Shares in fantasy miniatures company Games Workshop (GAW) surged 12% to £97.70, having briefly breached the £100 mark to hit an all-time high, after saying trading was ahead of expectations for the three-months to 30 August.
SPECIAL DIVIDEND
The company has a policy of distributing what it considers genuinely surplus cash to shareholders, that is beyond what it needs to maintain operations and grow the business.
Over the last 25 years the dividend has grown at 15.4% a year or roughly 26 times, demonstrating the cash-generative nature of its operations.
A final dividend of 50 pence a share will be paid on 23 October to shareholders on the register on 17 September. Those investors opting for the re-investment plan have until 2 October to make their decisions.
PROFITS AHEAD
Company estimates show quarterly revenues around £90 million, 15% ahead of 2019, while operating profits before royalty payments are 61% higher around £45 million and royalty income is 50% ahead of last year around £3 million.
This is an extraordinary outcome, driven by online and trade channels given that the retail stores are recovering from earlier closures.
Russ Mould, Investment director at AJ Bell commented, ‘for what feels like the umpteenth time the Nottingham-based fantasy miniature figures seller is trading ahead of expectations and has made an earlier than expected return to the dividend list.
‘The business has significant operational leverage, as many of its costs are fixed, so a big chunk of any increase in sales drops straight through as profit and cash.’
