Shares digital

Another set of disappointing results didn’t stop Tom Kirby, the chairman of Games Workshop (GAW), swooping for 120,000 shares in the beleaguered company, but investors should be wary of following his lead. Historically, neither he nor chief executive Mark Wells have been shrewd investors in the stock, a fact born out by deals just over a year ago, when Wells bought 52,467 shares at 377p, while Kirby also bought shares at 359p in the wake of more depleted figures in 2006 (Shares 10 August ‘06), and again at 350p later that year. Today the shares are worth just 209.5p.

The only group director to have come out well lately has been non-executive director Alan Stewart, and that was only due to him selling shares last year at 350p. Stewart’s sale was related to ‘personal reasons’ thought to be the breakdown of a personal relationship

The fact that the board has historically shown undue faith in the ability of the company to recover may explain their failure to react quickly enough to difficulties in the market place following the end of the Lord of the Rings boom.

Following the interims analysts are forecasting earnings of 7.4p, rising to 9.4p next year, placing the shares on a PE of over 28, falling to a still expensive looking 22 next year. The interim dividend was passed and few expect any payment this year.

Shares says: Kirby’s optimism has not been a good guide in the past and is unlikely to be so now. The rating is too demanding.