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http://www.iii.co.uk/research/LSE:GAW/news/item/1347707

No real surprises. They sold less than they did in the equivalent period last year so turnover and profit are down, exacerbated by a stong pound meaning overseas sales are worth less than they were last year. Also they blame restructuring (still!) and the rebuilding of Warhammer World. Anything but reducing demand really. .. *rolls eyes*

Huh. Sales in the new online shop were broadly comparable to last year. I guess the £4m makeover helped stave off decline in that sector.

Good for them.

 Riquende wrote:
Huh. Sales in the new online shop were broadly comparable to last year. I guess the £4m makeover helped stave off decline in that sector.

Good for them.

Any company that is spending £4m to simply NOT lose sales for a year instead of growing is in some serious trouble. No one wants to invest in a company only to see it stagnant.

At the end of it all, I don't see where the money went. The new website is crap and is ONLY a sales tool anymore. The resources for hobby material there are at best shadows of former glory such as Black Gobbo. And the kind of money they spent on it(at least in my eyes) is not equal to the kind of money they bring in. They basically spent £4m trying to reinvent the online shopping cart. The new filters are annoying, the product descriptions are often misleading for dual purpose kits, and overall it just feels like a webstore instead of a Warhammer site.

GW's crap makes me wish they'd take on the nearly outdated practice of not selling direct and only selling through distributors. It gives those distributors more incentive to push their product.

I'd compare them against another market I'm familiar with: drums. Drums Workshop is one of the largest names in drumming. They weren't always. They make arguably the best products in their market. They refuse to sell directly, and always send pricing requests to local dealers. Sure, they could sell direct and cut out the middle man, but then they'd have a nightmare in support to deal with, and would have shipping nightmares galore.

GW should never have opened corporate stores. They should all be franchises at best. That puts the store in the hands of an owner whose ass is on the line, and that owner would push support locally to keep the store floating. The stores have been losing GW money for years now. Hell just look at the New England market and how many stores have opened/closed there in the last 15 years.

GW got greedy, and for a while that was ok. Now, the competition is too steep, and independent retailers have all lost faith in the company to the point of many of them dropping their lines altogether.

Down £4m in revenue compared to the autumn 2013 disaster? Great news!

GW started as a company of "corporate stores". They were originally a general wargames/RPG retailer, got into manufacturing and publishing, first with licensed products, then their own designs, then gradually phased out everything except their own designs, then phased out everything except Warhammer (40K).

I don't think it is a set of results that argues for a death spiral. I do think they are having to work a lot harder to keep sales at roughly the same level. (More kits, more books and so on.)

Personally I am glad they spent money updating Warhammer World, considering its the main store and it will supposedly be hosting bigger events.
It just looked liked a factory shop entrance before, it looked pretty ordinary when you turned up outside.

 Rayvon wrote:
Personally I am glad they spent money updating Warhammer World, considering its the main store and it will supposedly be hosting bigger events.
It just looked liked a factory shop entrance before, it looked pretty ordinary when you turned up outside.

This is a good point. Bearing in mind the work they did on the games hall (very nice)and Bugman's bar and the model displays they have, a nondescript door and a dark staircase to get to the goodies was a bit odd.

Of course they are probably also installing an entrance ticket office and pay as you go turnstiles on the toilets.....

Removed by insaniak. This adds nothing productive to the discussion.

To be fair, no company would ever publicly say that public demand has decreased.

 Sigvatr wrote:
To be fair, no company would ever publicly say that public demand has decreased.

No, most reasonable companies would notice that and do market research to figure out why. Long before it would be at the point they should mention it.

GW, however, literally refuses to do market research so ... yeah.

 Sigvatr wrote:
To be fair, no company would ever publicly say that public demand has decreased.

They dont have to, if they increase their unit price and your reveneue remain flat, there is only one answer.

rigeld2 wrote:

 Sigvatr wrote:
To be fair, no company would ever publicly say that public demand has decreased.

No, most reasonable companies would notice that and do market research to figure out why. Long before it would be at the point they should mention it.

GW, however, literally refuses to do market research so ... yeah.

Hell - Kirby boasts of his willful ignorance.

And that is something that it doesn't require an expert, internet or otherwise, to point out as a grand example of hubris.

Knowing your market is the beginning of finding out what you are doing wrong.

Unless that is too otiose.

The Auld Grump

I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

It's not looking good. How do you release so many new products in a year at exorbitant prices and still lose that much revenue? The exchange rate doesn't even come close to accounting for this kind of drop in revenue and profits. Of course GW would never tell the truth and say "Profit and revenue are down because we lost customers and have made no attempt to figure out why or get them back."

darkcloak wrote:
I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

This isn't about growth. Exponential growth every quarter is impossible in all but a few sectors.
The goal here should be *any* growth. Stagnation shouldn't ever be applauded, especially when it's stagnation after investing something like 4 million pounds into a new website.
Because the 4m is an investment that should be recouped (ideally). If sales are stagnant, the investment isn't recouped and they essentially threw money away.

