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 ironicsilence wrote:
the timing does seem odd for someone to buy 17% voting rights in the company

I read the exact opposite here:

"Situation previous to the Triggering transaction: 5,829,141"
"Resulting situation after the triggering transaction: 5,629,141"
"Threshold(s) that is/are crossed or reached: 18%"
"Percentage of voting rights: 17.74%"

Someone (an institutional investor) sold shares, not bought them. Someone who previously owned more than 18% had to file because they sold and now have less than 18% (17.74% to be exact).

200,000 shares were sold, not purchased.

Who the someone is: Nomad Investments, one of the institutional investors that holds a good chunk of GW's shares.

Cynical part of me is thinking: 6th Edition 40k was released in this 6 month reporting period. 40k is the single most played wargame in the world, and every player needs the rulebook (or easy access to their friend's rulebook).
I can't think of what major release (if any) GW had in june-december 2011.

However, this is countered by the fact that GW obviously spaces out their releases so the sales spikes are normalised over time. For every summer where 40k is released, there is a summer where 4 separate army books are redone.

Australia is back to profit. Yay. Biggest growth regions in terms of revenue are North America and Other (Forgeworld, Black Library, Digital Sales). Does digital sales count all online orders, or just digital products? I assume the latter.

Also, Nomad crossed the line for 18/17%. They changed their ownership. They did not buy 17% (or 8 million pounds today) - unless they recently sold everything to buy it back. By corporate rules they are required to report changes in their holdings. They owned more at the time of the year end report (though probably a dividend play).

Edit - agustin just said it.

Palindrome wrote:
a slow steady decline leading to an eventual collapse/buy out is the most common prediction.

The evidence for which is a growing revenue, growing profits and growing margins.

I don't get why people who don't like GW seem intent on predicting their imminant demise. I hate Apple with a passion, I hate everything they make and I especially hate Steve Jobs (lol). But I can't see them going anywhere any time soon, even though they ran out of ideas about 4 years ago.

I don't think GW's current strategy is desirable in the really long term, but it'll keep working for quite a long time. They can keep increasing the prices and some customers will be lost, but their revenue will go up and their margins will be protected.

GW will be around for a long time and each annual price increase will bring them in more revenue (if only slightly) and a slightly shrinking customer base. It obviously can't go on forever, but I think they can double their current prices and they'll still sell enough to not lose money. I think they'll hit parity between GW plastics and Forge World and they'll still make their business work.

They'll just give up a bunch of market share in the process. Which is good for everyone.

 BryllCream wrote:

Palindrome wrote:
a slow steady decline leading to an eventual collapse/buy out is the most common prediction.

I don't get why people who don't like GW seem intent on predicting their imminant demise.

There's certainly an element of wishful thinking. For example, I hope that GW dies and the masses emerge blinking into the light; coming to realise that non-GW games aren't shifty entities to be feared and distrusted, but diverse creations that should be encouraged and tried. This would mean plenty of worthy games that struggle to get off the ground would have a more receptive player base, and some of the games I've tried to play in the last couple of years would have a longer than 2 month shelf-life.

Of course what's more likely to happen is that the 2nd hand market keeps the game going for some time and another company picks up the IP, but that's less useful to me.

 BryllCream wrote:

Palindrome wrote:
a slow steady decline leading to an eventual collapse/buy out is the most common prediction.

The evidence for which is a growing revenue, growing profits and growing margins.
.

Actually the evidence for that is steadily falling sales, which has been happening year on year for close to a decade now. Profits, revenue and margins now don't matter if less and less people are buying your products, especially in a market which requires a critical mass of customers to be truly successful. So yourself.

As I said already last year wasn't as bad as usual so its possible that they have turned a corner but I doubt it given that absolutely nothing has changed with their buisness model.

A core game and an accelerated release schedule is the change in business practice. Basically realising they can't recruit quickly enought they are going to try and turn over codices and rulebooks as quickly as possible. This is a gamble, on one hand it gets more money from existing gamers that want to stay up to date and introduce new "power" items in the range. For WFB 8th brought monstrous cav, super powerful and a unit people didn't already own meaning people are pushed to buy new items and rebuild and army with every edition rather than just update your books, it's the same with 40K 6th ed and fliers. The downside of this is people will more likely stick to one army per system if they are updated quicker and plenty of people will get off if the merry-go-round becomes to fast for them.

They have turned a corner if, and only if, they have both an increase in revenue and an increase in units sold, in real terms. They are close the last couple years, but they're still shedding volume in exchange for revenue. They need to grow both consistently to have really turned a corner.

UNCLEBADTOUCH wrote:
A core game and an accelerated release schedule is the change in business practice .

Thats not much more than peripheral changes and the accelerated release schedule is very likely to do with the Chapterhouse lawsuit and the very likely scenario that GW will lose, basically wave releases won't work anymore (if they ever did). GW needs a root and branch overhaul and I can't see that happening under their current management.

Didn't say it was a big change but it is a change. The greatest change from the chapterhouse POV is that they are trying to do full releases so all units are covered in one drop or very short time period rather than leaving some units unreleased over several editions. To be honest I don't see any overhauls in the near future though.

