GW 2012 financial year.

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**reds8n**

http://investor.games-workshop.com/wp-content/uploads/2012/07/Preliminary-announcement-2012-final.pdf

Highlights
 Revenue
- Revenue at £131.0m (2011: £123.1m)
- Revenue at constant currency* at £130.8m (2011: £123.1m)
 Profit
- Operating profit pre-royalties receivable at £15.6m (2011: £12.8m)
- Operating profit at £19.1m (2011: £15.2m)
- Pre-tax profit at £19.5m (2011: £15.3m)
 Earnings per share of 46.8p (2011: 36.0p)
 Cash generated from operations of £28.0m (2011: £25.8m)
 Dividends per share declared in the year of 63p (2011: 45p)
Mark Wells, CEO of Games Workshop, said:
“Games Workshop has had a good year. We have launched some great new products
including the new Citadel paint range. We have made good progress on all our major
initiatives. This has resulted in an encouraging level of volume growth. We have a strong
management team and excellent staff who are committed to delivering a healthy return on
capital. We have honoured our commitment to distribute genuinely surplus cash to our
shareholders.

Automatically Appended Next Post:

To give you an idea of how well the new Citadel paints were received by Hobbyists, the launch
generated £2.75 million sales of paint in April alone. Of the 2.3 million pots that were dispatched from
Lenton, some 2 million have already been sold. In sales to independent stockists all of the initial batch
of 1,600 display racks sold through and we have had to order a further 600 racks to satisfy demand.
We put a Direct bundle deal on our web store of the complete set of 145 paints priced at £333 and all
1,000 bundles sold out within a few days.

Our manufacturing and supply chain coped very well with the demand for the new Citadel paint range.
By consolidating the bottling and filling operation in Lenton and by having a high quality paint supplier
based in the UK, quality issues have been less than 0.01% and we have delivered a 15% reduction in
cost per unit.
In addition, having all production based in the UK, we have been able to deliver a 99% in stock service
level for retail. This in spite of the fact that we had to re-order some of the paint colours because we
sold through three months‟ worth of stock in three weeks. These re-orders were in the warehouse
within 48 hours.
Following the launch, we have seen core games sales increase in many territories, which suggests
that we have been able to use this launch to improve our recruitment activity. The high take up of the
full size paint racks in sales to independent stockists suggests that the new paint range will be selling
well throughout the year in those accounts. We have also ensured that each of the paints has a
trademark protected name to prevent anyone else from mimicking our colour palette.
All in all, a great example of the power of our vertically integrated niche business model.

New products
For those of you who are Games Workshop Hobbyists, our new products pipeline is probably what
interests you most. Sadly this is not something that I can say too much about: keeping details of our
future releases secret until just before they are available to buy adds to the excitement and success of
each launch. In the last 12 months we have narrowed the disclosure window to the weekend before
release and sales of new products - and of White Dwarf which showcases the new products - have
been significantly higher as a result.

don't see the rumour situation changing anytime soon then.

...Course there's 3 Hobbit films now too of course.

Automatically Appended Next Post:

What I can say is that we will release some amazing products this year. Products that will surprise and
delight Hobbyists. We plan to do so every month, including December 2012 when we will release our
new Hobbit range to coincide with the film. And... ahh, but that would spoil the surprise. You will just
have to wait and see. You will not be disappointed.

**filbert**

So I guess all the fuss and cries of impending financial doom over GW's embargo actions/Finecast/Price rises (delete as applicable) was unwarranted then since it doesn't seem to have made a jot of difference to their bottom line?

**notprop**

Interesting... I wonder how some will interpret that negatively from a financial POV.

**Vaktathi**

I'd really love to see the numbers and sales information backing up the assertion that their tight grip on release information results in greater sales. While yeah, it looks like they grew this year, I have personally have trouble believing their release strategy has been a positive part of that growth, as from my perceptions and information it looks to be rather the opposite, with people having no idea stuff is out until they walk in for a game and then weren't prepared to buy it then, or just didn't care as much with no buildup.

