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So Gw's half year financial report came out and it's an interesting read in places (outside of the legal mumbo jumbo)

Revenue is up, as expected.
It talks of warhammer community.com the videos as important.

I find mostly the risk part interesting.
Supply chain is mentioned (you know stuff going out of stock)
the model range:

Range management - we are reviewing our range to ensure that we are exploring all opportunities.
The risk is that we don’t fully exploit all the opportunities that are available to us. We have
strengthened the team and a new Global Head of Merchandising will be joining us in February 2018.
Distractions - this is anything else that gets in the way of us delivering our goals.

So they at least know they have to ensure a diverse range.
It mentions brexit as being too early to predict.

No mention of rules whatsoever anywhere in the statement only models and Black library ,not unusual or unexpected but still telling.

https://19485-presscdn-0-14-pagely.netdna-ssl.com/wp-content/uploads/2018/01/2017-18-Press-Statement-final-for-IR-site.pdf

I really, really hope the talk of diversification includes Print On Demand rule 'archives'.

We've already had Rogue Trader, and now Slaves to Darkness. Whilst old and doddery as rule sets go, they're still cracking reads, Realms of Chaos in particular. And the Orky ones.

For me, it's particularly interesting to see the 'constant currency' comparison. We're not seeing a Brexit assisted boom here. We're seeing a genuine resurgence in their sales.

Nice to see at least a mention of re-recruiting lapsed customers. As a former till monkey, pretty much anyone can recruit completely new blood. But to re-engage a previous hobbyist can be tricky. Some just move on completely from the TTG hobby, others go to different games. So there's no one 'come back' bat you can hit them with. Though Necromunda and Blood Bowl are pretty close!

Sorry, commenting as I read through....

The greatest risk is the same one that we repeat each year, namely, management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule. I will do my utmost to ensure that this does not happen

One suspects that's a dig at someone in particular. There is an obvious name that springs to mind, but who knows for sure.

Interestingly, North American retail seems to be doing quite well. Given the relatively low number of GW stores in that neck of the woods, the chain took in £10,321,000. Compare to the UK on £13,077,000, and something seems to be going right over the pond. I'd say that's a clear sign that the retail model in the US is actually doing better than in the UK on a store-for-store basis (especially as Warhammer World is included in the UK sales)

I found this part interesting:

"The greatest risk is the same one that we repeat each year, namely, management. So long as we
have great people we will be fine. Problems will arise if the board allows egos and private agendas to
rule. I will do my utmost to ensure that this does not happen"

I think we all knew this was an issue but nice to see it in print.

I like Rountree - he is doing a great job so I hope he is appreciated by both the board and shareholders.

This report also reads so much better than previous ones - nice to see them acknowledging there are still outstanding issues but they seem to be on top of them.

ninja'd by Mad Doc.

Still makes me smile when they acknowledge that talking to their customers is a priority as it is a primary driver in the recent expansion. Who'd a thunk...! Goober Merritt and that taxman CEO who finally bollocksed everything up must be grinding their teeth somewhat.

Talking to their customers is no good if they aren't perceived to be listening.

 zedmeister wrote:
Still makes me smile when they acknowledge that talking to their customers is a priority as it is a primary driver in the recent expansion. Who'd a thunk...! Goober Merritt and that taxman CEO who finally bollocksed everything up must be grinding their teeth somewhat.

Whilst enjoying the return on their stock from policies they either wouldn't have thought of or wouldn't have implemented.

I shall help them out further by buying some Orlock boxes.

Range management - we are reviewing our range to ensure that we are exploring all opportunities.
The risk is that we don’t fully exploit all the opportunities that are available to us.

Plastic Sisters!

 zedmeister wrote:
Still makes me smile when they acknowledge that talking to their customers is a priority as it is a primary driver in the recent expansion. Who'd a thunk...! Goober Merritt and that taxman CEO who finally bollocksed everything up must be grinding their teeth somewhat.

I doubt it. Kirby did everything possible to push short term profits until he walked out the door with a big fat bonus, and now he'll still own enough shares to be ecstatic about the rapidly rising dividends. Either way he's laughing.

Interesting that the factory struggling to keep up with demand and it's expansion is confirmed. I think that qualifies as a good problem to have

The recruiting website and tools is also something interesting coming up. Wonder what that'll be

So the rumours were true, the lack of stock is due to their overwhelming success. Interesting problem to have

Indeed!

It's still a definite problem though. And one could argue it's worse than your existing stock not selling.