Taking a quick look at this report as well as their annual reports, GW's reports always looks like like it was written by a second year B-school student and it just gives me the general feeling that the people running GW doesn't know how to run a publicly traded company let alone a niche retail company.

darkcloak wrote:
I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

By all accounts, the tabletop war gaming hobby as a whole did grow exponentially over the past 2 years. Every other major player in the industry has been expanding. We don't know their exact sales numbers but we know from the industry reports that those other games are selling more and more every year. GW, the largest and oldest player in this industry, has been shrinking. I'll put it to you this way, if laptop computers had record sales growth over the last 2 years, would you expect a company like Apple to be losing 10%+ revenue and profit over that same period?

darkcloak wrote:
I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

Because stability is stagnation. Because of inflation, if your revenue is the same this year as last year, then the amount of business you conducted is actually worth less, how much less will depend on the current rate of course, but less nevertheless.

Therefore there's no option but to keep on trying to grow. The issue with GW has been that when they have grown, and when they have made profit, they've often been more inclined to siphon it off to the shareholders than reinvest to build more growth.

I guess one could say they haven't been growing in the right way?

I'm sure that their chairman also being the largest individual stakeholder has absolutely nothing to with it.

 Toofast wrote:
It's not looking good. How do you release so many new products in a year at exorbitant prices and still lose that much revenue? The exchange rate doesn't even come close to accounting for this kind of drop in revenue and profits. Of course GW would never tell the truth and say "Profit and revenue are down because we lost customers and have made no attempt to figure out why or get them back."

Over 50% of GWs turnover was generated in foreign markets, exchanges rates really are very important. Ergo why it is mentioned in the report most years.

The last report also identified North America and Austrailia as having been challenging within the period. So they do mention the negatives albeit wrapped up in management BS, you just have to read beyond the chairmans preamble.

TerrorLegion wrote:
Taking a quick look at this report as well as their annual reports, GW's reports always looks like like it was written by a second year B-school student and it just gives me the general feeling that the people running GW doesn't know how to run a publicly traded company let alone a niche retail company.

To quote Gordon Ramsay: I wouldn't trust you to run a bath, let alone a fething [miniatures company], you donkeys!

 Toofast wrote:

darkcloak wrote:
I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

By all accounts, the tabletop war gaming hobby as a whole did grow exponentially over the past 2 years. Every other major player in the industry has been expanding. We don't know their exact sales numbers but we know from the industry reports that those other games are selling more and more every year. GW, the largest and oldest player in this industry, has been shrinking. I'll put it to you this way, if laptop computers had record sales growth over the last 2 years, would you expect a company like Apple to be losing 10%+ revenue and profit over that same period?

Hmm, I don't necessarily disagree too fast, but there are alternative narratives and viewpoints from that very same data set.

I'm Playing devils advocate, mind.
Just food find thought, but Is it true 'growth' or is it 'cannibalisation' of an existing market? 75% growth for corvus belli (infinity), whilst admirable and extremely impressive (and I love the game) is a drop in the bucket, or shall change at best for a company the size of gw. Iirc, Corvus belli have about thirty people on the books (memory says 27, but let's be generous and say 50-100). Same with the likes of pp (iirc turnover of 15 to 20 million). Gw have over fifteen hundred. Two thousand at peak. Most other wargames companies (wyrd, Spartan etc) would conceivably be talking about turnover in the hundreds of thousands, or low (single digit) millions.

Is there a conceivable narrative that gw could be haemorrhaging customers, with the smaller companies picking up a piece from those leaving, but the overall 'net size' and overall health of the niche industry of wargaming still shrinking as a result? I remember seeing a thread a while ago discussing internet traffic for big wargaming names. Steady decline across the board was what I remember seeing. (but again, the system used to analyse wasn't exactly reliable either, so interesting data, but pinch of salt required!)

I'm not saying this is a fact, the current status or even what I believe. I think in principle, it could be a possibility. After all, when the cold hard numbers are looked at, rapid growth of small companies offset against the slow decline of a behemoth might still result in a net loss. (75% increase in 'small change' does not necessarily equal, or make up for a 10% decline in 'behemoth finance').

I guess all I'm saying us folks should be wary about talk of the 'growth' of table top wargaming. (Personally, and for the record at worst, I think it's about as popular as it's ever been)

Wonder if we'll see another restructured White Dwarf?

"This channel showed growth in North America, Australia and the UK, offset by larger declines in non-strategic accounts and magazine sales. The net effect was a decline of 5.1% (£1.2 million)."

It's got to be more cost effective to just kill Warhammer Visions off.

I think it is fair to say, at least anecdotally, that the table top games market as a whole has been growing, and that companies are not merely cannibalizing GW's market share.