Also, it looks like much of this increase has been fed by a couple of specific releases during the course of the fiscal year that didn't have similar releases of equal magnitude in the previous fiscal year, it looks like this year they basically just recovered the ground they lost during 2011 and are back up roughly to where they were in 2010.

**carabine**

Dear god, all this proves is that we're all a bunch of abused addicts.

We're all abused spouses addicted to this plastic crack they keep pedaling to us. Personally I spent 2012 and late 2011 spending $0.00 on GW product and I'm sad to see that other people haven't made their displeasure known with their wallets. It's the only way we'll get any progress out of this company.

That said I am happy to hear rumors attributed to Crudace mention that GW is planning on picking up their release speed dropping something if anything at all every month instead of bunching up releases every few months.

**jamin p**

I can't comment on the company as a whole however in my local store the change in release strategy has seen a marginal increase in sales. Remember the company is aimed at recruitment and new hobbyists still have a great weakness to the shiny syndrome and have the largest possible return.

Overall though, i'm glad the company has done well and is on the up again. I'm sure if the WD codex updates rumour is true along with the rumoured 40k release strategy then the company will continue to grow.

**swalker91**

It would've been interesting to know how many models were sold in comparison to last year. I guess a slight increase which isn't what a lot of people (including me) expected.

Thought the 15% reduction in cost per unit of paints was interesting, fairly certain they stayed the same price or went up in price for us? Can't remember though so maybe I'm just cynical! I wonder if production costs of other stuff has been reduced.

**AlexHolker**

Pretty much the same as last time: the "genuinely surplus cash" that was removed from the company and given to shareholders in the form of dividends is seven million pounds more than the company's annual profit. At best, Wells is using genuine but unrepeatable cost-cutting measures to keep the dividend high in the short term. At worst, he's devouring the company to do it.

Frankly, when half their products sit in limbo for a decade at a time, I don't believe any claim that they've run out of useful things to spend money on.

**Vaktathi**

AlexHolker wrote:Pretty much the same as last time: the "genuinely surplus cash" that was removed from the company and given to shareholders in the form of dividends is seven million pounds more than the company's annual profit. At best, Wells is using genuine but unrepeatable cost-cutting measures to keep the dividend high in the short term. At worst, he's devouring the company to do it.

Guess who some of the primary Shareholders are

Kirby did the exact same thing with enough shares to double his yearly income a few years ago.

**-Loki-**

swalker91 wrote:It would've been interesting to know how many models were sold in comparison to last year. I guess a slight increase which isn't what a lot of people (including me) expected.

Thought the 15% reduction in cost per unit of paints was interesting, fairly certain they stayed the same price or went up in price for us? Can't remember though so maybe I'm just cynical! I wonder if production costs of other stuff has been reduced.

Lower production costs rarely result in the saving being passed on to the consumers.

**Steve steveson**

notprop wrote:Interesting... I wonder how some will interpret that negatively from a financial POV.

And there we go...

AlexHolker wrote:Pretty much the same as last time: the "genuinely surplus cash" that was removed from the company and given to shareholders in the form of dividends is seven million pounds more than the company's annual profit. At best, Wells is using genuine but unrepeatable cost-cutting measures to keep the dividend high in the short term. At worst, he's devouring the company to do it.

Frankly, when half their products sit in limbo for a decade at a time, I don't believe any claim that they've run out of useful things to spend money on.

It's interesting the reason GW give for the secrecy, that it is to do with WD sales. It dose show they think of it as a catalog though. Hopefully the return to chapter approved is a good sign (even though I disagree with the short availability of rules for some important models)

**Flashman**

I'll give them some grudging respect for addressing the secrecy issue but I still don't believe the approach works any better than a decent marketing campaign.

**Jomy**

Wow. People are actually buying finecast then.

**PsychoticStorm**

So in the year that they released a new paint range and a new expensive rulebook for their most successful game system, they managed to get just 7,7 million more revenue, I am not that impressed.

I also like how they count units sold, when they should say units shipped, since the LGS may or may not have sold the vast amounts of paint they were required to buy.

**rodgers37**

filbert wrote:So I guess all the fuss and cries of impending financial doom over GW's embargo actions/Finecast/Price rises (delete as applicable) was unwarranted then since it doesn't seem to have made a jot of difference to their bottom line?

For me, with my limited business knowledge that was obvious. We can all make a fuss about prices, quality of fine cast etc. but even that moaning, we're still buying the products, and GWs favourite customer, the child with well off parents aren't going to be put off. Y the prices. In fact they probably buy similar amounts.

In my view, again limited, while from the outside we may think cheap prices equal more sales and more profit, it doesn't appear to work that way. The football club I support for example, the CEO we've had for the past three or four years has gone about charging as much as he can get away with.npush prices up, even if you lose a few sales you still make more money. If GW put the price of a tactical squad so they make £8 profit (random figures here) and they sell 1000 in a year, they've made 8000, if thy halved the price/profit they need to sell double, even if they just made 6 profit, they need to sell another 500 to make that £8000, can they do that? Probably not, cheaper price doesn't mean we all need more tactical marines...

Automatically Appended Next Post:

PsychoticStorm wrote:So in the year that they released a new paint range and a new expensive rulebook for their most successful game system, they managed to get just 7,7 million more revenue, I am not that impressed.

I also like how they count units sold, when they should say units shipped, since the LGS may or may not have sold the vast amounts of paint they were required to buy.

I'm fairly sure the profit year ended before the new rule book was out. Also a paint range, from a miniature company that doesn't even dominate the paint market (I think) shouldn't boost profits by that much in my opinion...

Next years figures will be similar, if only because of the 40k rule book. And even better of the Hobbit range does well.

**Baragash**

So take out the paint release because it's an exceptional event, remove the royalties from this year and last year and adjust this year's numbers for it being a 53 week year and then do a comparison.

Also note the segment performance of the UK as the best available guide for performance of the store chain - ie flat.

**Pacific**

Well.. good to see that things are not bleak. As much as I have absolutely abhorred GW's business practice over the last couple of years, and lost a lot of respect for them as a company after Finecast, at the same time I don't want the high-street stores to disappear as I think they are essential (at least in the UK, the FLGS is only just making a comeback in some places) to get new blood into tabletop wargaming and miniatures.

Sadly this is not something that I can say too much about: keeping details of our
future releases secret until just before they are available to buy adds to the excitement and success of
each launch. In the last 12 months we have narrowed the disclosure window to the weekend before
release and sales of new products - and of White Dwarf which showcases the new products - have
been significantly higher as a result.

That's a great shame.. I guess for the 'target market' it might somehow work, but how does not telling customers about forthcoming products increase sales in any way?

Surely the presence of the multi-billion dollar industry called 'marketing' would like argue otherwise, or is it something specific to GW being king in a marketplace of one (in its own view?)

**notprop**

In retrospect (and not having read the report proper yet) this is all the more impressive (?) when you consider that this financial year also included the supposed failed releases of Dreadfleet and finecast.

I'm guessing that the paint, returns of Necrons and DE more than made up for this plus some WFB stuff.

6th ed 40k will be in 2012-13s report btw.

**cadbren**

Roll on the Hobbit already, I want to sell my LOTR minis.

**Druidic**

GW do spend a great deal on marketing, but they have the genius of making the consumer pay for it, its called White Dwarf! Rumour control in there closed business model actually makes sense for them, they are not creating NEW products, instead consider them UPGRADES. If you already own "stuff" and are considering buying "more stuff" they want you to buy thr "more stuff" AND the upgrade, but if you know 2-3 month in advance there is an upgrade comming, you will hold off buying "more stuff" which in the bigger picture actually harms their total sales. However their competitors instead need to convince you to spend on their NEW product instead, so need to tell you in advance so you don't buy "more stuff" but buy NEW stuff instead.

That is the level of their market dominance.

Dislike it, but equally impressed from a business stand point!

**Powerguy**

Until someone shows me some actual Sales data this really isn't that helpful tbh. Looking at their Revenue and Profit at face value doesn't show you the issues that GW have been having for the last couple of years. Their sales volumes have been falling consistently over the past couple of years and they have been masked by the continual price increases combined with cost cutting.

To get a proper understanding of the health of the company you need to look at the Sales figures across the last 5-10 years and then account for inflation and the annual price increase to work out roughly what their sales volumes are doing. You can keep a flat revenue for a while, but if sales volume keeps shrinking then eventually everything is going to fall over badly.

**RiTides**

Yeah, good on them from a business perspective. Credit where credit is due. Doesn't mean they couldn't do better if they made X obvious change, but with the Hobbit incoming, they're going to be fine financially.

**swalker91**

-Loki- wrote:
swalker91 wrote:It would've been interesting to know how many models were sold in comparison to last year. I guess a slight increase which isn't what a lot of people (including me) expected.

Thought the 15% reduction in cost per unit of paints was interesting, fairly certain they stayed the same price or went up in price for us? Can't remember though so maybe I'm just cynical! I wonder if production costs of other stuff has been reduced.

Lower production costs rarely result in the saving being passed on to the consumers.

Yeah sorry, was saying that by not passing that cut on they've further increased their margins. Therefore profit might be up but in terms of actual sales I wonder what the figures were like.

**reds8n**

http://investor.games-workshop.com/wp-content/uploads/2012/07/Final-group-accounts-3-June-2012.pdf

full report.

.. few thing spring out..

CHAIRMAN’S PREAMBLE
My favourite graph in our internal reporting shows the sales in each country going as far back as we have records. 1988, I believe. The
really great part about it is that it has over 20 years of data. You can see proper trends over 20 years, and if your intention is to build a
business that lasts, which mine always has been, then ‘long term’ means decades.
What does the graph show? It shows our rapid increase of sales in the 90s when we opened a lot of stores in the UK and a lot of businesses
around the world. The UK line then shows a period of consolidation as that growth demanded we sort out our manufacturing and
warehousing. Then we enter a short surge due to our intoxicating Lord of the Rings tie-in (everywhere except the US, interestingly enough)
followed by a long hangover in Europe and a shorter one in the UK. Recently we have been flat and very recently trending upwards again.
Looking closely at the trend lines reveals interesting strategic information. The gradient of the US growth changed dramatically when we
switched from using distributors to going direct to retailers; if you are considering such a move, do not hesitate. It is impossible to see
where various electronic games devices were released, or the effect they have had on our sales. Each of these devices supposedly heralded
the end for our antiquated miniatures - oh ye of little faith.
Underneath the main country based sales are the exciting slow but steady growth lines of Forge World and Black Library. And just recently
the graph has been enhanced by the appearance of a red line at the bottom. I use fairly crude (and so, memorable) colour association for
the lines. Red is China.
Why is this so interesting? First, it shows that even as we are very intent on the future growth of the business so we are constantly looking
at our record to learn what not to do, and what to do again. Second, it gives perspective to our view that short-term issues are short-term.
Third, it underlines what I said earlier: when we say we are a long-term business we mean it. We cannot guarantee to be around in 50
years time, but we certainly intend to be.
Short-termism is one of the evils of modern society. More shareholder value is destroyed by managers making dumb short-term decisions
to enable them to produce glowing quarterly reports than ever is gained in the laughably inappropriately named ‘transparency‘ they are
supposed to bring.
If you would like more transparency on Games Workshop, come to our annual general meeting. You will see our facilities, and maybe be
quite surprised by how interesting they are. You will get to meet all the people who do the important things and talk to them about their
jobs. You will also get, if such is your desire, a foaming pint of Bugman’s best in our famous bar. No, shareholders do not get a discount on
beer. We don’t do discounts, not even for you.

Just under 2,000 employees, of which 114 are in design and development, up from the 90 odd last year.

**ironicsilence**

Pretty in line with what I expected, people can bash GW all they want but from a purely business stand point the bean counters know how to turn a profit. Time will tell how long the bean counters can continue making profit with decisions that dont make sense to the gamers...however thats a statement made every year and they seem to continue to do well

**Davylove21**

Flashman wrote:I'll give them some grudging respect for addressing the secrecy issue but I still don't believe the approach works any better than a decent marketing campaign.

It's much cheaper than a decent marketing campaign and is in itself, marketing.

**DaNewBoy**

Look like all those armchair CEOs got some splainin' to do!

Gonna be some good ones I'm sure...

**RiTides**

@ironicsilence- Agreed... but just to point out, doing well doesn't mean doing as well as possible.

If I'm a total jerk and I sell water in a desert, I'm going to make a profit. But that doesn't justify being a total jerk- maybe I would have sold a bit more with better salesmanship.

And yes, I think it's an apt analogy for gamers

. Although there's more and more watering holes in the desert now. I have spent hardly anything on GW this year (pretty much just the 40k rulebook), but have invested significantly in Brushfire, Warmachine, and Dropzone Commander. The new 40k rulebook turning a blind eye to competitive gaming isn't going to help that trend of veteran gamers moving on, either.

I know their bread and butter is, supposedly, new recruits. And seemingly, GW can continue to profit mostly on their backs. But other companies will pick up the slack that GW leaves, and cater to more veteran gamers.

**ironicsilence**

RiTides wrote:@ironicsilence- Agreed... but just to point out, doing well doesn't mean doing as well as possible.

If I'm a total jerk and I sell water in a desert, I'm going to make a profit. But that doesn't justify being a total jerk- maybe I would have sold a bit more with better salesmanship.

And yes, I think it's an apt analogy for gamers . Although there's more and more watering holes in the desert now. I have spent hardly anything on GW this year (pretty much just the 40k rulebook), but have invested significantly in Brushfire, Warmachine, and Dropzone Commander. The new 40k rulebook turning a blind eye to competitive gaming isn't going to help that trend of veteran gamers moving on, either.

I know their bread and butter is, supposedly, new recruits. And seemingly, GW can continue to profit mostly on their backs. But other companies will pick up the slack that GW leaves, and cater to more veteran gamers.

I still firmly believe that GW is going to be around as long as there stores stay open, in my few its the only real edge they have going. Till one of the other games floating around finds a decent way to get people doing intro games I dont see anyone ever over taking GW. I know PP used to have press gangers and they did a decent number of events but I have seen one of those in my area in a long time, so not even sure if they are still around.

I might be the minority but im less likely to pick up a new mini game without first playing the system so see if its any good. Not to mention the worry of wondering if I start playing game X will I find anyone in my area to play with.

GW never has to worry about those things since they run intro games and can always offer a local gaming community (not saying anything on the quality of the community)

Also I would imagine that with the economy as it is, a parent is more likely to spend money on something there kid got to try and seemed to like vs a shot in the dark on an unknown game

**Captain Avatar**

Some of the paint profits were from players buying up the old colours in order to have exact matches for theie existing armies. The new paints have been doing ok but not spectacular in the 3 cities that
I visit in my travels

I am also wondering, From where is the rest of their revenue coming from?
Reason I ask is because a few years back, I seem to remember that, GW had some Forge World orders being filled and shipped from china but that factory is not listed in their holdings.

What I am getting at is, "Could it be possible that GW has maintained its profit margin these past few years by quietly selling off holdings and production facilities made redundant by recent stream-lining measures?"

And could such sales be used to "pad" the bottom line?