Games Workshop stocks tumble as they give £2,500 to every employee amid slower sales and lower profits from licensing.
The 10th Edition really helped GW through the second quarter of 2023, but things have started to slow with the delayed releases (and the very noticeable lack of products).
However, they paid out huge bonuses and are still on an upward trend compared to last year, just not nearly as fast as it seems.
When looking at their numbers from their last trading update in September of 2023, things are still moving upward, but considering this includes the release of 10th edition, we would have expected possibly higher numbers through the holidays, and it seems investors did as well.
Let’s look at the last report’s numbers and then jump into the highlights of the new report.
GW Pays Shareholders $20 Million as Warhammer Profits Surge: (September 2023)
With 10th Edition Warhammer 40k here, a Henry Cavill project on the horizon, and tons of licensing deals, GW saw record profits throughout the first quarter of this year. They reported from June to August (summer 2023), and they had a profit before tax of around $70 million.
Ahead of the Company’s AGM next week, Games Workshop Group PLC announces today that trading for the three months to 27 August 2023 was ahead of the Board’s expectations for the quarter with core revenue of c.£121 million (2022/23: £106 million) and licensing revenue of c.£6 million (2022/23: £3 million). Profit before tax is estimated at c.£57 million (2022/23: £39 million). This has been driven by healthy growth across all channels.
This is “ahead of their expectations,” and shareholders are getting quite the payout. There have been a ton of things in the works for GW, and it seems like they are capitalizing on it all quite well.
Here are some highlights:
- Profit before tax is estimated to be not less than £170 million, which is up about 14 million from last year.
- Core revenue to be not less than £440 million, which is up about 60 million.
- Licensing income of £25 million is down by about 3 million from last year, which is interesting as this seemed to keep profits afloat last year.
- Profit share cash payments (to employees) are up by about 1 million, amounting in total to £11 million.
- Dividends per share went up by an insane amount, almost doubling.
- Dividends declared and paid in the year were £136 million.
- They gave numbers for Warhammer+ for year 2, and the number of subscribers has only gone up around 20,000.
- Taking into account bonuses of £11m, and a payout of around £136m in dividends, they still retained over £30m which is just about half of their overall profit from last year’s financials.
GW Stocks Tumble As They Pay Out £2,500 To Every Employee
On their Investor page, GW has announced a substantial £2,500 Christmas bonus for shop workers, model makers, designers, and support staff – an increase of £1,000 from the previous year.
This expanded its Christmas bonus pool to £7.5 million, which is up from £4.5 million in the previous year.
The move could be due to the fact that a lot of key staff (notably artists) have left the company this year. It could very well be a way to increase retention.
Games Workshop noted a 12% increase in half-year profits and anticipates profits to reach at least £94 million, backed by a 9% increase in sales, totaling £247 million.
Despite a dip in licensing income (£11 million, down from £12.9 million), they are still doing well. However, their licensing deals have been on the downturn all year, and even in the previous report, they also lost licensing income, meaning we might keep seeing this trend.
While experiencing some growth, Games Workshop faced a slowdown in the second quarter of their financial year, following a strong first quarter boosted by the launch of the 10th edition of Warhammer 40k. Analysts noted a pull-forward of demand during the summer, leading to tougher trading conditions.
GW Stocks Tumble As They Pay Out £2,500 To Every Employee
The company’s shares experienced a nearly 11% dip to just under £95, with some investors expressing disappointment that sales and profits were in line with expectations. This is also probably some compensation for the insane prices last year when Cavill came on board with Amazon.
They are still going pretty strong despite the slowdown, but the investors don’t seem to agree entirely, as an 11% dip in stock is quite large.
Will Games Workshop Keep Growing?
Most signs still seem to point to yes.
At this point, with 10th Edition Warhammer 40k here and so many new faction codexes on the horizon, we don’t see things slowing down too crazily for the company any time soon.
However, they need to get more products out there and help build back consumer confidence. Stores have been hampered recently, and it seems people are losing some interest over the fact they cannot get what they need!
So, there is plenty to go for 10th edition Warhammer 40k, but GW needs to handle it better and get minis out on the shelves.
What are your thoughts on investors losing some faith in Games Workshop?
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About the Author: Travis Pasch
Travis Pasch
Job Title: Head Writer & Editor
Socials: @paschbass
About Travis Pasch: Travis has been a Warhammer 40k hobbyist since the 1990s, playing the game since Third Edition. Through extensive traveling, he’s seen a lot of the miniatures hobby from across the world, giving him a unique perspective on the latest gaming topics and trends.
Travis’s brother even owns a commission painting studio, where he’s picked up a lot of good advice and techniques for painting Warhammer and tabletop miniatures over the years, as well. Travis joined the Spikey Bits team in 2019 and has been the lead writer since 2020.
Currently, he’s working on converting all his 40k Adeptus Mechanicus models and becoming a true tech enjoyer, complete with both sad and happy robot noises!
