Games Workshop Group: Special dividend payment

Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you:

No adverts like this in the forums anymore.
Times and dates in your local timezone.
Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance.
Email notifications for threads you want to watch closely.
Being a part of the oldest wargaming community on the net.

If you are already a member then feel free to login now.

**Koppo**

According to Morning Star http://www.morningstar.co.uk/uk/news/AN_1423808141935072800/uk-dividends-calendar---week-ahead.aspx

GW are paying a special dividend next week (the 19th), does anybody know why this is or from where they have this spare cash?

**Shandara**

They borrow it?

**reds8n**

http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=GB0003718474GBGBXSSMM&lang=en

Games Workshop Group PLC

DIVIDEND

For immediate release 11 February 2015

Games Workshop Group PLC announces that the Board has today declared a dividend of 16 pence per share. This will be paid on 20 March 2015 for shareholders on the register at 20 February 2015, with an ex-dividend date of 19 February 2015. The last date for elections for the dividend re-investment plan is 27 February 2015.

It's not special as such, just what you have to do -- ideally -- if you have shareholders.

**notprop**

GW have plenty of cash to pay dividend.

All in the reports.

**Koppo**

reds8n wrote:
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=GB0003718474GBGBXSSMM&lang=en

Games Workshop Group PLC

DIVIDEND

For immediate release 11 February 2015

Games Workshop Group PLC announces that the Board has today declared a dividend of 16 pence per share. This will be paid on 20 March 2015 for shareholders on the register at 20 February 2015, with an ex-dividend date of 19 February 2015. The last date for elections for the dividend re-investment plan is 27 February 2015.

It's not special as such, just what you have to do -- ideally -- if you have shareholders.

That is the dividend paid on the 20th of March. The special dividend is paid next week and would not be the same one as mentioned in the link/release. It could be that Morning Star/Alliance News have the incorrect dates but I would be surprised at that.

Automatically Appended Next Post:

notprop wrote:
GW have plenty of cash to pay dividend.

All in the reports.

So this is a "returning spare cash to investors" sort of thing?

**SilverMK2**

Koppo wrote:
So this is a "returning spare cash to investors" sort of thing?

Maybe Kirby's finecast yacht was too full of holes and he needs the cash in order to patch them up with a big order of liquid green stuff. After all it is the highest quality yacht in the world.

**notprop**

Its should be. Too much cash in a business can be a negative thing - recent reports of allot of US business recently

There wasn't anything paid in the last results so the special nature of the dividend could be in reaction to shareholder feedback or deliberately held back to kick the share price after the inevitable drop due to reported sales?

**Thud**

~£350k for Kirby.

**Azreal13**

There have also been some substantial changes in share ownership in the last week or so.

I'm sure the two are completely unrelated!

**treslibras**

Thud wrote:
~£350k for Kirby.

This.

If this story is true, then that is another hint to "Kirby and partners" pressing as much juice out of the orange as possible before it turned sour. But maybe he just wants to find a buyer for his shares and this is the cherry topping?

Did not someone calculate that GW would lose profitability in one year's time if the current trend of loss of sales vs. stagnating costs continued?
He needs to hurry up then to get his sheep on dry land, as we say.

**PhantomViper**

Azreal13 wrote:
There have also been some substantial changes in share ownership in the last week or so.

I'm sure the two are completely unrelated!

Could you elaborate? What changes were those?

**notprop**

treslibras wrote:
Thud wrote:
~£350k for Kirby.

This.

If this story is true, then that is another hint to "Kirby and partners" pressing as much juice out of the orange as possible before it turned sour. But maybe he just wants to find a buyer for his shares and this is the cherry topping?
.....

His risk, his reward.

Kirby owns < 10% from memory, he's hardly going to be the only one pushing for a dividend. I'd suggest as CEO his 2 pennies was on keeping liquidity in the business as there was no indication of a dividend in the recent report. A special issue would indicate pressure from elsewhere. I.e. Shareholders saying "are you fething kidding me, you have £xM sitting in the bank doing jack gak and no plans for reinvestment. Gimme!".

Money from stock dividends is a good place to find some earning as savings are generating little.

**Howard A Treesong**

What 'risk'? He's got to retire soon and his fortune is made, and insulated from anything that may happen to GW.

It's a bit daft that GW apparently have lots of money sitting around they can't reinvest, after cutting so much to the bone there are surely some places that would be very worthwhile to strengthen.

**notprop**

He took the company Public and made it the size it is. Did you miss the last 20 years?

**Lanrak**

Kirby took the company public.

The hard work of the staff at GW made it the largest games company in the world.

