- Revenue up 7.1% in the first half
- Pre-tax profit dips amid rising cost and falling licensing income
- Dividend increased 65%
Some of the recent momentum behind table-top fantasy games outfit Games Workshop (GAW) stalled on Tuesday. First half results lacked any new detail on a possible tie-up with Amazon (AMZN:NASDAQ) and provided evidence of some challenges at the business.
Games Workshop shares surged around the turn of the year on news it had agreed ‘material commercial terms’ with Amazon to develop its Warhammer universe into film and TV productions, an agreement which would involve the former receiving merchandising rights. The deal has not been completely firmed up yet although Superman actor Henry Cavill has been attached.
In terms of the results themselves, revenue for the six months to 27 November was up 7.1% to £226.6 million, with core revenue, stripping out licensing income, above £200 million for the first time. Licensing income slipped from £20.1 million to £14.3 million and pre-tax profit was down 5.2% to £83.6 million. Operating expenses were up 6.5% year-on-year to £67 million and the shares fell 4.1% to £87.48.
More positively the dividend was up 65% to 165p with a 130p special dividend on top.
WHY THE COMPANY NEEDS A ‘LITTLE MORE NOUS’
Acknowledging disappointment around sales growth, particularly in the US, the company was candid about some of the difficulties it is facing: ‘Our current level of global sales is relatively new to us, so we are rapidly changing and learning as we go: managing and forecasting new release products for our broad range, at our highest ever volumes, is a reasonable challenge.
‘We are working even harder on range management processes to ensure our whole offer gets its due attention at all times: as a team we need to scale with a little more nous.
‘Our global projects continue to be delayed - it remains an ongoing challenge to integrate new IT systems when we are still heavily reliant on working with our legacy IT systems. Finishing these projects and upgrading our systems continue to be a key area of focus,’ it added.
The director of consumer research at Edison, Russell Pointon, said: ‘Although investors will have to wait until the second half of this year to see if the deal (with Amazon) concludes and licensing profits materialise, this mainstream TV/film production with its Hollywood casting, including fan favourite and Warhammer enthusiast Henry Cavill, has the potential to enhance the brands reach and awareness.
‘Combined with the groups’ ongoing video game partnerships which include the Total War Series and Blood Bowl game which launches next month, and its strong financial position going into 2023, Games Workshop will likely only continue to solidify its position as the leading international fantasy tabletop game provider.’
