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Games Workshop announces that pre-tax profits in respect of the year to 29 May 2011 are likely to be below current market expectations.



Sales were down 4% in the first half to 28 November 2010. Difficult trading conditions since that time mean that this shortfall is unlikely to be recovered by the year end. The Group's gross margin and costs remain under firm control and cash generation remains healthy. In addition, the outlook for royalties receivable in the current year remains good, although not as significant as in the year to 30 May 2010.



The Board of Games Workshop currently believes that, as a result of reduced volumes, pre-tax profits in respect of the year ending 29 May 2011 are unlikely to meet current market consensus estimates.



The Board will announce the Group's half-yearly results for the six months to 28 November 2010 on 25 January 2011.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10754333

70 pence drop on their shares thus far today.

Can't say that the VAT hike is going to help here either, but.. a 4% drop in the current conditions isn't too bad. The weather and travel issues in the UK/Europe won't have helped either.

I saw a piece on BBC Breakfast this morning and both Next and HMV have also announced similar falls in sales.

Next are down about 6% and HMV by 14% I believe. A lot of it is being blamed on the bad weather prior to Xmas but the VAT rise isn't exactly going to help them claw back the shortfall in January.

It's just been on the news in our office that HMV saw a 15% drop and Next saw a 12% drop... so GW were actually running well ahead of some of the major high street chains in terms of profit.

Both companies are saying the weather and travel issues are major factors in this decline. As far as HMV goes, I'd say it's more to do with people becoming more internet savvy

Games Workshop announces that pre-tax profits in respect of the year to 29 May 2011 are likely to be below current market expectations.

Time to raise the prices!

In addition, the outlook for royalties receivable in the current year remains good, although not as significant as in the year to 30 May 2010.

So it's time to raise the prices!

The Board of Games Workshop currently believes that, as a result of reduced volumes, pre-tax profits in respect of the year ending 29 May 2011 are unlikely to meet current market consensus estimates.

... so we're raising the prices!

The Board will announce the Group's half-yearly results for the six months to 28 November 2010 on 25 January 2011.

Where they will vote on how much to raise the prices by.

70 pence drop on their shares thus far today.

Which the board are confident can be quickly recouped via an across-the-board price rise.

The weather and travel issues in the UK/Europe won't have helped either.

I hear that 'It's snowing' is one of the 800,000 possibly justifications for 'price rises' listed within the Games Workshop Group PLC company handbook.





Ok, I've had my fun. Kan, you can stand down from red alert.

Considering the current economic climate and the weather over the Christmas period I'm not surprised that they've not been selling as much as expected. Apparently a large number of stores were closed before Christmas because their staff couldn't get in.

Good discussion of it here:

http://www.bbc.co.uk/news/business-12117510

@inmygravenimage: Yeah, thats where I just read this information. If the snow was truly and wholly to blame, why wasn't there increased sales online to counter-balance it? It seems odd that HMV are struggling because of the internet, yet GW cannot seem to harness its potential.

CadianXV wrote:@inmygravenimage: Yeah, thats where I just read this information. If the snow was truly and wholly to blame, why wasn't there increased sales online to counter-balance it? It seems odd that HMV are struggling because of the internet, yet GW cannot seem to harness its potential.

Next did see an increase in online sales apparently, just not enough to counter-balance the downturn in high street spending. Not sure of the exact figures however.

H.B.M.C. wrote:*snip*

I lol'd.

No laughing matter Sid, it's going to happen!!

For the Dakkabrits:
"It was the wrong type of snow!"

H.B.M.C. wrote:

Games Workshop announces that pre-tax profits in respect of the year to 29 May 2011 are likely to be below current market expectations.

Time to raise the prices!

In addition, the outlook for royalties receivable in the current year remains good, although not as significant as in the year to 30 May 2010.

So it's time to raise the prices!

The Board of Games Workshop currently believes that, as a result of reduced volumes, pre-tax profits in respect of the year ending 29 May 2011 are unlikely to meet current market consensus estimates.

... so we're raising the prices!

The Board will announce the Group's half-yearly results for the six months to 28 November 2010 on 25 January 2011.

Where they will vote on how much to raise the prices by.

70 pence drop on their shares thus far today.