Kirby's total in ability to understand the business GW is in, and its potential audience.Has lead to the decline of GW plc over the last decade.

(Kirby has made millions from 'raising retail prices to cover falling sales ', because fixing the problems of dwindling customers , requires more effort than he is prepared to put in.)

Any Company Chairman who thinks market research is not important, is deluded or incompetent.

**notprop**

Yeah, he tripped up and luckily found himself in a Scrooge McDucks like money pit John Blanche had been hiding down the back of his leathers.

He was General Manager, left and was asked back. He lead a management buy out when BA wanted to do other things. Then GW grew and grew.

Any team needs a leader and I don't think you can write him off as incompetent because of the obvious achievements garnered during his tenure. Like him or loathe him he's built GW up to what they are.

I'm no fan of current GW but I wont deny he has earnt his money.

Of course he seems to have stayed longer that is prudent but again to be fair there is a new man at the helm who will hopefully steer the ship in a more pleasing direction.

**Azreal13**

PhantomViper wrote:
Azreal13 wrote:
There have also been some substantial changes in share ownership in the last week or so.

I'm sure the two are completely unrelated!

Could you elaborate? What changes were those?

http://investor.games-workshop.com/

All right there, two notifications on the 3rd, another on the 9th.

I haven't even bothered to check if they're sales, purchases or new or existing names from the major equity holders, but there's been enough off the floor trading to generate these three reports, but nothing really going on with the shares, even after the dividend announcement.

**Howard A Treesong**

notprop wrote:
He took the company Public and made it the size it is. Did you miss the last 20 years?

I don't think that taking a risk 20 years ago justifies him running the company down to wring out more money into his personal fortune, there are more people than just him that have contributed to its success in that time. All the people with the risk today are those that stand to lose their jobs. He's safe as houses, and that attitude shows.

**Azreal13**

With the possible exception of the takeover, Kirby is to the history of GW essentially what Indiana Jones is to the plot of Raiders.

**Grot 6**

Mergers and Acquisitions specialist... just saying.

http://natfka.blogspot.com/2014/01/games-workshop-and-forgeworld-changes.html

**frozenwastes**

From the last thread about GW's financial results:

http://www.dakkadakka.com/dakkaforum/posts/list/180/626149.page#7418660

"What has all this accomplished? It's allowed Kirby to receive dividend payments above and beyond what his 7% ownership should have entitled him to by paying out a ridiculously high ratio. Had he stuck with a more financially conservative 30-40% pay out ratio and reinvested the rest in the business, GW would be far better off, but Kirby would have less cash in the bank. This "cash generation" talk is just justification for paying himself more than he's entitled to by irresponsibly not re-investing in the company. The other share holders get the money as well, and they are indeed legally entitled to it as owners, but it's looting at the expense of the future of the company."

EDIT: Here's the code/chart from the post in the link:

All that money from 5 years of record earnings per share through price hikes and cost cuts is gone out of GW, probably forever. Imagine what could have been accomplished if Kirby would have been willing to accept the normal dividend ratio of the 90s. It makes sense for Kirby though. He can look at his 7% and look at a 40% pay out ratio and see that he'd get 2.8% of GW's earnings. Then he can ask himself how much more money he could get if he were to just crank up the pay out ratio to two to three times GW's old dividend rate from the height of the LOTR boom. Now he's being paid as if he owned 15-20% of the company. Not a bad move as far as maximizing his own bank account at the expense of GW's future as a company is concerned.

**Kriswall**

Azreal13 wrote:
PhantomViper wrote:
Azreal13 wrote:
There have also been some substantial changes in share ownership in the last week or so.

I'm sure the two are completely unrelated!

Could you elaborate? What changes were those?

http://investor.games-workshop.com/

All right there, two notifications on the 3rd, another on the 9th.

I haven't even bothered to check if they're sales, purchases or new or existing names from the major equity holders, but there's been enough off the floor trading to generate these three reports, but nothing really going on with the shares, even after the dividend announcement.

Appears to be run of the mill investment companies buying shares for their various mutual funds and strategies. Nothing to see here. Move along. Mutual Fund companies often appear on majority shareholder reports for smallish companies (like GW).

**Azreal13**

The issue here is not that some funds bought some shares.

The issue here is that nobody of any note has traded a significant amount of shares sufficient to warrant one of these notices in some time, to the best of my recollection the last was when some were offloaded this time last year after the crash in share price.

Now, within two weeks of the first serious movement on the stock for some time, an unexpected dividend is announced.

I don't believe in coincidences.

**Kriswall**

Azreal13 wrote:
The issue here is not that some funds bought some shares.

