- Full year profit ahead of expectations
- Strong trading across core business and licensing
- Builds on strong first half
Fantasy games and miniatures retailer Games Workshop (GAW) rolled the equivalent of double-six on Wednesday (5 March) after confidently forecasting full year pre-tax profit to the end of May will be ahead of expectations.
The shares jumped as much as 8% to top the FTSE 100, notching up another new all-time high of £149, taking gains over the last 12-months to 56%, comfortably ahead of the 15% advance for the blue-chip index.
It is encouraging that the upgrade comes so soon after first half results (14 January) which showed revenue and profit up 16% and 22% respectively, against tough prior year comparisons.
SHORT AND SWEET
The Warhammer franchise owner said trading in the first two months of the calendar year has been ahead of expectations driven by strong trading across both its core business and licensing.
Peel Hunt noted positive momentum is further fuelled by the recent (10 December) agreement with Amazon (AMZN:NASDAQ) on the creative guidelines to adapt the Warhammer 40K universe into films and television series, together with associated merchandising rights.
The broker raised its full year sales and pre-tax profit forecasts by 5% to £600 million and 9% to £240 million, respectively.
Consensus pre-tax profit forecasts currently sit at £225.5 million, according to Refinitv data.
Jefferies commented: ‘A typically succinct update from Games Workshop with no indication about the scale of the likely upgrade today.
‘While clearly a positive that this is being signalled just weeks after the interim results, we expect it will come as little surprise with many having viewed consensus full year 2025 expectations as having been pitched too conservatively in light of the strong ‘‘Space Marine 2’’-led first halfresult.’
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Investment director Russ Mould at AJ Bell said: ‘In a world full of uncertainty around economics, politics and consumer and business confidence, it’s refreshing to see a company be able to get on with the job of making money.
‘Games Workshop is showing resilience in the face of a difficult market backdrop and it’s impressive how it has prospered this year. Games Workshop’s recent promotion to the FTSE 100 puts pressure on management to keep delivering good news.
‘They will want to show the world that its inclusion in the premium UK index is not a brief visit and that the business has what it takes to stay in the top league.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Martin Gamble) and the editor (Steven Frazer) own shares in AJ Bell.
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