Games Workshop shares fall as it misses sales target


Games Workshop shares dive as Warhammer maker misses sales target – but FTSE 250 firm’s revenues surpass £200m for the first time

  • Revenues rose 7% to a record £227m in six months to the end of November 2022 
  • Store sales rose 9.8%, trade sales rose 3.4% but global online sales fell 0.5%
  • It has opened a new trade office in Barcelona due to Brexit

Games Workshop posted record sales for the six months to the end of November, but missed targets, sending shares falling 5 per cent.

The Warhammer figurine maker told investors that the 7 per cent increase in revenues to £226.6million ‘isn’t where we wanted to be, particularly in the US’, where sales were flat on a constant currency basis against a record year last year. 

Pre-tax profit fell 5.2 per cent to £83.6million, as it suffered from a fall in licensing profits, but this was before its blockbuster deal with Amazon announced in December. 

Record sales: Games Workshop is looking to sign more licensing contracts, its boss said

While the company reiterated it has not signed any contracts yet, the deal to make Games Workshop’s characters into films and TV series is expected to be lucrative. 

‘We have nothing more to say at this stage,’ the company said. 

‘We will keep you informed. We remain confident we will bring the worlds of Warhammer to the screen like you have never seen before.’

Games Workshop shares fell 5 per cent to £86.70 in morning trading on Tuesday.

However, they have risen by 18 per cent in the last month thanks to the Amazon deal, and by 242 per cent in the last five years.

The Nottingham-based company said it saw a ‘great’ recovery in sales in Australia, Canada and the UK, but sales were flat in the US. 

Sales at its own stores rose almost 10 per cent at constant currency, trade sales – or those to independent retailers, agents and distributors – climbed 3.4 per cent, but global online sales dipped by 0.5 per cent, in line with its expectations.

It lost around £2million in net revenues from trade sales in Russia due to the war in Ukraine, and around £1million in China due to Covid restrictions, but this was not as bad as previously forecast. 

Overall, the company admitted that strong global sales is a ‘relatively new’ trend and is proving to be a ‘reasonable challenge’.

An upgrade to its IT systems is also taking longer and costing more than it previously expected. 

Meanwhile, rising costs for materials, shipping and staff has eaten into core gross margins, which declined by 4.5 per cent to 64.1 per cent.

The company said Brexit has also added extra costs and made it harder to find staff with ‘language skills’ in the UK that can that supports its European clients. 

As a result, it has opened a new trade sales office in Barcelona, which will have a headcount of around 45 when once fully staffed. 

But all in all, chief executive Kevin Rountree said the company was ‘in great shape’.

‘Another rewarding and successful period for the global team with core sales for the six months of over £200million for the first time. 

‘We will continue to focus on making the best miniatures in the world, sign new licensing contracts with partners to exploit our IP outside of our core business and support our staff.’ 

Russ Mould, investment director at AJ Bell, said: ‘Games Workshop has an excellent proposition in a brand with a growing and extremely loyal cohort of followers, it just needs to bring its infrastructure up to speed to take full advantage.’

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