Games Workshop profits rise again on Warhammer brand loyalty
Games Workshop profits continue to rise as customers stick to their post-lockdown Warhammer hobby
- Warhammer creator base revenue up 9.5% in year to May 2022
- Trade has continued to grow since the coronavirus pandemic
- The company has rebuilt its relationship with its customers following intellectual property disagreements
Games Workshop Group again posted a jump in pre-tax profit and revenue for the financial year.
The Warhammer creator saw his pre-tax profit rise 3.7% to £156.5m in the year to May 2022, with revenue up 12.25% to £414 £.8 million over the same period.
Since the start of the coronavirus pandemic, the Nottingham-based company has seen record levels of commerce as people seek to keep busy while spending more time at home.
Analysts expect the company’s success to continue despite economic conditions, as the hobby tends to be “resilient during recessions”.
In its latest half-year results, Games Workshop generated revenue of £191.5m compared to £148.4m in the equivalent period two years ago, driven by solid growth in online shopping and sales to professional customers.
Over the past year, dividends per share have climbed 54% to 285 pence from 185 pence in May last year.
Kevin Rountree, CEO of Games Workshop, said: “It’s been another amazing year. I’m once again very reassured that some things don’t change – our staff and customers love Warhammer. Thank you all for helping to make this year another very successful one.
Base revenue jumped 9.5% to £386.8m in the period.
Games Workshop estimates it lost around £4m in net revenue during the year due to the suspension of trading in Russia, following the country’s invasion of Ukraine in February.
While the company opened 10 new stores globally during the year, including relocations, it closed 15, bringing its total to 518.
It also reported a 3% drop in online sales from a year earlier as in-store sales volumes normalized.
Shares of Games Workshop fell 2.12% in early trading to 7,335p, taking losses to 27.3% since the start of 2022.
Games Workshop’s board said: “We are at the forefront, have a clear strategy for our core and licensing businesses, a culture based on long-proven principles, a pretty good operating plan s building on the progress we’ve made, a work ethic built on trust, and a fun and engaging hobby.
“We look forward with great confidence. Our goal remains the same: to implement our strategy and share our love for Warhammer, on a global scale.
Previously, the company had come to blast 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 copyright infringement.
In an analyst note, investment bank Peel Hunt praised Games Workshop’s results: “Fully earnings increased 4% to £156.5m and 6% in constant currency, which is a good result considering Covid pressures, supply chain disruptions and higher transport costs.
“The company has announced a 90p dividend, which is in line with last year’s cash payouts and demonstrates continued strong earnings and cash performance.
“The company aims to increase its sales and maintain its margins. Recreation tends to be quite resilient during a recession (as evidenced by the GFC) and Games Workshop has plenty of new products to engage its recreation base. There are still considerable opportunities for growth in North America and Asia (longer term), as well as monetization of IP.