Which the board are confident can be quickly recouped via an across-the-board price rise.

The weather and travel issues in the UK/Europe won't have helped either.

I hear that 'It's snowing' is one of the 800,000 possibly justifications for 'price rises' listed within the Games Workshop Group PLC company handbook.





Ok, I've had my fun. Kan, you can stand down from red alert.

Hmmm subtle but I think I understand what you are getting at.

As funny as HMBC's post is, you know it's going to happen too.

HMV look to be in a bad way, but when your business is selling CDs and people are increasingly buying downloads you're in a ever shrinking market.

My concern is that Waterstones will take a hit to prop up HMV and they are the only highstreet book chain still going.

As for GW, they raise prices come rain or shine. It's all they know.

I'd like to know how badly GW Australia and New Zealand is faring.

And the size of internet sales from the US or UK to Australia are.
And how much the BIG internet retailers in UK and US are sending to us down here.

I'd like to know all this because as of 2 days ago I saved 44% by buying from a UK internet retailer (no postage cost) rather than driving the 5km to my local GW store.

@Fafnir/HMBC: It happened yesterday.

Howard A Treesong wrote:HMV look to be in a bad way, but when your business is selling CDs and people are increasingly buying downloads you're in a ever shrinking market.

My concern is that Waterstones will take a hit to prop up HMV and they are the only highstreet book chain still going.

As for GW, they raise prices come rain or shine. It's all they know.

I think even Waterstones will start feeling the pinch (If they haven't already). As an example, the wife and I were browsing in there the other day and were looking at a couple of paperbacks each priced at £7.99

I can buy those same paperbacks, new, from Amazon, for £4 delivered, the only caveat being I have to wait a few days extra. I just don't see how Waterstones can continue to compete effectively while having to factor in bricks and mortar stores in a way that Amazon doesn't. Even Watersones' best sale prices can't match Amazon.


Automatically Appended Next Post:

Waaagh_Gonads wrote:I'd like to know how badly GW Australia and New Zealand is faring.

And the size of internet sales from the US or UK to Australia are.
And how much the BIG internet retailers in UK and US are sending to us down here.

I'd like to know all this because as of 2 days ago I saved 44% by buying from a UK internet retailer (no postage cost) rather than driving the 5km to my local GW store.

I have to say, personally speaking, I find the whole Oz/NZ situation laughable really. I just don't see a) why GW insist on pricing stuff like that and b) how those same GW stores can continue to operate at a profit given the huge savings you can make by ordering online there.

You mean GW sales and customer numbers dropped? Has it happened before?
And why didn't GW's massive marketing and advertising campaign (you know, sueing fan-websites and aftermarket ) did't help with sales?

BlackSparkle wrote:@Fafnir/HMBC: It happened yesterday.

Nononono, that was the OTHER price increase.

Howard A Treesong wrote:HMV look to be in a bad way, but when your business is selling CDs and people are increasingly buying downloads you're in a ever shrinking market.

My concern is that Waterstones will take a hit to prop up HMV and they are the only highstreet book chain still going.

As for GW, they raise prices come rain or shine. It's all they know.

I remember reading that Waterstones, is increasingly showing fewer and fewer profits, and HMV are propping that aspect up, not sure if it's turned around recently, but Waterstones and most highstreet booksellers are suffering as much as CD/DVD sellers are.

It's gonna be pretty hard for them to blame the snow for the 4% sales drop during the SUMMER =/

This could be bad news for WHFB fans. The sales were down during the big 8th edition push. Is it possible this might mean reduced support? 40k has always been the big cash cow, after all.

It could also be why the rumours say Grey Knights are being pushed back (into the next financial year) in favour of another wave of Dark Eldar. We know DE sold like hotcakes. Releasing the next wave sooner is a safer bet than a niche army like Grey Knights (even if they are marines). Additionally grey knight armies are small, which makes them even less likely as money spinners.

Just a few thoughts

Given the price rises last June which impacted for the full 6 months of this report, that 4% drop in turnover probably translates to something like an 8% or 9% fall in business in real terms. That's huge. Particularly when they launched 8th edition in the summer (Damp squib? Much?). Dark Eldar may recover some ground for them in December but probably not enough, or so they seem to believe.