The issue here is that nobody of any note has traded a significant amount of shares sufficient to warrant one of these notices in some time, to the best of my recollection the last was when some were offloaded this time last year after the crash in share price.

Now, within two weeks of the first serious movement on the stock for some time, an unexpected dividend is announced.

I don't believe in coincidences.

The ex date for the dividend isn't until 2/19. This means that if you want to be eligible for the dividend... go out and buy some now. There is nothing sinister here as there is plenty of time between the announcement date and the payment date to buy or sell. You're making it sound like the buyers/sellers are trying to pull some sort of "fast one". This is business as usual. GW has historically been seen as a good dividend producing stock. They issue dividends all the time.

A "special dividend" is just a normal dividend paid on top of the "regularly scheduled" dividends.

**Azreal13**

The purchases occurred before the dividend was announced.

They usually issue two dividends a year, at the full and half yearly statement.

**wuestenfux**

Lanrak wrote:
Kirby took the company public.

The hard work of the staff at GW made it the largest games company in the world.

Kirby's total in ability to understand the business GW is in, and its potential audience.Has lead to the decline of GW plc over the last decade.

(Kirby has made millions from 'raising retail prices to cover falling sales ', because fixing the problems of dwindling customers , requires more effort than he is prepared to put in.)

Any Company Chairman who thinks market research is not important, is deluded or incompetent.

Right.
The dividend is fully financed by the customs.

**Kilkrazy**

The company's management are entitled to decide the dividend payments based on what they feel is the best use of the company's money. If the owners (shareholders) disagree with the management decision they can argue with them and ultimately either replace them or else sell their holdings.

Leaving aside our emotional investment in the games, GW looks like a pretty good medium sized company. They are the leaders in their sector, profitable, cash-generating, and fully capable of paying the dividends.

There is a worry over the apparent decline in sales of the past few years, but this will not be a problem if it can be stopped.

Whether the money would be better used for investment is a difficult question to answer. GW already have a lot of their own machinery and facilities and have been upgrading them. They have a large -- arguably too large -- range of products that they are constantly adding to. Diversification into more games is something I would like from a personal view, but it may not be a wise investment decision (see Dread Fleet.)

The picture is of a company that if it can remain stable will throw off about 10 to 15% of its turnover every year as cash dividends. That is not a bad place to be.

**AllSeeingSkink**

Kilkrazy wrote:
Whether the money would be better used for investment is a difficult question to answer. GW already have a lot of their own machinery and facilities and have been upgrading them. They have a large -- arguably too large -- range of products that they are constantly adding to. Diversification into more games is something I would like from a personal view, but it may not be a wise investment decision (see Dread Fleet.)

I think the best place for reinvestment would be advertising, employing people to work with FLGS's more to push the brand more, trying to get more good will with customers through events and more side products rather than trying to further bloat the 2 main games.

**Lanrak**

@Killkrazy.
''There is a worry over the apparent decline in sales of the past few years, but this will not be a problem if it can be stopped. ''

The worry is that GW corporate management seem to believe that raising retail priced to off set falling sales is a valid long term option.
As this has given the man making the decisions (Tom Kirby, ) extra money each year for doing nothing different, I do not think they will be making any radical changes any time soon.

My worry is the man making the decisions does not care about falling sales or even falling profits, as long as there is some money left for him to give himself a share payout.

I agree with AllseeingSkink.
The money GW plc has just payed out on share dividends would be much better spent on market research and marketing.

**frozenwastes**

Kilkrazy wrote:
Whether the money would be better used for investment is a difficult question to answer.

Simply examine the two possible answers.

Yes, the money would have been better off reinvested in the company.

No, the money would not have been better off reinvested in the company.

If the 2nd one is right that means that there's nothing GW can do with its money to stop the decline in revenue. If the 2nd one is true, then GW has systemic problems. That the best move was to get the cash out of the company while it declines.

Doesn't paint a pretty picture for GW. Either they missed out on reinvestment that might have prevented their current decline or they did everything they could but still declined.

It's possible that they are correct. That the demographic shift that propelled them into an international company (the children of the baby boomers growing up) is over, they got the money they could from the LOTR boom and now are simply in decline no matter what they do. So they may as well get all the money they can into their pockets now. And then manage the decline, staying ahead of falling revenue through cost controls. Hopefully (from GW's perspective) they will find a stabilization point and the decline can cease.

I'm sure that Kirby will never have to sell his shares on the open market. He'll arrange with either an investment firm or with GW itself to buy them so they don't flood the market and drive the price down. At the last general meeting a share buyback was authorized of sufficient size to cover his stake in the company. I imagine the authorization will be maintained year over year until he's ready to fully retire.