GAW GamesWorkshop breaks out YET again and Ive lost count this year how many times it says its going to beat expectations. Stock trades on P/E rating of 16.2 to 2018 and forecast EPS increase is a walloping 61.3%. They report again on 9th JAN. Certainly worth a punt up to TS.
GAW Games Workshop, looks technically in a strong position to break through the down trend channel and go on to hit the last high very soon. Increased volume and a positive MACD Oscillator back this up.
<b><i>Games Workshop has delivered a very impressive H1 with EBIT of £38m matching last years full year. We are not changing our outlook for the current year, but the company is well on track to deliver on our FY forecast of £65m ahead of the important Christmas period.
It is encouraging that the growth has been seen in all regions and all channels, with H1 sales +54% to £109m. Importantly the sales trend has been maintained since the 40K launch in the summer. Although it is sensible to assume the current elevated sales trend does not continue, the increase in sales of starter sets bodes well for future periods.
The profit performance will have translated into a healthy cash position. The company will step up investment in the business by c£7m in order to expand capacity. Nonetheless there will still be significant excess capital to return to shareholders. We are currently forecasting a full year dividend of 120p (6% yield) and year end net cash of £20m. H1 profits will be announced on 9 January 2018.</i></b>
GAW GamesWorkshop... in the first six months of 2017/18 and an operating profit of c. £38 million for the period. Last year at same stage ..Preliminary estimates indicate an operating profit of c.£13 million for the period.
Thanks for the Q&A session in this article Richard. I have been keeping an eye on this company for some time and admired the ROCE but could never get myself to buy the shares as I couldn't believe they could continue to make so much money from what they do. If you want to know what made me re-assess and buy the shares about six months ago, it was the continuing stream of royalties which I guess must go straight to the bottom line. This also underlined to me the value being generated by the company. I noticed on the TV that computer gaming is now becoming a sport, complete with spectators (weird!). I also read some of the enthusiast boards about wargaming and it is clear that many adults are quite passionate about this and spend accordingly. As you implied in your article, you probably love or hate the management (no, I doubt that I could work there either) but my impression is that they are quite conservative and take a long term view in formulating strategy, which I like so I am happy to hold the shares and will probably retain them indefinitely assuming no fundamental change in the business.
"Egg on your face Richard?Egg?Yes, egg. A couple of years ago you laid into Games Workshop. You said either you were mad or Games Workshop was delusional. Yet in the year to May 2017 the company has increased revenue 21% at constant exchange rates ..."
may be I am getting tired
how does iii get divi under fundammentals as 3.2%
using last full year compared to closing price gives approx 6.4%
please advise for my future ref.....maybe I use wrong figures and need correcting
a fairly unique situation of a 100% UK manufacturer with 75% export sales, limited overseas cost base. Surprised Richard Beddard's article didn't mention this rather large factoid. Moreover we now have organic growth so no wander the dividend has been raised 25% y/y.
As a father of a son who is a GW hobbyist i have an insight into the business and the nature of its (UK) customer base. I agree its not for everyone in fact its very niche but it has a unique customer proposition (no direct competition) which is enjoyed and profitable in multiple large overseas markets.
I actually like the focus of the Chairman and Board on it shareholders and the refreshingly straightforward language around corporate governance. Frankly i don't give a toss whether there are women on the Board and not just because i have never seen a girl or woman play this game at least in our local shop. All i want is good, aligned management which i think is what we get with GAW.
As you say Richard you should have ignored your slightly wet side which seemed quite personally offended for some reason, seen more clearly the elephant in the room (£ devaluation) and backed your business analysis which obviously is in tune with the many attractions of GW. Must admit as a recent (post Brexit) addition to the shareholder register, i am not scarred like you by holding this during a couple of more difficult years. Its not too late though, as even 20% higher since your article its still looking cheap in terms of its multiple of equity FCF which is feeding strongly into dividend income. At a time when profit warnings are hammering over-priced mid cap me-too often correlated stocks what else could one ask for?
"It only takes half an hour to roll your-own algorithm for investment success - though implementing it might take a little longer.Common sense algorithms are better at making decisions in noisy environments - like the stockmarket - than expert ..."
"I've delayed writing this article after reading LSE:GAW:Games Workshop's annual report, but I still haven't calmed down. The act of typing is riling me up again.As an investor and as a journalist, I try to be objective. While objectivity isn't ..."
"Games Workshop is casting itself as a relentless profit making machine. Customers, staff, and investors who donât like it better get out of the way. On Tuesday, the day before Games Workshopâs annual general meeting, my twelve year old son burst ..."
Having held GAW for a few years, I've decided to get out now, following their latest Warhammer revamp. There's a lot on negative buzz amongst the hobbyists and more of my friends seem to be leaving GAW for other systems. Mantic seem to be doing well and a lot of the other minor players seem to me to be gaining support.
It's been a good ride and I'm out with a healthy profit overall (despite topping up at near £8!!), but there's other opportunities that look cheap to me at the moment, with more predictable dividend payments.
"Without shops, a high street retailer has no business. Without planes, an airline canât fly. Whether the company leases the assets or takes out a loan to buy them, the risks are similar, but the accounting can paint a very different picture. ..."
Yeah - not much to go on. First half year results were broadly similar to the previous year - significantly impacted by a strong pound. The pound has weakened against the dollar - which should be a good thing for US revenues, however the recent Euro devaluation will impact GW as Europe is their biggest region. I'm not expecting anything spectacular, but I would hope that the second half year results would exceed the first half year, given that it includes the Christmas boost.
Let's assume that EPS for the year exceeds 30p - which I think is a reasonable expectation and given most spare cash is returned to share holders as dividend, then I'm placing the anticipated yield for this share at about 6%. I think that makes this a buy at the 500p level.
Have been watching this stock since the last dip in Feb, since then price has again dropped though not to that level, and the dividend has been axed.. still a good buy? The new business model hasnt had much press and there hasnt been any real news on the divi - had the SP stayed aroun 800 with a 50p dividend then great,.. though I still think its a good buy at this price assuming it holds and the dividend returns.
"Fantasy wargaming company Games Workshop must tread the delicate line between generating a satisfying return for its shareholders and gouging its customers.Having run Games Workshop through the checklist, it still qualifies, albeit uncomfortably, ..."
"Two things are concerning about the rhetoric in Games Workshopâs annual report for the year ending June 2014. Tom Kirby, the longstanding guardian of the fantasy wargaming hobby is as florid and zealous as usual, but he also comes across a little ..."
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.