The share price fall has a lot to do with the fact that all of the last 2 year's "growth" had been down to exchange rate movements and licence fees masking the underlying trends of falling model sales. Something that investors would have spotted had they read the financial results for themselves rather than acting like a bunch of blind lemmings based on pundits skim-reading the summary baloney produced by the company directors.


Automatically Appended Next Post:

Leggy wrote:We know DE sold like hotcakes.

Do we? There's anecdotal evidence from a few stores that they have sold well in a few places to those fanboys who were desperately waiting for them, but I haven't seen anything to say that they have been stunning overall, compared to any other army release. In any case, they were a November/December release in the stores, so their impact on the Q1-2 figures will be minimal.

Osbad wrote:Given the price rises last June which impacted for the full 6 months of this report, that 4% drop in turnover probably translates to something like an 8% or 9% fall in business in real terms. That's huge. Particularly when they launched 8th edition in the summer (Damp squib? Much?). Dark Eldar may recover some ground for them in December but probably not enough, or so they seem to believe.

The share price fall has a lot to do with the fact that all of the last 2 year's "growth" had been down to exchange rate movements and licence fees masking the underlying trends of falling model sales. Something that investors would have spotted had they read the financial results for themselves rather than acting like a bunch of blind lemmings based on pundits skim-reading the summary baloney produced by the company directors.

I wonder then if we might not be approaching a watershed moment when GW realise that perhaps raising prices continually is doing them more harm than good?

filbert wrote:I wonder then if we might not be approaching a watershed moment when GW realise that perhaps raising prices continually is doing them more harm than good?

Judging from the fact that they just passed on a (rounded up) VAT rise in their UK stores yesterday, I'm not holding my breath.

Osbad wrote:

filbert wrote:I wonder then if we might not be approaching a watershed moment when GW realise that perhaps raising prices continually is doing them more harm than good?

Judging from the fact that they just passed on a (rounded up) VAT rise in their UK stores yesterday, I'm not holding my breath.

Me neither but you never know....

Can't really blame them for the VAT rise - I don't suppose there will be many businesses prepared to not pass on the rise (although some have mentioned they are deferring it for a few months).

I've been wondering for quite some time where GW's price breaking point was going to be. According to these numbers, I think we're seeing it.

I'm also calling BS on the play with that tripe from GW. The numbers seriously do not add up. Close stores... raise prices... make money... then claim that its a win? Anyone else seeing the pattern here?

I see HMV is shutting 60 stores, looks like Christmas retail drops maybe about to claim another big victim. Woolies and Zaavi last year, HMV could be next.

I'd be gutted if Waterstones went, WHSmith really isn't a good alternative in my mind, and apart from the rare independent bookstore, I think thats about it if Waterstones does fall.


Regarding GW, I assume this will lead to price rises of some kind as most of us do. As long as the kiddies keep buying from stores, I don't think GW can smell the coffee.

I'd imagine thats whats happening in Aus/NZ as well. Kids and parents still go to stores in numbers that GW branch there isn't noticing enough, or no more than a typical sales slump in a bad financial climate anyways.

On a side note, 44% blinkin eck, thats a hugely impressive saving.

Well I guess this is proof that Chapterhouse is actually costing GW sales....

Osbad wrote:
Judging from the fact that they just passed on a (rounded up) VAT rise in their UK stores yesterday, I'm not holding my breath.

Quelle surprise.

I'll expect your public apology soon then nosferatu1001?

Everything is being blamed on the snow, no suprise for us brit's. My local GW ran out of loads of stock over christmas and could not get any deliveries till after the christmas break, these shoppers will not have gone to the internet because those 'gifts' would not arrive either! So instead of buying £30 worth of GW stock they went else ware and bought a video game or somehting, anything that was actually in stock!

Got to agree that a 4% drop in sales in the uk in the current economic climate is not bad at all! sales here are dropping, my christmas budget was half what it was last year due to various things, but the point of the matter is people have less money to spend.

With HMV, next etc that shows the real extent of the decline in sales in the uk. in comparrison a niche like GW only dropping 4% is pretty good.

Sales are down??? Wow there is a surprise considering GW decided to wait 7 months between 40k releases and never produced a single book for the new edition of fantasy to take advantage of the momentum