- Sales and profit higher for eighth consecutive year
- Dividend hiked 77% year on year
- Positive outlook for continued growth
Fantasy miniatures and board games company Games Workshop (GAW) has delivered an eighth consecutive year of sales and profit growth for the period ended 31 May and the highest since coming to the stock market 29 years ago.
The headline numbers were in line with the trading update on 14 June, with core revenue coming in at £445.4 million (excluding licensing income) compared with ‘not less than £440 million’ and pre-tax profit of £170.6 million compared with ‘not less than £170 million’.
This means revenues grew 15% year on year while pre-tax profit was up 9%. In constant currencies (78% of revenues are generated outside the UK) revenues were 8% ahead.
Analysts at Jefferies highlighted a clear second-half acceleration with revenues up 18% compared with 11% in the first half and operating margin increasing to 34.6% compared with 32.6% in the first half.
The standout metric was cash generated, which jumped to £155.5 million from £79.3 million on 2022 and allowed the company to increase the annual dividend by 77% to 415p per share.
Return on capital employed, a key long-term performance indicator, increased to 133% from 118% in 2022.
SHARES UP WITH EVENTS
The shares have gained almost 50% over the last year taking them to within striking distance of the all-time high set in September 2021 of £120. That roughly coincides with the start of a period when Games Workshop stopped beating analysts’ earnings forecasts.
After such a strong run and a trading update in line with expectations, the shares were flat at £113 in early trading.
WHAT IS THE OUTLOOK?
The firm said it continued to focus on product quality, and in June it launched ‘the best Warhammer 40,000 range of miniatures in our history’. There is a stated ambition to grow the business ‘in every major country in the world’ with plans to open 30 new stores including 16 in North America, 11 in Europe and three in Japan.
Investors hoping for commentary on the Amazon agreement to license the company’s intellectual property into a TV series would have been disappointed given no further detail was provided due to ‘legal constraints.’
LEARN MORE ABOUT GAMES WORKSHOP
