Games Workshop Share Discussion Threads

[simso] 03/7/2017 10:48

skirbell, I agree that discretionary spending is a concern, and I am wary of Retail in general, with that squeeze on real incomes and its impact on spending, Minimum wage costs, Rates revaluation etc. However, one reassuring fact is that (from memory!)72% of GAW sales are from outside of the UK.

[skirbell] 03/7/2017 08:55

For me, the main take away from the TMF article is around discretionary spending. Neither company produces anything that can be considered essential products and therefore, any economic slow down might get reflected in lower sales as consumers pull back on their spending habits. GW products, while quality, aren't cheap.

Game Digital is only half a proxy for the state of the digital gaming industry and offers some insight into the possible royalty stream that GAW might expect. GD has high overhead costs and completely missed the rising competition from online retailers such as Steam until is was almost too late. So trying to draw a direct comparison between GD and GAW is entirely wrong.

The launch of GAW's new version of their largest product, Warhammer 40k, appears to be going well and there is a constant stream of additional products in the pipeline. This will help support the growth in the near term.

[nod] 02/7/2017 12:07

In fairness to TMF, both companies have Game in their name and both have stores, so must have very similar prospects :/Where did TMF get the GAW forecast from?

[cockerhoop] 02/7/2017 11:24

Every TMF article compares 2 or 3 often completely unrelated companies. They seem incapable of doing any sort of in depth single company research.

[crazycoops] 02/7/2017 11:13

These TMF articles are just so shoddy. Broker forecasts are predicting 50% increase in profits in 2017. They are currently showing a 10% drop then in 2018 but that will likely be upgraded in the post results update.

[simso] 02/7/2017 09:44

If we believed the broker Forecasts for 2017/18 then the Motley Fool article suggesting GAW are fully valued might be fair. However, I see three reasons for hoping we will continue to beat the Brokers view:

1) licensing. I understand the main reason why the brokers view shows a total profit reduction of 11% is that they have pencilled in £3m for licensing income compared to £7m for the year just finished. The broker justification for the drop is more about lacking visibility, therefore best to be prudent, rather than absolutely knowing anything specific.

2) The new Warhammer edition game launch at the start of this year.

3)the underlying momentum of the business. Growth was accelerating as last year progressed, with the second half even stronger than the first.

As always on this very well considered board, I would Interested to hear anyone else views about the year ahead.

[nod] 02/7/2017 03:40

Motley Fool article about Game Digital and GAW. They are very different companies.Is Game Digital plc a falling knife to catch after dropping 30% today?By The Motley Fool 30 Jun 2017, 13:45OutlookThe prospects for retailers such as Game Digital and Games Workshop(LSE: GAW) appear to be rather bleak. The outlook for consumer spending remains tough and, realistically, things could get worse before they get better. Political risk remains high, and this could hurt business confidence and create a prolonged period of economic gloom. This may lead to profit warnings across the retail sector such as that experienced by Game Digital on Friday.In terms of the future prospects for the firm, it seems to be dependent upon the supply levels of the latest Nintendo console. While it is optimistic about this, there is no guarantee that supply levels will improve. Therefore, it may be prudent for investors to await further updates before buying a slice of the business, given its uncertain outlook.In the case of Games Workshop, it is forecast to deliver a fall in earnings of 11% this year. This is due to be followed with growth of 3% next year. Given that it trades on a price-to-earnings (P/E) ratio of 14.6, it seems to lack a sufficiently wide margin of safety to warrant investment at the present time. While the company may have a sound strategy and strong business model, external factors could count against it and lead to relatively disappointing share price performance.

[simso] 25/6/2017 13:11

I spent an interesting couple of hours this morning reading all the posts on this high quality board, posted over the last year. A particular stand out comment, when read with hindsight, was from Woozie1 on 11 Jan, at a point in time when Peel were forecasting 57p EPS this year...

Woozie1 said (post 1086) "If we apply the 40/60 split to the current year, we'd expect EPS of 51p in H2, giving a full year figure of potentially 85p". That was a good call back then, given it appears we should get at least 92p!

Peel were extremely prudent, and many posters here clearly had a better handle on where the business was heading. Lets hope the same is true of this year's Peel Forecast, so we can continue this lovely cycle of "ahead of expectations" and "heres yet another special dividend"

[nod] 25/6/2017 08:30

GAW has been plugging away at China but its customers need to be affluent Chinese. However, there are many cheap counterfeits in China. GAW recently opened its own store in Hong Kong and appointed territory managers.
An Asian edition would be interesting.
GAW made Blood Bowl for the USA market.

