Games Workshop profits continue to grow as hobbyists demonstrate post-lockdown loyalty to Warhammer brand
- Warhammer creator’s core revenue climbed 9.5% in the year to May 2022
- Trade has continued to grow since the Coronavirus pandemic
- Company has rebuilt its relationship with customers following IP disagreements
Games Workshop Group has once again posted a jump in pre-tax profit and revenues for the financial year.
The Warhammer creator saw pre-tax profit rise 3.7 per cent to £156.5 million in the year to May 2022, with revenue climbing 12.25 per cent to £414.8 million over the same period.
Since the start of the Coronavirus pandemic, the Nottingham-based company has seen record levels of trade as people have looked to occupy themselves while spending more time at home.
Analysts expect the company’s success to continue despite the economic conditions as hobbies tend to be ‘resilient during recessions’.
In its most recent half year results Games Workshop generated revenue of £191.5million compared to £148.4million in the equivalent period two years ago, thanks to solid growth in purchases online and sales to trade customers.
Over the past year dividends per share soared 54 per cent to 285 pence from 185 pence at May last year.
Kevin Rountree, CEO of Games Workshop said: ‘It’s been another astonishing year. I once again take great comfort that some things don’t change – our staff and customers love Warhammer. I thank you all for helping make this another very successful year.’
Core revenue jumped 9.5 per cent to £386.8million over the period.
Games Workshop estimates that it missed out on around £4million in net revenue over the year as a result of suspending trading in Russia, following the country’s invasion of Ukraine in February.
While the firm opened 10 new stores worldwide over the year, including relocations, it closed 15, taking its total to 518.
It also reported a 3 per cent drop in online sales compared to the previous year, as in-store sales volumes normalised.
Games Workshop shares fell 2.12 per cent in early trading to 7,335p, bringing losses to 27.3 per cent since the start of 2022.
The board of Games Workshop said: ‘We are on the front foot, have a clear strategy for our core and licensing business, a culture built on long standing proven principles, a pretty good operational plan building on the progress we have made, a work ethic built on trust and a hobby that is fun and engaging.
‘We look forward with a great deal of confidence. Our goal remains the same to deliver our strategy and share our love for Warhammer, globally.’
Previously the company has come to blow with fans over its insistence on protecting its intellectual property. This included tactics such as lawyers sending letters to online fan forums accusing their members of breaching copyright.
In an analyst note, investment bank Peel Hunt praised Games Workshop’s results: ‘Full-year profits increased by 4 per cent to £156.5m and by 6 per cent in constant currency, which is a good result given the pressures of Covid, supply chain disruption and higher freight costs.
‘The company has announced a dividend of 90p, which corresponds to the cash payments from last year and demonstrates a continued good profit and cash performance.
‘The company aims to grow sales and maintain margins. Hobbies tend to be pretty resilient during a recession (as evidenced in the GFC) and Games Workshop has plenty of new product to engage its hobby base. There continues to be considerable opportunity to grow in North America and (longer-term) Asia, as well as monetise the IP.’
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