns may recall, there was a saying that America was the graveyard for great British companies. It often was.

[1rcl] 18/1/2021 09:23

IMO, at a PE of ~25 on this year's plausible earnings, today's price is pretty much a bargain entry point, given GAW's quality and potential for significant profit growth.

[goldilocks1] 18/1/2021 09:00

to me, it was the last paragraph that, as so often, held most sway
one telling observation was that new investors should not try to wait for some bargain price entry point, as there almost certainly won't be one

======================

Games Workshop is no doubt a high quality operation, with a winning focus on product, engagement and scale. This means that investors will likely struggle to find a bargain entry point. But the market hype that has followed the stock meant that shares slipped 9 per cent on the day of the results. With a still demanding price to earnings ratio of 36, the shares do not seem as expensive as usual. Buy.

[luderitz] 17/1/2021 17:53

Yes just read that and thought it was positive.

[sogoesit] 17/1/2021 17:44

More from Chronic Investor this weekend in Companies Comment:

"Games Workshop chases scale
Undeterred by Covid-19, the games maker is pursuing international growth.

* Loyal fanbase and new game launch support sales
* Solid performance in North America and more factory openings point to greater scale


The nerds have conquered again. Games Workshop’s (GAW) operating profit grew by more than half to £92m in the six months ended in November, as the wargames maker proved once more that its fans are hooked on its fantasy lore. Or perhaps it is the fumes from the paint. Either way, hobbyists eagerly greeted the release of the latest version of Warhammer 40,000 in the period, which management said was its most successful launch to date.

GAW:LSE
Games Workshop Group PLC

1mth
Today change
-5.22%Price (GBP)
10,710.00
This unwavering passion for miniature orks, and other such fantastical creatures, is the company’s lifeblood. And management is harnessing its energy: the new range’s ‘IndomitusR17; box for example was designed to reward existing customers, and sold out extremely quickly. Fans spent more time with the brand online, as the ‘warhammer-community’ website grew to an enormous 4.7m users, and customer sessions and pageviews grew.

Focus on engagement evidently pays off. Sales have been so strong that the company said that its ‘out of stocks’ are currently running higher than it would like. Sales to independent retailers grew by a third, with the net number of trade outlets increasing by around 200 accounts to surpass the 5,000 mark. But the biggest growth, unsurprisingly, was in online channels where revenues surged by 87 per cent. Management did note, however, that the user experience for its website still needs to be improved, with a greater focus on personalised content and ease of navigation.

Its bricks and mortar stores did not perform so well, hurt by coronavirus restrictions - although the company noted that it was in the process of cancelling its access to the UK’s business rates retail discount scheme. It reiterated its commitment to physical shops, describing retail as “paramountR21; and the best place for the customer to start their journey with the hobby - which goes some way in explaining why the company opened two stores in new locations in the period. Still, if current sales trends continue for the rest of the year, management estimated that around 50 stores out of 529 would not break even.

Overall, gross margin moved up an impressive 6 percentage points to 75 per cent, credited to increasing volumes. This was no doubt helped by its focus on manufacturing, with output up by almost a third: the Warhammer 40,000 launch alone broke records for factory production volumes, in what management described as a “step change” in unit sales.

Developing its manufacturing capacity scale remains a key focus for management, who are already overseeing the redesign of one of its factories in the UK and who have secured more adjacent land in Nottingham to open up “future options”.

This push for greater scale is already bearing fruit: sales in North America performed particularly well, where revenues generated by third-party retailers grew by almost a third to £45m, accounting for two-fifths of the trade division’s total.

Keen engagement, robust revenues and growing scale make for an attractive combination. It is hardly surprising then that Games Workshop was able to pay £1.3m to its staff in December, as well as a total £5m bonus to all of its employees. And shareholders have not missed out: management dished out £26m in dividends, and still finished the period with £96.5m worth of net cash (excluding lease liabilities), compared to £53m at the same point last year.

Games Workshop is no doubt a high quality operation, with a winning focus on product, engagement and scale. This means that investors will likely struggle to find a bargain entry point. But the market hype that has followed the stock meant that shares slipped 9 per cent on the day of the results. With a still demanding price to earnings ratio of 36, the shares do not seem as expensive as usual. Buy.

GAMES WORKSHOP (GAW)
ORD PRICE: 10,870p MARKET VALUE: £ 3.56bn
TOUCH: 10,850-10,890p 12-MONTH HIGH: 11,730p LOW: 3,590p
DIVIDEND YIELD: 1.0% PE RATIO: 36
NET ASSET VALUE: 556p NET CASH: £51.2m
Half-year to 29 Nov Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend † per share (p)
2019 148 58.6 146 100
2020 187 91.6 226 80
% change +26 +56 +55 -20
Ex-div: -
Payment: -
† A further dividend of 60p per share was declared on 7 December 2020 and is to be paid on 25 January 2021."

[cockerhoop] 16/1/2021 16:31

I did notice that around 1pm ish.

Dug out my notes, they suggest a new licence deal has been secured with Amazon for LOTR miniatures to accompany the series.

[1rcl] 16/1/2021 14:34

Re: LoTR pre-orders. Now all 6 out of stock.

[cockerhoop] 16/1/2021 11:06

Coincidently there were some LOTR pre-orders up at 10am this morning. 4 of the 6 sets were sold out by 11am on the GW website.

Still feels some love for it amongst the Warhammer Community.

[nod] 16/1/2021 09:18

Amazon gave an exclusive update to theonering.net below, which other sites have taken extracts from. Release is a year away at best, schedules always seems to slip in the film industry.https://www.theonering.net/torwp/2021/01/12/110065-exclusive-official-show-synopsis-for-amazons-lord-of-the-rings-series/

[nod] 16/1/2021 09:09

The Amazon Tolkien series (at least five Series are planned) is set 2000 years before The Hobbit and LOTR. I doubt there will be much material that GAW can re-use for the Amazon show. However, I expect GAW will benefit, as it did when The Hobbit was released. Millions of teenagers will watch the previous trilogies for the first time ... LOTR and The Hobbit. Millions will be drawn into this brilliant fantasy world. This can only be good for GAW.We renewed our licence with Tolkien owners some years ago.If we can obtain a licence to make models and fantasy worlds based on the new Amazon Series, all the better. There's no company better placed than GAW to do this.

[cockerhoop] 15/1/2021 16:46

1rcl,

You're right that GAW would need a further licence to cover the Amazon series (this was confirmed to me by KR at an Agm a while ago (2017 or 2018??)

At the back of my mind I thought they subsequently obtained it but that may be wishful thinking.

[hawaly] 15/1/2021 16:43

Podcast link:
hxxps://podcasts.google.com/feed/aHR0cHM6Ly9yc3MuYWNhc3QuY29tL2ludmVzdG9yc2Nocm9uaWNsZQ/episode/YTI3ZjYxMTktMjYyMS00MTE3LThlNWEtODUwYjA5ODYxYmE1?hl=en-GB&ved=2ahUKEwi29dqWmp7uAhWTTsAKHTuPDU0QjrkEegQICBAI&ep=6

[luderitz] 15/1/2021 16:23

Is that IC Alpha Podcast free or payed for I can't remember ?

[cockerhoop] 15/1/2021 16:06

I think there would be new ranges launched to complement the new characters and setting. Nod will know more but there was a pretty decent LOTR spike in sales in the early 2000's

Talking about the Rise of Sauron suggests a darker (more Warhammer) style storyline.

[cockerhoop] 15/1/2021 15:41

Amazon LOTR series edging towards completion

[robinnicolson] 15/1/2021 13:24

Geeky but a little more detail on that troublesome ERP: