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Barfolomew wrote:

 KiloFiX wrote:
I'm not saying GW's current position is right but even if they:

+Added more staff and expanded their stores
+Cleaned up their rules
+Cut prices of their models
+Supported tournaments and communities

I don't know if the above would improve their profits.

All the above either adds more cost or cuts income, with the hope that customers purchase more volume to make up. But with eBay, proxies, competing war games, video games, etc. - I don't know if customers would actually buy more volume.

Maybe the answer really is to downsize and just focus on the 'collectors'. I don't know, I'm just presenting an alternative.

GW needs to follow WOTC's lead on how they handled a similar situation back in the 2000s. WOTC had their own stores and many of the same problems GW has currently. WOTC chose to close their stores, make friends with the FLGSs, increase their tournament support and tighten up their rules. From all indications, this worked out well as WOTC is fairly successful.

GW needs to close their stores (online and brick and mortar)
GW needs to make friends with the FLGS owners
GW needs to tighten up and modernize their rules
GW needs to have better tournament support

More accurately, Hasbro decided to cut WotC's brick and mortar stores.

They wanted WotC for their IP, not their physical properties.

The Auld Grump

Hi

Some armchair analysis:

2014
123.5 million in sales
the breakdown in sales can be found on page 8 of the annual report
42% is hobby centres - 51.87 million
36% is trade - 44.46 million
9% is mail order - 11.12 million
the remaining 13% is black library and forgeworld.

A 5% reduction in hobby centres is - 49.28 million
A 3% reduction in trade is 43.12 million
A 5% increase in mail order 11.67 million
Assume stability from forgeworld and black library because it is not noted as significant - 16.01 million

Therefore, annual Sales in 2015 - 120.12 (note there is some rounding in the numbers above, so this might not equal that, but does in my spreadsheet). So down 3.4 million, or a 2.7% loss in revenue, which is a damn sight better than the 8.2% of 2013 to 2014. Still not a growth position, and hardly a complete picture without expenses factored in... but loss of sales, at least, appears to be decelerating.

Would love to see a 40K to Fantasy to LOTR to Forgeworld lens publically applied to their reporting as well, including cost allocations for development and storage of product... but that is wishful thinking...

One more caveat that I don't care to figure out - it could be a 5.4% and 3.4% reduction and a 4.6% increase in the respective areas, which would reduce revenue by a fair amount (+/- 475,000 or so).

Cheers,
Nate

Can't argue with the logic, if the figures are at least a little bit assumption.

If they've managed to find at least a few million in economies, it could be another year of getting away with it, but this year has seen them pull the trigger on some awfully big ammunition, so once again, we'll be looking at the next year thinking "what can they possibly do to prop up the sales this year" but with fewer options.

I would love for them to realize as a company that they are first a game company second a collectable model company. I have enjoyed GW since the end of 3rd edition up to the present. And I could only hope they find their way back to what they used to be. Like across the board price drop to get new blood into the game. Older players would not giving a second thought to picking up that new box of models that just came out or picking up another army on impulse. Lastly putting support in the tournament scene again and showing the customers that they still care about us.

 carlosthecraven wrote:
Hi

Some armchair analysis:

-snip-

Therefore, annual Sales in 2015 - 120.12 (note there is some rounding in the numbers above, so this might not equal that, but does in my spreadsheet). So down 3.4 million, or a 2.7% loss in revenue, which is a damn sight better than the 8.2% of 2013 to 2014. Still not a growth position, and hardly a complete picture without expenses factored in... but loss of sales, at least, appears to be decelerating.

Would love to see a 40K to Fantasy to LOTR to Forgeworld lens publically applied to their reporting as well, including cost allocations for development and storage of product... but that is wishful thinking...

One more caveat that I don't care to figure out - it could be a 5.4% and 3.4% reduction and a 4.6% increase in the respective areas, which would reduce revenue by a fair amount (+/- 475,000 or so).

Cheers,
Nate

Annual General Report hasn't been released yet. So how did you come by these numbers.

 Achaylus72 wrote:

 carlosthecraven wrote:
Hi

Some armchair analysis:

-snip-

Therefore, annual Sales in 2015 - 120.12 (note there is some rounding in the numbers above, so this might not equal that, but does in my spreadsheet). So down 3.4 million, or a 2.7% loss in revenue, which is a damn sight better than the 8.2% of 2013 to 2014. Still not a growth position, and hardly a complete picture without expenses factored in... but loss of sales, at least, appears to be decelerating.

Would love to see a 40K to Fantasy to LOTR to Forgeworld lens publically applied to their reporting as well, including cost allocations for development and storage of product... but that is wishful thinking...

One more caveat that I don't care to figure out - it could be a 5.4% and 3.4% reduction and a 4.6% increase in the respective areas, which would reduce revenue by a fair amount (+/- 475,000 or so).

Cheers,
Nate

Annual General Report hasn't been released yet. So how did you come by these numbers.

The OP gave the percentages for 2015 which were taken from the GW press announcement. The numbers from 2014 I assume came from the 2014 annual report.

The effect of these non-core activities and the continuing effects of unfavourable exchange rates mean that our reported sales are likely to show small declines in retail (c.5%) and trade (c.3%). Mail order growth was c.5%.

 carlosthecraven wrote:
Therefore, annual Sales in 2015 - 120.12 (note there is some rounding in the numbers above, so this might not equal that, but does in my spreadsheet). So down 3.4 million, or a 2.7% loss in revenue, which is a damn sight better than the 8.2% of 2013 to 2014. Still not a growth position, and hardly a complete picture without expenses factored in... but loss of sales, at least, appears to be decelerating.

Just thought i'd touch on this. First half wasn't too good, inline with the general direction of last year. So between then and now they've been firing their big guns with lots of 40k releases like adeptus mechanicus, etc, and they're still in decline. How many big guns do you think they have left? We heard rumours of genestealer cult army, there's the new fantasy (which i predict will do poorly) and that only leaves another reboot of 40k that i can see.

Rebranding all their shops to Warhammer creates a nice excuse for "extraordinary" expenses to explain away reduced profits.

However this may not come out until the end of year statement in Jan 2016.

So does the WHW renovation.

 carlosthecraven wrote:
Hi

Some armchair analysis:

2014
123.5 million in sales
the breakdown in sales can be found on page 8 of the annual report
42% is hobby centres - 51.87 million
36% is trade - 44.46 million
9% is mail order - 11.12 million
the remaining 13% is black library and forgeworld.

A 5% reduction in hobby centres is - 49.28 million
A 3% reduction in trade is 43.12 million
A 5% increase in mail order 11.67 million
Assume stability from forgeworld and black library because it is not noted as significant - 16.01 million

Therefore, annual Sales in 2015 - 120.12 (note there is some rounding in the numbers above, so this might not equal that, but does in my spreadsheet). So down 3.4 million, or a 2.7% loss in revenue, which is a damn sight better than the 8.2% of 2013 to 2014. Still not a growth position, and hardly a complete picture without expenses factored in... but loss of sales, at least, appears to be decelerating.

Would love to see a 40K to Fantasy to LOTR to Forgeworld lens publically applied to their reporting as well, including cost allocations for development and storage of product... but that is wishful thinking...

One more caveat that I don't care to figure out - it could be a 5.4% and 3.4% reduction and a 4.6% increase in the respective areas, which would reduce revenue by a fair amount (+/- 475,000 or so).

Cheers,
Nate

It's a bit ambiguous in the press release, but the decline percentages you're operating with most likely refer to constant currency (which is GW pretending what life would be like if the Euro hadn't fallen into a deep hole). The half-year report shows they had already had a decline in revenue by £4m in the first half of the year, so if they had turned the trend and started growing again for a total annual decline of only £3.4m you can be pretty sure the wording would have been very different.

