Fantasy miniatures and table-top war games retailer Games Workshop’s (GAW) shares gain 4.2% (186p) to trade at £46.32 on the news sales and profits continue to march ever higher at the company behind the Warhammer universe.

While today’s pre-close trading update is short on detail, the key takeaway is that growth continued in the financial year to 2 June, despite demanding comparatives, and Games Workshop is pressing on with ploughing a very successful niche.


The firm now expects sales for the year to 2 June to come in at roughly £254m, a smidgeon below the £255.3m paid-for research firm Edison was looking for, yet still up materially from the previous year’s £221.3m. The Nottingham-based business says it will generate pre-tax profit of ‘not less than £80m’, effectively confirming the profit upgrade issued on 12 April and representing significant growth on the previous year’s impressive £74.3m haul.


Encouragingly, Games Workshop flags revenue growth delivery ‘across all sales channels’ and continues to tap into the power of brands spearheaded by the ever-popular Warhammer. The group generated healthy licensing royalties of around £11m last year following the signing of new licensing deals with the major digital games publishers.

And in line with the board’s policy of distributing ‘truly surplus cash to shareholders when it becomes available’, Games Workshop paid a 35p dividend on 31 May, bringing the total paid in the financial year up to 155p versus 126p a year earlier.


The ongoing success of Games Workshop is all the more impressive considering the tough performance comparatives it faces and demonstrates the earnings resilience the company draws from its loyal base of global hobbyists, nigh-on obsessional about its high quality miniatures and games.

Games Workshop’s strong cash generation, earnings resilience and global growth potential have powered consistent upbeat updates and earnings upgrades, sending the shares higher and higher.

Although the consumer backdrop is uncertain in the UK, Games Workshop’s domestic customers are fanatical about the hobby and prioritise spending on its products, and the business also has growing traction in overseas markets.


Russ Mould, investment director at AJ Bell, comments: ‘In typical Games Workshop fashion, its trading update is light on detail but contains the right message to satisfy the market.

‘This truly is a business which has hit the right formula to drive up earnings. Historically it rode the hype around Lord of the Rings as the public snapped up miniature fantasy figures, however that catalyst soon fell away once the film series had ended.

‘This time round it has established a bigger group of fans buying into its Warhammer brand and other items, and is not simply relying on a successful film or book series to drive business.

‘The huge popularity of fantasy series Game of Thrones may have helped raise interest in its products but its fortunes are by no means tied to this TV blockbuster remaining in fashion.

‘While a lot is said about its skills in making miniature models and creating imaginary worlds, perhaps one of the underappreciated points about the company’s success is the way it engages with customers.

‘Visit one of its stores and you’ll find enthusiastic staff who aim to interact with everyone who steps through this door. This creates a feeling of being part of a community, thus strengthening loyalty and raising the likelihood of repeat purchases.

‘Ultimately it is a very well-run company that invests in its business and its staff and that should put it in a strong position to be around for a long time.’

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Issue Date: 07 Jun 2019