If your existing stock isn't selling, you can do sales and other incentives.

If you can't keep up with demand, and that becomes the status quo, you're missing out on sales and narking off those you supply as that will impact their livelihood as well.

Good news here of course is that GW seem to have the cash reserves to spend on new infrastructure. Whilst it mightn't be an immediate thing, few would expect it to be.

Who knows what the solution might be? Perhaps a factory in Australia at long last? Satisfy that demand without the shipping inherent?

As much as I dislike the current board gamey and ccg deckbuilding direction that 40k and AOS went in, the numbers speak for themselves and show that that is wanted and people are paying money for.

So congrats to them.

Hoping they reopen their NA facility in Memphis... Maybe even bring back World of Battle (a.k.a. NA Warhammer World). Who knows, maybe we'll even see a NA Warhammerfest - I really miss Games Day.

I need to stop myself, I'm getting too excited at the prospect of such things.

Europe is getting it's own Warhammerfest this year, so who knows!

 Mad Doc Grotsnik wrote:
Europe is getting it's own Warhammerfest this year, so who knows!

Oh really, where?

Dusselldorf, 18 and 19 August.

I remember the Barcelona ones... oh, the times where GW cared about Spain, doing special warhammer fantasy miniatures around Lustria that where only sold in the peninsula, etc... those where the good times.

Now we don't even have White Dwarf in spanish

 Mad Doc Grotsnik wrote:
Interestingly, North American retail seems to be doing quite well. Given the relatively low number of GW stores in that neck of the woods, the chain took in £10,321,000. Compare to the UK on £13,077,000, and something seems to be going right over the pond. I'd say that's a clear sign that the retail model in the US is actually doing better than in the UK on a store-for-store basis (especially as Warhammer World is included in the UK sales)

Overheads on the high street, I expect. I'd think that running a store in a UK town costs more than in the US.
Also, coverage. With a GW store in every other UK town, that would cost more than a single sore per state (or however widely spread GW stores are in the States). Fewer, bigger stores would be able to get more sales per.

 xttz wrote:

 zedmeister wrote:
Still makes me smile when they acknowledge that talking to their customers is a priority as it is a primary driver in the recent expansion. Who'd a thunk...! Goober Merritt and that taxman CEO who finally bollocksed everything up must be grinding their teeth somewhat.

I doubt it. Kirby did everything possible to push short term profits until he walked out the door with a big fat bonus, and now he'll still own enough shares to be ecstatic about the rapidly rising dividends. Either way he's laughing.

Capitalism.

The stores don't seem to be any bigger though?

They're taking in more money per capita than the UK ones. And the UK ones I'm aware of are all doing quite nicely as is.

I heard that they're having some electrical issues in their area of Nottingham, which is why we see so much Out of Stock stuff on the webstore. I'd imagine it's crunching their on-demand model if they can't print miniatures day and night to keep up with increased demand.

Funny seeing this report, having read all the prior ones for the last decade or so.

Kirby invested nothing in infrastructure for the last few years (if I remember correctly, he sold off a fair bit), in particular manufacturing.
It suited things at the time since their decisions were not driving sales.
Especially no studies were conducted and definitely no listening to customers.

So now, they are making good decisions, sales has gone up but the lack of manufacturing capacity is biting them in the butt.
I hope the new management are pointing out all the short term thinking in the past is inhibiting their "delivering on our goals" to their "buddy".

Really interesting statement by the CEO:

"The greatest risk is the same one that we repeat each year, namely, management. So long as we
have great people we will be fine. Problems will arise if the board allows egos and private agendas to
rule. I will do my utmost to ensure that this does not happen."
...
"Tom Kirby retired from the board at the 2017 AGM (Note: September 2017 - Tal) and Nick Donaldson was appointed as non-executive
chairman. There have been no other changes to the board since the annual report for the
year to 28 May 2017. A list of all current directors is maintained on the investor relations website
at investor.games-workshop.com.

By order of the board

K D Rountree
CEO

R F Tongue
Group Finance Director

9 January 2018"

The report certainly gives a warm and fuzzy feeling even not being an investor.
The commitment to customer engagement (that still seems pretty focused on one-way though...) is better than it was.

Nurglitch wrote:
I heard that they're having some electrical issues in their area of Nottingham, which is why we see so much Out of Stock stuff on the webstore. I'd imagine it's crunching their on-demand model if they can't print miniatures day and night to keep up with increased demand.

From what I recall, the exact issue with the electricity was quite ambiguous. It's either they need to rewire the factory, get an additional feed in, or the local grid itself needs an upgrade.

In terms of likelihood, I suspect it's the middle option - they're at capacity for what's coming in, so need to arrange an additional supply.

I only quickly fingered through the thing but it seems like all is going well (insofar for GW at least). I hope this turn around will signal the upper heads to NEVER do what they did during the Kirby era ever again.

As for manufacturing, I'm not as worried as most people are. During the Kirby era their demand was hilariously low and so had little reason to have a large production line. To negotiate such deals with new manufacturers to meet demand can be something that takes months, if not a year or two, to fully set up. I've waited over a decade for this change, I can wait a bit longer for them to get it sorted. I'd prefer paying for good products, especially if rushing them will result in another Failcast fiasco.

Hmm, they are also probably reluctant to over invest into manufacturing, in case demand settles down as 8e continues on. Or maybe they plan to take a more aggressive stance to ensure interest stays up. I've been impressed by the sheer number of new armies and units they are putting out, it may be they legitimately intend for this to become the norm.

 MechaEmperor7000 wrote:
I only quickly fingered through the thing but it seems like all is going well (insofar for GW at least). I hope this turn around will signal the upper heads to NEVER do what they did during the Kirby era ever again.

As for manufacturing, I'm not as worried as most people are. During the Kirby era their demand was hilariously low and so had little reason to have a large production line. To negotiate such deals with new manufacturers to meet demand can be something that takes months, if not a year or two, to fully set up. I've waited over a decade for this change, I can wait a bit longer for them to get it sorted. I'd prefer paying for good products, especially if rushing them will result in another Failcast fiasco.

Manufacturing is largely done in-house, with only a relative few (notorious) terrain kits outsourced to China (why, I dunno!)

So it's their own foundry that's at capacity. Whether the answer is to expand that, or bring in a contractor, who knows? We've little idea of the actual skill and machine precision level needed for the quality they aim for. It could genuinely be they don't feel anyone else out there either has the mix of capacity and skills to share the load.

Plus, the more you outsource, the easier it is for others to knock off your products. If the moulds are all kept under lock and key at your own premises, it's that much harder.

 Mad Doc Grotsnik wrote:
Sorry, commenting as I read through....

The greatest risk is the same one that we repeat each year, namely, management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule. I will do my utmost to ensure that this does not happen

One suspects that's a dig at someone in particular. There is an obvious name that springs to mind, but who knows for sure.

Wasn't this exact verbiage used in the last financial report? I seem to recall Dakka thinking it was a sick burn that time too, perhaps it's just Roundtree's mantra.

 Earth127 wrote:
The risk is that we don’t fully exploit all the opportunities that are available to us.

I'm hoping this means GW finally recognizes they have huge swathes of players waiting for models for their armies that they are not tapping into. The vast majority of 2017 was marines/chaos. The vast majority of new products coming from Forgeworld in recent years is marines/chaos/horus heresy. Meanwhile SoB, guard, xenos players are basically using models from 3rd edition. I'd likely be a few thousand dollars poorer if they would actually release models for the armies I collect.

 Captain Joystick wrote:

 Mad Doc Grotsnik wrote:
Sorry, commenting as I read through....

The greatest risk is the same one that we repeat each year, namely, management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule. I will do my utmost to ensure that this does not happen

One suspects that's a dig at someone in particular. There is an obvious name that springs to mind, but who knows for sure.

Wasn't this exact verbiage used in the last financial report? I seem to recall Dakka thinking it was a sick burn that time too, perhaps it's just Roundtree's mantra.

The problems that Roundtree is addressing was caused by both of his predecessors- Tom Kirby and Mark Wells.

Wells ran the company to profits in unsustainable ways. He's responsible for a lot of GW cancelling good things that we liked, as well as alienating the online retailers and funneling sales through the online store. He knew it was unsustainable- that's why he left when he saw there wasn't any more fat to cut, and no more sales to funnel to direct.

Kirby was left holding the potato, and tried to keep doing what Wells had done. Of course, there weren't any more corners to cut, there weren't more sales to funnel through the online store, so the profits were simply dropping, while Kirby was left bewildered. I mean, this tactic had worked for Wells, right?

The risk is that we don’t fully exploit all the opportunities that are available to us.

Unfortunately that could mean anything from dipping into movie franchises to selling stylized woolen socks to old people