Games Workshop: Warhammer-maker’s shares boom on positive outlook
FTSE 250 firm Games Workshop’s shares soared after the open this morning, following a positive trading update.
The Warhammer-maker’s stock rose by almost 14 per cent in early trades, after a rosy outlook in a brief statement to markets this morning.
The company said it was “pleased to announce” that since late September when it last published an update, it was “ahead of expectations.”
Games Workshop said “the Board’s estimate of the results for the six months to 1 December 2024, at actual rates, is core revenue of not less than £260m, compared to £235.6m, in 2022/23.
It added that it also expected “licensing revenue of not less than £30m”, compared to the 2023/24 figure of £13m, while its profit before tax “is estimated to be not less than £120 million, compared to £96.1m.
This comes after Games Workshop suffered a major shareholder revolt after handing millions in bonuses to its top bosses.
Back in September, when it published its last trading update, the Nottingham-headquartered company saw almost 21 per cent vote against its remuneration report and nearly 27 per cent vote against its remuneration policy at its AGM.
In July, its leaders heralded “exciting times” with its best ever results.
The firm’s shares have grown by 37.11 per cent in the last six months, and 23 per cent in the year to date.
“Significant untapped potential”
AJ Bell investment director Russ Mould said: “Shares in fantasy miniatures outfit Games Workshop traded at record highs as the company revealed trading is running notably ahead of expectations for the first half of its financial year.
“A key feature of the strong numbers is a big uplift in licensing revenue – driven by sales of the Space Marine 2 video game – and before the company announces its half-year results in full in mid-January there may be news on its tie-up with Amazon. The agreement, to create a Warhammer 40K film and TV series, is close to a self-imposed deadline of 31 December to agree ‘creative guidelines’.
“The beauty of licensing income is it comes with negligible extra cost for the company and therefore is highly profitable.
“Games Workshop looks to have significant untapped potential in its intellectual property and fantasy worlds. Globally, it has only just begun to explore market opportunities.
“Having staff passionate about games, painting and collecting miniatures is a bonus for its store network. Rather than simply being run by people who just show up to work and perform tasks as requested, the stores are manned by individuals as keen about the subject matter as the customers. That enthusiasm can be infectious and keeps customers loyal and the tills ringing.
“Being vertically integrated, Games Workshop controls everything from design to sales, allowing efficient cost optimisation and pricing control. It continues to be a unique business on the UK market and that has helped it attract a premium valuation.”