FinancialGames Workshop Group
Half-Yearly Report: Six months to 2 December 2018
1 Jan 201915 pages~41 min full read
Games Workshop achieved record financial performance for the six months ending December 2, 2018, with revenue increasing 14.3% to £125.2 million and pre-tax profit rising to £40.8 million.
The trade channel was the primary growth driver, surging 26% to £61.4 million, while the retail segment contributed £42.5 million and online sales remained flat.
Basic earnings per share reached 100.8p, enabling the company to distribute £21.0 million in dividends to shareholders at 65 pence per share.
Operational cash flow decreased to £36.0 million as the company increased investment in working capital and inventory, with net inventory provisions more than doubling to £3.4 million.
The company is investing nearly £3 million in infrastructure projects, including a new Nottingham factory and a UK-wide ERP system, to address supply chain capacity constraints.
Engagement with the Warhammer Community platform grew by 30% during the period, supporting the company's strategy to capitalize on global demand for its core hobby products.
Games Workshop achieved record financial performance during the six months ending December 2, 2018, characterized by a 14.3% increase in revenue to £125.2 million and a rise in pre-tax profit to £40.8 million. This growth was primarily propelled by the trade channel, which surged 26% to reach £61.4 million, and a significant 30% increase in engagement through the Warhammer Community platform. While the retail segment also contributed £42.5 million to the total, online sales remained flat, and the product and supply divisions faced profit declines. Basic earnings per share rose to 100.8p, supporting the distribution of £21.0 million in dividends to shareholders at 65 pence per share.
The financial landscape was influenced by the retrospective adoption of IFRS 15 and IFRS 9 accounting standards, which necessitated adjustments to revenue recognition for royalty guarantees and delivery charges. Despite record profits, cash generated from operations decreased to £36.0 million as the group increased investment in working capital and inventory. Net inventory provisions more than doubled to £3.4 million, reflecting a strategic shift toward managing capacity constraints. The group maintained a robust balance sheet with net assets of £101.6 million and confirmed its status as a going concern with sufficient resources for the foreseeable future.
Operational focus during this period centered on large-scale infrastructure projects designed to sustain long-term growth. These initiatives include the construction of a new factory in Nottingham and the implementation of a comprehensive UK-wide ERP system. These capital commitments, totaling nearly £3 million, aim to optimize supply chain efficiency and address the physical limitations of current production facilities. By prioritizing these structural improvements alongside a strong trade performance, the group seeks to mitigate capacity risks and capitalize on the expanding global demand for its core hobby products.
