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GW Half-Year Report out, everything's up, BBC reports


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#1
N1SB

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Hi Fraters,
 
Games Workshop has released its Half-Year financial report.  Everything's up.  Profitability is up so much I gotta take a closer look.
 
I'll reply later once I actually read instead of skim the whole thing, but 1 thing I picked up on immediately (aside from insane growth in profitability for something that's not a tech company...or maybe I should re-think GW and consider it one) is they're continuing to invest in capital projects, ergo they're building facilities like their miniatures factory (the sum makes me think of it as an expansion, not just replacing old stuff though that is part of it), ergo...and this is the most important thing...GW is still working like it's aiming/planning/expecting to grow.
 
So let me give you the skinny.  GW published its report here and, as soon as you get past the 1st and a half page, the CEO Kevin Rountree actually tells you what's up with GW right now in Human Lingo (I know we who've spent time in finance in particular speak in binharic cant sometimes): https://investor.gam...year-report.pdf
 
Now BBC is also doing some reporting, positioning this news under a broader theme of indoor hobbies: https://www.bbc.com/...siness-55629984
 
There, the CEO has a message for everyone here and elsewhere in the Warhammer Hobby:
 

I'd like to thank our enthusiastic and loyal fan base who share our love for the Warhammer hobby and the fantastical settings, characters and narratives that make up our intellectual property.


Anyway, just letting you guys know. This reminds me of something...I'm trying to remember what. I'll tell you when I remember.
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#2
Sete

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And yet, no Black Templars (for now xD).
I gotta write this, it's a tradition already.

On topic, good news for us (hobbyists) in general.
I assume this infrastructure expansion will allow a more diverse set of projects to me made, and that's exciting.

Edited by Sete, 13 January 2021 - 10:20 AM.

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#3
Brother Adelard

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This is interesting:

 

"Our ‘old’ finished goods warehouse in Nottingham is planned to be reconfigured as an on-site component warehouse and offer us some space to support production of paint and resin miniatures."

Maybe we'll see a return to the old days of being able to purchase individual bits from the Trolls?


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#4
Xenith

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Order of magnitude more sales, 30% increase in production despite new factory not fully online, sold out of more items than they like.

 

Things are looking good for GW!

 

And yet, no Black Templars (for now xD).

 

And this is essentially 'Primaris only' gains, before they've even touched other ranges that people love. I'd imagine another 10% spike with a BT codex, and another jump when they get to the craftworld range, just as we seen when they redid Chaos in 2019.


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#5
Sete

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Craftworlds are long overdue with Imperial Guard.

I think a 10% spike with BT might be a bit too optimistic, really depends on what will be released, if the rumours are true I might add.

Edited by Sete, 13 January 2021 - 10:45 AM.


#6
Joe

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Sad to hear that Eisenhorn is behind schedule, but understandable given present circumstances.


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#7
Halandaar

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This is interesting:

 

"Our ‘old’ finished goods warehouse in Nottingham is planned to be reconfigured as an on-site component warehouse and offer us some space to support production of paint and resin miniatures."

Maybe we'll see a return to the old days of being able to purchase individual bits from the Trolls?

 

I don't think so; from context elsewhere in the report, I think "components" means things that get produced externally (boxes, paintbrushes, dice etc), rather than literal bits off of sprues. This is from page 4:

 

 

We’ve had a few teething issues bringing components stock back in-house all of which will be resolved soon.


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#8
Lord Marshal

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Not much of a surprise. A new edition of 40k and many countries being in and out of lockdown. Plus I imagine the core of GW's audience are well-paid IT guys who've had a lot more hours in the day spared by working from home.


Edited by Lord Marshal, 13 January 2021 - 11:21 AM.

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#9
Marshal Loss

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Imagine how great their sales will be when EC come out nudge nudge blush.png biggrin.png 


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#10
Joe

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Given the reasonable chance this year will see a new AoS edition I wouldn't be surprised if we saw another substantial jump in sales. That said, their factory output is already phenomenal - I'll be curious to see what the next figure winds up as.


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#11
Dark Shepherd

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Would depend on the exact breakdown but if sales are up 26% and profits are up 33% then that points to a significant increase in margin/profits per sale. It cant all be from savings on lightbulbs for shuttered stores

Moving ALL the production in house is interesting

As is 4.7 million unique visitors to warcom

#12
BladeOfVengeance

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Would depend on the exact breakdown but if sales are up 26% and profits are up 33% then that points to a significant increase in margin/profits per sale. It cant all be from savings on lightbulbs for shuttered stores

Moving ALL the production in house is interesting

As is 4.7 million unique visitors to warcom

As they grow in magnitude so does their buying power, a few % is a reasonable gain, it could also be from there online sales, BL, Audible, Codex’s etc

I think moving all In house is wise in the current climate (Brexit and CV19) they have far better control of production as we know they're been hampered last year

Either way great news for the game we all love as it’s thriving and isn’t going anywhere soon

Edited by BladeOfVengeance, 13 January 2021 - 12:09 PM.