If you look at Kickstarter alone, table top games are raking in tons of cash, and board games are growing in mainstream popularity. The lines between board game and miniatures games are blurring as well, and it is reasonable to believe that these crossovers are bringing new customers into the table top wargames market.

For me personally, I look at the recent profusion of IP licenses among table top wargames as a decent indicator of growth. It is a good time to be buying, playing, making, and selling table top games right now.

weeble1000 wrote:
I think it is fair to say, at least anecdotally, that the table top games market as a whole has been growing, and that companies are not merely cannibalizing GW's market share.

If you look at Kickstarter alone, table top games are raking in tons of cash, and board games are growing in mainstream popularity. The lines between board game and miniatures games are blurring as well, and it is reasonable to believe that these crossovers are bringing new customers into the table top wargames market.

For me personally, I look at the recent profusion of IP licenses among table top wargames as a decent indicator of growth. It is a good time to be buying, playing, making, and selling table top games right now.

\

I was just about to say the same thing. Kickstarter is a good indicator that people are buying into wargaming. People want these games/models. And with games like X-Wing it's a move from board game to tabletop gaming, and has become HUGELY popular. The models have basic paint jobs, but can easily be repainted, allowing people to ease into other aspects of the hobby at their own pace without having to field the dreaded army of grey plastic.

GW spent how much on the White Dwarf "redesign"? And what like 1-2 years after they had just overhauled it already? And it failed miserably. Any company worth it's salt would drop a new project idea that they ran with and ended up eating £1.2m. That number screams utter failure, no matter how big your company is.

GW management have been on a binge the last 10 years to try and squeeze as much blood from their rocks as they possibly can. Price increases well beyond the rate of inflation, rules designed to inflate model count requirements, trying to stalwart online discounters, trying to stop bits services, moving huge chunks of inventory to "direct only" to keep 100% of the profit on those items. They've neglected their distributors who used to do all the promoting for them, and then do NO advertising or marketing. Of course their growth is failing, they've cut off the hand that was feeding them and didn't replace it with anything else.

It's a shame Kirby owns as much as he does, and it's more of a shame that no one is in any position to force him and his terrible ideas out of the company.

If GW would release some decent product for a reasonable price, they could be raking it in. Their mismanagement of the Hobbit license is a good example of their stupidity that is locking them out of the growth in the table top market. People will buy stuff that's good, if it's priced reasonably.

GW have so many advantages- the legacy, the technological advantage, in house production, a decent amount of retail penetration, and a popular IP. The games might be a bit wonky but their miniatures are still pretty great, barring the odd Razorgor. It is stupid pricing and management policies that have them where they are, because quite frankly they should be destroying their competition and raking in the cash.

Okay, so projecting their revenue and profit to be identical in the 2nd half of the year (in other words, take the figures we just got and x2), this is what i come up with. So i would say that their cost cutting measures have been of some success (managing to roughly keep last year's profit levels despite declining revenue). It doesn't look good to me, however, especially since GW has been firing all it's big guns constantly of late. Running the figures for sales by channel (i calculated this years figures, so if anyone spots any errors please let me know) we get the following:

darkcloak wrote:
I never understood how companies can be expected to grow exponentially every single year. The profit line? How about the stability line?

How about instead of chasing profits we just try to keep people working and providing a consistent product and experience?

Wishful thinking I know but...

The thing here is that GW is shrinking year on year, not remaining stable.

TerrorLegion wrote:
Taking a quick look at this report as well as their annual reports, GW's reports always looks like like it was written by a second year B-school student and it just gives me the general feeling that the people running GW doesn't know how to run a publicly traded company let alone a niche retail company.

If this is true there should be an activist who can step in and fix it.

But, the company would need to be undervalued by at least half for an activist investor to take the risk.

Magic has been doing fine since wizards was taken over. Maybe the best we can hope for is a corporate buy out.

jcress410 wrote:

TerrorLegion wrote:
Taking a quick look at this report as well as their annual reports, GW's reports always looks like like it was written by a second year B-school student and it just gives me the general feeling that the people running GW doesn't know how to run a publicly traded company let alone a niche retail company.

If this is true there should be an activist who can step in and fix it.

But, the company would need to be undervalued by at least half for an activist investor to take the risk.

Magic has been doing fine since wizards was taken over. Maybe the best we can hope for is a corporate buy out.

We've been waiting for that buyout for nearly 10 years now. No one wants to buy this sinking ship for how much the sellers would want for it. I don't doubt that any time shares are sold, Kirby and associates are likely the ones buying it.

 Torga_DW wrote:
Okay, so projecting their revenue and profit to be identical in the 2nd half of the year (in other words, take the figures we just got and x2), this is what i come up with.

Historically, GW's second half year results have been 7.7% higher than the first half year results (1995 till present) while the past 5 years have averaged 4%.

Their expenses are largely flat (have been for quite awhile) so the year end profits are likely to be in the £7-10 million range with another exceptional cost (Warhammer World renovation this year...).