Warhammer shop front
Games Workshop beats full year estimates / Image source: Adobe
  • Full year revenue and profit ahead of expectations
  • Big jump in licensing income
  • Analyst upgrades expected

The hobbyist end of the gaming market appears to be as popular as ever after fantasy miniatures maker Games Workshop (GAW) revealed better than expected full year revenue and profit.

The shares, which have been in a holding pattern this year, trading between £90 and £100, jumped 8% to £101.80, as investors anticipated earnings upgrades from analysts. Consensus EPS (earnings per share) estimates have been revised upwards by around 3% over the last year.


Core revenue for the year to 2 June, which excludes burgeoning licensing sales, is expected to be at least £490 million, with licensing income expected to be £30 million, an increase of 10% and 20% respectively. Consensus estimates were calling for total revenue of £494 million, equating to a 5% beat.

That said, the company has often cautioned that licensing revenue is ‘lumpy’ which is why it is reported separately to core revenue. Chief executive Kevin Rountree has said he believes Games Workshop has some of the best unexploited IP (intellectual property) globally.

A big step-up in realising that ambition was the tie-up with Amazon (AMZN:NASDAQ) to develop the Warhammer 40,000 universe into films and TV series in December 2022.

Jefferies estimates it could eventually earn Games Workshop $1 million per TV episode, although it could be up to three years before a series hits the screens.

Moving to the profit line, the company said it expects full year group pre-tax profit of at least £200 million, up 17% on the £171 million reported in 2023 and 5% ahead of analysts’ estimates.

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Investment director at AJ Bell, Dan Coatsworth, commented: ‘There is no insight into trading, no comment on new developments, and no guidance for future earnings.’

Under normal circumstances, shareholders would be livid about such treatment, he said. But anyone invested in Games Workshop seems to be used the bluntness of its announcements and takes the view that no news is good news when it comes to details on the business.

‘The numbers spoke for themselves, with profit expected to beat market expectations. Licensing income is really picking up, which is important to Games Workshop’s strategy of trying to sweat its assets and find more ways to commercially exploit its intellectual property.’

Jefferies said the full year out turn represents a ‘robust end to the year resulting in another small upgrade to consensus, even if this was mostly driven by the lumpy Licensing income line’.

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (Steven Frazer) own shares in AJ Bell.


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Issue Date: 19 Jun 2024