Last Annual Report:
"Asia
After overcoming the burden of paper work and complexity of opening businesses in Asia we now have four new sales territory managers in Asia; in Singapore, Hong Kong, Japan and Malaysia in addition to our existing business in China. They will grow Games Workshop profitably by opening stockist accounts and our own stores."

[rfgraham] 25/6/2017 07:34

I'm wondering if the main growth for the share is going to come from China and Asia going forward. That's a huge market they haven't got into (substantially) and I can imagine doing well. They may have to do what the Hollywood film producers do and start bringing more Eastern themed characters into their products to help the appeal over there. I agree about the currency situation being the one to monitor for the Short term.

My son and I have just bought the latest 8th edition of 40k and we're very impressed with it. He's only 7 but he can understand the rules now which means I think GAW have done the right thing on their new approach. The product quality is fantastic.

[nod] 25/6/2017 03:06

In its last update the company singled out the weak pound for assisting improved sales and profits. The pound will one day change direction and this is a risk for GAW investors.Personally, I can't see the pound rising much over the next year or two, primarily due to Brexit but also a wounded government. There is a lot of uncertainty in the UK and currencies don't like uncertainty.Imho GAW will likely benefit from a weak pound for a few years.However, the other risk is the USA. What happens to our profits if the USD falls?This could be due to its internal problems and infighting, or perhaps an overseas conflict, which Trump seems to be looking for to create a major distraction.Extract:"Sales and profits have benefitted from the continuing favourable impact of the weaker pound.We will provide the detailed information on the audited results for the 2016/17 financial year at the time of our full year results announcement on 25 July 2017."

[nod] 25/6/2017 01:04

In its long 42 year history Games Workshop has had its ups and downs. I have followed them closely since their stock market float in the 90s but knew of their products since the 80s because of nephews.The spikes in sales have occurred when it has focused efforts on attracting young players e.g. when LOTR was released and hopefully now with AoS.I piled into the shares in the early 90s when LOTR was released and did very well. When I started this thread I was optimistic but not a shareholder for a year or so as 40k was struggling to grow and Online was slower than I expected and then EA got into financial difficulty.

[simso] 24/6/2017 22:50

Thanks Nod. I am investing significantly in Games Workshop, yet feel slightly uncomfortable in not fully understanding it.
The recently reported exceptional performance in the second half has clearly moved the share price up, and the broker note expressed the view that recent performance had been surprisingly strong against their expectation of a tail off in advance of the 8th edition launch. Perhaps there was no tail off..but more the opposite case of a peak of vets buying before stock is replaced by 8th edition.
Is there a one off spike in sales performance at the end of last financial year for this very reason, which may be difficult to repeat, or is it (as I hope) that the new year ahead will be much stronger than last year driven by sales of the new 8th edition.

[nod] 24/6/2017 00:49

I would imagine many of the veterans will continue to play the old games, including LOTR. They have the models and terrain and know the complex rules. AoS is more akin to LOTR where a new generation of hobbyists and players entered the stores for the first time. Some stayed on to become the vets of today. Some LOTR players 'graduated' to 40k.I've mentioned on here that over recent years I sold my son's LOTR models and they were very popular and fetched good prices.

[simso] 23/6/2017 15:14

I have spent some time reading several online reviews of the 8th edition by various fans, and generally it seems positive. The themes about it being more accessible and easier to play and with shorter game times come across. I guess we have to guard against the potential for the real "die hard" fans to prefer the complexity of previous versions...although I can find no sense of this yet. Has anyone else got any sense over the last week since the launch, from people they know who play this?

[nod] 22/6/2017 10:29

Interesting article and some good points made about recent changes. Tom Kirby was not CEO for five years (Dec 2007 to Jan 2013) but was Chairmen and very influential during Mark Wells' 5-year reign as CEO.
Kirby went to live in the USA for three years to more aggressively develop GW over there and that has paid off handsomely, albeit he grew stores a little too fast and too large (expensive), which hurt profits.

GW IP has been used in video games for many years and GW was not opposed to them. GW are not video game developers so are dependent on third parties in that area. Had Warhammer Online had the funding required (2008-2009) things may have been different today. Unfortunately EA hit a wall early in the financial crisis and chose to significantly cut investment in the MMPOG.

[shanklin] 22/6/2017 08:26

Very interesting article. Makes it sounds as though GAW have massive potential in terms of (re-)enthusing the customer base they used to actively treat badly.

[someuwin] 22/6/2017 07:45

...Very positive.

[panic investor] 20/6/2017 10:01

Very envious Nod - well done to you Sir !

[chester] 20/6/2017 06:29

Nod , you certainly have had an interesting and much travelled life.
On top of that, you are still posting on a thread you started 9 years ago.
That is an achievement in it's self.