 Thud wrote:

It's a bit ambiguous in the press release, but the decline percentages you're operating with most likely refer to constant currency (which is GW pretending what life would be like if the Euro hadn't fallen into a deep hole). The half-year report shows they had already had a decline in revenue by £4m in the first half of the year, so if they had turned the trend and started growing again for a total annual decline of only £3.4m you can be pretty sure the wording would have been very different.

I agree with this completely. The release would have been worded much more positively if they had been able to turn things around strongly enough to significantly slow the slide that has been occurring over the last several reports and most notably accelerating in the past year and a half. My take on the wording of the press release is that it's a, not untruthful, statement of accounts to forestall an exodus such as occurred Jan 2014. The boggling thing is that anyone with a modicum of financial expertise (me) can read through the statement so I'm a bit puzzled why they bothered, considering their largest investors are institutional and mainly in it for the dividends.

Possibly because they are so small most of the investors won't give it more than a cursory glance from one of the interns waiting on the kettle to boil.

It's still $150 million, I know that's not Rio Tinto Zinc but it's hardly pocket change either.

If the funds are unconcerned I suspect it is because as you say they are only interested in dividends and GW is always good at issuing dividends. On at least one occasion they borrowed the cash to give a dividend because they had lost too much money that year.

So this story finally hit BoLS today, and some of the comments have been interesting. None of the usual blind support for GW as of yet.

One poster added this link: http://www.macroaxis.com/invest/market/GAW.L--Games-Workshop-Group-plc

I know nothing about this service or how to interpret the information contained within the page, but it's analysis shows a 70% chance of GW going bankrupt in the next two years.

Anybody able to add some insight here please?

Well, they're valuing GW shares at £500 rather than £5 by the looks of it. (LSE lists in pence, not pounds, whereas the NYSE lists in dollars.)

So that'd immediately undermine my confidence in their info!

bginer wrote:
So this story finally hit BoLS today, and some of the comments have been interesting. None of the usual blind support for GW as of yet.

One poster added this link: http://www.macroaxis.com/invest/market/GAW.L--Games-Workshop-Group-plc

I know nothing about this service or how to interpret the information contained within the page, but it's analysis shows a 70% chance of GW going bankrupt in the next two years.

Anybody able to add some insight here please?

Not a chance. They've just spent £4m extending warhammer world. If they were that close to bankruptcy they wouldn't be investing that much in a venue that accounts for less than 5% of their annual turnover

I agree with youR conclusion, but not necessarily with your method.

It brings to mind a story my economics teacher once (actually, repeatedly!) told about how a class of students were given a set of accounts to study, with a view to deciding if the company was in sufficiently good shape to borrow money from the bank the students hypothetically worked for. Something like 80% of the students decided that they'd be happy to loan the company money on the basis of their accounts.

The accounts were taken from a company that went bankrupt shortly after (it may have been the next day, memory is hazy.)

I personally worked for a company where I closed up and went home on the Thursday, found an email on the Friday instructing us managers not to open up, only to be summoned to a meeting later that morning to be told the company had gone bankrupt.

Suffice to say, current behaviour isn't any sort of indicator of future performance.

I admit I don't know much of anything about renovations, but how reasonable is that amount? I'm just thinking of the 4 million pound website update from a couple of years back, which by all accounts seemed significantly overpriced. Glad they're updating WW and such, I just sometimes get the feeling that they're trying to generate these significant one-time costs to help explain away the year-on-year decreasing revenue.

 Azreal13 wrote:
Well, they're valuing GW shares at £500 rather than £5 by the looks of it. (LSE lists in pence, not pounds, whereas the NYSE lists in dollars.)

So that'd immediately undermine my confidence in their info!

Yeah, that does kind of hit their credibility.

