- Trading ahead of expectations
- Big jump in royalty income
- Amazon tie-up news imminent
In an unscheduled update, fantasy miniatures maker Games Workshop (GAW) said trading since 8 September is tracking ahead of expectations and provided new financial estimates for the half year to 1 December.
The news was well received with the shares jumping as much as 15% to a new all-time high of £136.5, taking gains for the year to 37%, comfortably ahead of the mid-cap FTSE 250’s 5% advance.
WHAT IS THE NEW GUIDANCE?
Games Workshop now estimates first half core revenue at actual exchange rates should increase by a tenth to not less than £260 million and sees licensing revenue of more than £30 million compared with £13 million in the prior year.
Pre-tax profit is estimated to be not less than £120 million, equating to a 25% year-over-year gain.
Consensus earnings estimates for May 2025 have increased by around 5% since the company’s last trading update, suggesting analysts were anticipating building momentum at the half year stage.
AJ Bell investment director Russ Mould noted the big uplift in anticipated licensing revenue which he put down to strong sales of the Space Marine 2 video game.
‘The beauty of licensing income is it comes with negligible extra cost for the company and therefore is highly profitable.
‘Games Workshop looks to have significant untapped potential in its intellectual property and fantasy worlds. Globally, it has only just begun to explore market opportunities,’ added Mould.
There may also be some excitement building ahead of half year results in January when there is expected to be news on the tie-up with Amazon (AMZN:NASDAQ) to create a Warhammer 40K TV series and film.
The parties had given themselves a period to agree on creative guidelines and that ends on 31 December 2024.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (James Crux) own shares in AJ Bell.
