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Games Workshop announces higher than expected summer sales

‘No question that Games Workshop is a winner’ as fantasy gaming firm announces summer sales spike

  • Since March 23, Games Workshop’s share price has shot up by 269 per cent 
  • Games Workshop had the second-best ROI on the FTSE 250 during the 2010s
  • Analyst Russ Mould: ‘Simply put, this is an excellent and brilliantly-run business’ 

Warhammer maker Games Workshop saw its share price soar by 11.2 per cent today after announcing that trade over the summer months was ahead of its expectations.

 

The Nottingham-based manufacturer said its sales were around £90million between June and August compared to £78million over the same period last year.

It attributed the growth to a strong performance both online and in stores. However, it noted that retail demand was ‘still recovering’ from the closure of its high street outlets earlier in the year as a result of the coronavirus pandemic.

(Pictured) A Comic Con convention-goer stands next to an Orc from the Warhammer 40,000 series. Games Workshop is the maker of the Warhammer fantasy miniatures game

Nonetheless, the FTSE 250 company said that, ignoring royalty income, year-on-year operating profits were about 60 per cent higher than last year’s figure of £28million.

Shares continued their strong decade-long growth this morning, rising 11 per cent to £97.55. In 2020 alone, their value has also climbed 60 per cent. 

They took a tumble as lockdown restrictions began to be imposed worldwide, but since March 23, it has shot up by 269 per cent.

Games Workshop’s quarterly results are the first to come after chief executive Kevin Rountree reported that the firm had experienced its best-ever year.

In the 12 months to May 31, the wargame creator declared revenues of £269.7million and operating profits of £90million, against £256.2million and £81.2million the previous year, respectively. It was also the fourth consecutive year of record sales and profits.

‘You can once again see from these results that our business and the Warhammer hobby are in good shape,’ remarked Rountree. ‘We look forward to the year ahead and will face any challenges head-on and learn from our mistakes.

Games Workshop is now a £3bn pound behemoth that's 50% more valuable than M&S

Games Workshop is now a £3bn pound behemoth that’s 50% more valuable than M&S

The firm’s board has proclaimed a dividend payment of 50p per share that will be paid out in six weeks and which is in line with its programme to give out surplus cash.

Russ Mould, an investment analyst at AJ Bell, provided a highly complementary assessment of the company. He wrote: ‘There is no question that Games Workshop is a winner on the stock market.

‘For what feels like the umpteenth time the Nottingham-based fantasy miniature figures seller is trading ahead of expectations and has made an earlier than expected return to the dividend list.’

Investors who purchased £100 of Games Workshop stock at the start of the 2010s would have seen it appreciate by 2630 per cent over the decade

Investors who purchased £100 of Games Workshop stock at the start of the 2010s would have seen it appreciate by 2630 per cent over the decade

Three months ago, the company said that since a majority of its 532 shops had reopened, its recovery had been ‘better than expected’ even though its factory had been working ‘in a limited capacity’ because of social distancing measures. 

Games Workshop had the second-best return on investment during the 2010s on the FTSE 250 Index. By comparison, Tullow Oil, who released their half-year figures yesterday, had the worst-performing stock.

Investors who purchased £100 of Games Workshop stock at the start of the decade would have seen it appreciate by 2630 per cent by the end.

‘Simply put, this is an excellent and brilliantly-run business,’ added Russ Mould.

‘The company is reaping the rewards from having got its act together on the digital front in recent years – enabling it to continue generating bumper sales through lockdown despite the obvious impact on its physical stores.

‘It always helps when a company understands its customer base and is able to deliver what that customer base wants. This is something Games Workshop has got down to a tee.’



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