I know what you mean, but to my knowledge the work was paid for directly, not from loans. Given that most of the shareholders are insurance companies, if the market trend showed bankruptcy as likely in that time frame, and the board decided to make an investment of that size on a venture that would take over the suggested two years to recover, there would be a vote of no confidence and the CEO replaced. Although the CEO who was in place when the work began has stepped down, it isn't because of that.

All that said, I completely accept the point of market instability, and will acknowledge that any thing can happen. I just don't think it likely.

 JamesY wrote:
Not a chance. They've just spent £4m extending warhammer world. If they were that close to bankruptcy they wouldn't be investing that much in a venue that accounts for less than 5% of their annual turnover

Wait. I thought the 4 million was for the website and tools.

What did they do to WW? Add a couple of wings?

 Accolade wrote:
I admit I don't know much of anything about renovations, but how reasonable is that amount? I'm just thinking of the 4 million pound website update from a couple of years back, which by all accounts seemed significantly overpriced. Glad they're updating WW and such, I just sometimes get the feeling that they're trying to generate these significant one-time costs to help explain away the year-on-year decreasing revenue.

No as you can see it is their turnover which is decreasing, in house expenditures will only dictate how much of that turnover is profit. The expenses can't cover the fact that the sales are dropping.

@ bginer. Pretty much yeah.

I've not visited WHW, but my understanding is the renovations have been fairly substantial? (Seem to remember that "Warhammerfest" was expected to take place there etc?)

That said £4m is a lot to spend when you're not buying land or property.

New front, miniature hall massively extended up and backwards, three new store fits, 10-15 painters working for a year painting the displays, relaying the car park etc. It's been a big job, and all the while tram works beginning done right outside, god knows how many delays that caused.

 Accolade wrote:
Glad they're updating WW and such, I just sometimes get the feeling that they're trying to generate these significant one-time costs to help explain away the year-on-year decreasing revenue.

I had that feeling too, and I'm still suspicious if the WHW refit was to make it a more generic exhibition style building to make it easier to sell in future.

 JamesY wrote:

 Accolade wrote:
I admit I don't know much of anything about renovations, but how reasonable is that amount? I'm just thinking of the 4 million pound website update from a couple of years back, which by all accounts seemed significantly overpriced. Glad they're updating WW and such, I just sometimes get the feeling that they're trying to generate these significant one-time costs to help explain away the year-on-year decreasing revenue.

No as you can see it is their turnover which is decreasing, in house expenditures will only dictate how much of that turnover is profit. The expenses can't cover the fact that the sales are dropping.

@ bginer. Pretty much yeah.

Oh I understand expenses only impact overall profit generation, I'm just thinking about Tom Kirby's inane preambles, which always come with blaming some circumstance for the loss in revenue. A couple of years back, it was the website, and then the past year it was the individual store manager's faults for things not being more positive.

It just seems like these items get thrown up as a smoke screen for investors who only take a couple of glances at what is going on and not bother to check the numbers.

It's pretty cool that there is such a place in the world, anywhere, by any company I wish I were headed out towards Nottingham so that I could check it out

Herzlos wrote:

 Accolade wrote:
Glad they're updating WW and such, I just sometimes get the feeling that they're trying to generate these significant one-time costs to help explain away the year-on-year decreasing revenue.

I had that feeling too, and I'm still suspicious if the WHW refit was to make it a more generic exhibition style building to make it easier to sell in future.

There were a few reasons, one of the main being that its purpose as an international visitors centre wasn't really happening, instead a lot of the local gamers take it for granted that it is their gaming space. It's a big step towards returning it to its original function, and it is fantastic.

@ accolade yeah your last point is probably right and typical of all limited companies trying to spin poor performance.

It certainly makes sense for them to host their own events in space they already own; it cost them a fortune shipping everything to Birmingham. I'm just wary about it becoming very generic instead of the old castle it used to be.

I'm going to visit in August, so looking forward to seeing what's new.

Castle is still there. Although the store has been split into three and no longer has that aesthetic, imagine big aquariums in the gaming hall...