Games Workshop just released it’s 2014 half year report today, has the new CEO reversed their downward slide?
From a layman’s perspective nothing appears to have changed much honestly. Sales are still down, ROI is down, White Dwarf sales are down, and they seem to blame everything on North American and ‘Continental’ Europe.
The thing I saw that was ‘new’ to this type of report was the admittance of a drop of sales in White Dwarf, because I thought the whole idea was to sell them weekly to generate more sales, and drive traffic to stores.
Also curious was the wording ‘declines in nonstrategic
accounts’ which seems to indicate a larger loss of Independent Partner Level Stores, as in these flagship non-Games Workshop stores have just stopped selling their products altogether?
However all that being said (continued losses, etc.) the new CEO “remains confident in the future growth and profitability of the Group.”
Game Workshop’s 6mos Report
Here’s what stuck out to me;
Use of capital
Core business return on average capital employed** declined in the period to 38.3% (2013: 45.5%).
Sales fell by 6.6% to £56.5 million. The net exchange rate impact of the stronger pound was £2.1
million and, on a constant currency basis, sales were down by 1.7%. We now report our sales by
channel; our own stores: ‘Retail’; our trading partners: ‘Trade’; and our online shop: ‘Mail Order’.
This channel showed growth in the UK offset by declines in North America and Continental Europe
attributable mainly to the extensive restructuring that took place over the last year.
This channel showed growth in North America, Australia and the UK, offset by larger declines in nonstrategic
accounts and magazine sales. The net effect was a decline of 5.1% (£1.2 million).
Kevin Rountree, CEO of Games Workshop, said:
“Games Workshop’s core business model remains strong. Our current initiatives of ever better weekly
new product releases, the low cost one man stores in retail and the stockist programme in trade, are
designed to lead to growth. The board remains confident in the future growth and profitability of the