#13
MechaMan

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Very pleased for them! I'm trying to figure out what would have been a better investment, the pewter Vostroyans I bought, or some GW shares. They've both doubled in value within the space of four years! 

 

I do sometimes think Forge World is a better investment than gold, given the resale prices on eBay when things go OOP


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#14
GreenScorpion

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Given these 6 months included the (not so) limited Indomitus release, lots of space marine releases and the necron stuff, it is not surprising to see their sales rise, especially when the prices of boxes are also on the rise.

With the factory struggling to keep up with demand, it is clear sales should keep rising at least for some more time.
No rising trend is eternal though and sooner or later the numbers should stabilize or even drop slightly.



#15
Karhedron

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Would depend on the exact breakdown but if sales are up 26% and profits are up 33% then that points to a significant increase in margin/profits per sale. It cant all be from savings on lightbulbs for shuttered stores


Several thoughts spring to mind. If sales of each kit go up then so does the profitability since the costs of developing the kit and cutting the molds are spread over more unit sales. A good example of this would be Indomitus. The second run would have been far more profitable than the first since they were selling for the same price but had already paid for the R&D and tooling costs with the first run.

Some of their costs are linked to the price of oil. The raw plastic they use is oil-based but more importantly, their distribution costs are dictated by the price of diesel and petrol. With oil prices comparatively low, this makes raw plastic cheaper to buy and finished kits cheaper to ship.

There may be other factors too that I have not thought of.
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#16
theSpirea

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I'm still waiting to see how Brexit is going to impact customers ordering directly from GW (I'm mainly curious about BL products). As of now, if I order GW products from LGS located in the UK and have it shipped to the EU, and the order is over 22 EUR, I have to pay import tax (15%-21%, depends on the country). I haven't ordered anything from GW this year yet so not sure how it works with them and their statement on their Community site is quite vague.



#17
Dark Shepherd

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I was going with price increases 😆

Profits have grown 27% more than sales. Profitability of new kits has to be a factor. Edit: gross margin is up 6% due to increased volume

Huh...

Reading full report...
royalties dropped almost 20%
PROFITS BY CURRENCY WENT UP £1.2 million*

Cost to sale has DROPPED from 36% to 28%; theres more on this but theyre boasting about margins

Not to labour a point but they really, really cant justify any more price increases
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#18
GreenScorpion

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I was going with price increases

Profits have grown 27% more than sales. Profitability of new kits has to be a factor. Edit: gross margin is up 6% due to increased volume

Huh...

Reading full report...
royalties dropped almost 20%
PROFITS BY CURRENCY WENT UP £1.2 million*

Cost to sale has DROPPED from 36% to 28%; theres more on this but theyre boasting about margins

Not to labour a point but they really, really cant justify any more price increases

It is likely because of "sneaky" price increases like the catachan defence force one:
 

price increases

 

I guess we might know what will come in the IG Combat Patrol box...


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#19
matcap86

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I'm still waiting to see how Brexit is going to impact customers ordering directly from GW (I'm mainly curious about BL products). As of now, if I order GW products from LGS located in the UK and have it shipped to the EU, and the order is over 22 EUR, I have to pay import tax (15%-21%, depends on the country). I haven't ordered anything from GW this year yet so not sure how it works with them and their statement on their Community site is quite vague.

 

I was wondering this as well, so I looked into it a bit more. This is their current info on the webstore, emphasis mine:

 

EU Shipments
For goods sent to the EU, Value Added Tax (VAT) will be added to the tax exclusive price of the goods in accordance with the rates that apply for each EU country. Games Workshop is registered in some EU countries in which the local rates will apply, whereas in all other EU countries German VAT will be charged on the transaction.
 
Please also see the section below regarding sales of digital products, which are dealt with differently.
 
It is possible that your order will be subject to import duties and taxes as the products cross the border into the EU. Games Workshop will deliver under shipping terms delivery duty paid which means that such import costs will be our responsibility.
 
_________________________________________________________

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#20
Marshal Loss

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Not to labour a point but they really, really cant justify any more price increases

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#21
Skywrath

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Good to see their greed is paying off.


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#22
Dark Shepherd

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Not to labour a point but they really, really cant justify any more price increases

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Haha
Yeah the current tier of pricing has yet to be rounded out/finished off

For online shopping I think the short version is GW will eat import charges if you buy direct but a FLGS will have to pass vat/duty etc on to you...which could see more buying directly from GW, and in Euros, so wahey more profit

#23
Son of Carnelian

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As always, N1SB, your expertise and insights remain invaluable. I would not even know about the financial report if you had not posted about it.
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#24
Dosjetka

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I'm glad GW are doing well, I just regret that it's at least partially due to price increases.

 

Still, I look forward to your analysis, N1SB. :tu:


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#25
Sandlemad

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Bringing the non-mini 'components' in-house isn't a surprise, supply of stuff like boxes and assorted cardboard gubbins (maybe some printing as well?) seems to have been an issue a few times. It's the kind of thing GW has probably wanted tighter control of for a long time but covid made it a more pressing issue.






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