Games Workshop Post Record Sales and Profit, Despite Slower Growth

Games Workshop posted record sales and profit in the six months to December 2018. Sales were up 14% over the previous year at £125.2 million and pre-tax profit grew 7% to £40.8m. The company announced a dividend of 25 pence per share to be paid on March 1. Despite this, growth slowed to 39%, down from the same period in 2017 when sales grew 50% and profit almost doubled.

“Our business and the Warhammer hobby continue to be in great shape. We have remained true to our long-term strategy, and once again delivered on our promise to produce and sell the best fantasy miniatures in the world, while engaging and inspiring our fans,” Chief Executive Kevin Rountree said in the earnings release.

Retail £42.3 million (2017: £39.6 million)
Trade £60.7 million (2017: £48.0 million)
Online £21.2 million (2017: £22.0 million)

Investment projects have had an impact on the company’s gross margins and stock levels. In August, proposals for an office building and factory were approved by the Nottingham City Council. After completing this and an ERP project the company will begin to upgrade warehousing in Memphis and Nottingham.

“These further investments will help us maintain our current volumes, increase efficiencies, and give us good scope for sales growth in the future,” Rountree said.

Retail growth improved in all territories except Australia and New Zealand. The company opened 23 stores, including relocations, and closed 5. They ended the reporting period with 507 stores. The company said recruiting new store managers remains a major focus the company.

Sales in the Citadel online shop were flat from last year, while Forge World and Black Library stores declined. The company is continuing to invest in online experience and functionality. Game Workshop titles are now available on Audible which has increased exposure to new customers.

The number of trade accounts increase by 300 and achieved growth of 26% in all key territories. The company said a large number of independent retailers now sell products online, giving customers more places to buy products.

Visitors to the Warhammer Community website increase 30% over last year, with almost a million visits to the site each week. The company also said 250,000 people have signed up for site.

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