 BryllCream wrote:

Palindrome wrote:
a slow steady decline leading to an eventual collapse/buy out is the most common prediction.

The evidence for which is a growing revenue, growing profits and growing margins.

I don't get why people who don't like GW seem intent on predicting their imminant demise. I hate Apple with a passion, I hate everything they make and I especially hate Steve Jobs (lol). But I can't see them going anywhere any time soon, even though they ran out of ideas about 4 years ago.

Actually, their revenue has been rather flat for the past several years. Their margins and profits have grown largely due to downsizing their fixed costs as much as possible from their stores. They've cut costs as much as they can, all they have left is profit per widget which, despite the highly illogical ramblings of many people on this forum, is still subject to supply and demand and as such pushes people away as the price rises.

 Surtur wrote:

Actually, their revenue has been rather flat for the past several years. Their margins and profits have grown largely due to downsizing their fixed costs as much as possible from their stores. They've cut costs as much as they can, all they have left is profit per widget which, despite the highly illogical ramblings of many people on this forum, is still subject to supply and demand and as such pushes people away as the price rises.

Its not that GW goods don't follow supply and demand; its that the supply and demand graphs you learn in ECON101 are very simplified and ignore a few important points: lock-in and network effects.
1) GW products lock in veterans. There is a large amount on money and time sunk into the product, which has a comparatively low resale value. It is much easier to continue to buy 1-2 units when needed, than to start an entirely new army.
2) Network effects are very important for wargames; the value of a game is proportional to the number of people playing the game squared. In other words, Dystopian Wars is worth *nothing* to me because no-one in my area plays it, but 40k is worth *a lot* because every single person at my games club has at least one army.
Case in point: when the 'embargo' to Australia came into effect, most people at my games club took up different games which were cheaper. The problem was that everyone took up different games. We had 3 Warmahordes players, 4 Malifaux, 2 Firestorm Armada, 3 Dust Warfare... and after about 6 months of this, we all started bringing our 40k armies to the club again. Even though we wanted to switch, we couldn't without a concerted and directed effort by multiple people at a time.

... that being said your post is mostly correct; GW is cutting costs without significant increases in sales volumes (though GW does seem to be keeping on and on squeezing and still getting savings long after I thought it would have been wrung dry) .

Trasvi wrote:

1) GW products lock in veterans. There is a large amount on money and time sunk into the product, which has a comparatively low resale value. It is much easier to continue to buy 1-2 units when needed, than to start an entirely new army.

That depends, you can get a 1000 pt Bolt Action army (~50 inf, 1 vehicle, hmg, mortar) and the main rulebook for the cost of 2 Darktalons.

GW seems to be doing well with visions of the future looking bright:

http://www.ft.com/cms/s/0/18a3b430-6188-11e2-82cd-00144feab49a.html#axzz2IQwUdVg1

By Christopher Thompson

Games Workshop has lost its chief executive as the miniature model maker was boosted by brisk sales of toy soldiers in the US.

The company said Tom Kirby, Games Workshop’s chairman, would replace Mark Wells as acting chief executive until a permanent replacement is found.

Mr Wells spent five years at the company, whose recent robust sales of model orks, elves, ogres and wizards have helped it weather the consumer spending downturn relatively well.

“We discussed this for a while and Mark preferred a clean break,” said Mr Kirby, who added he would be in the job for at least a year until an internal candidate is found.

The departure comes as Games Workshop reported revenues of £67.4m in the six months to December 2, up from £62.7m during the same period in 2011, bolstered by increasing sales to American teenagers attracted to its fantasy world.

Pre-tax profits increased from £9.4m to £11m, while diluted earnings per share rose from 21.8p to 25.4p. The company announced an interim dividend of 18p a share, unchanged from last year.

The performance is a far cry from the beginning of 2011 when the City raised questions about Games Workshop’s long-term viability – particularly in the face of the strength of online gaming – after difficult trading conditions forced it to issue a profit warning.

However, in the company’s 2012 annual report Mr Kirby said the release of electronic games consoles such as the Nintendo Wii and Xbox 360 had a negligible impact on the group’s toys.

Last July the company reported full-year pre-tax profits of £19.5m, up 27 per cent, and raised its full-year dividend 40 per cent year on year.

The company, which opened its first shop in Shanghai in 2011, is targeting geographic expansion in Asia, continental Europe, the US and Australia.

“Wherever we go in the world we can usually find people who want to play with toy soldiers,” said Mr Kirby. “The cultural differences aren’t so important . . . teenage boys tend to like the same kind of things and toy soldiers fall into one of those universal categories.”

However, the North American market, where interim sales rose by £2.5m to £17.9m during the first half, has emerged as a particular focus.

“North America is going very well,” said Mr Kirby. “We’re looking at 700-800 stores in the US in the extreme long term and we’ve got 80 at the moment with plans to open 1-20 stores per year.”

Games Workshop shares closed unchanged at 660p.

Tom Kirby wrote:“We discussed this for a while and Mark preferred a clean break,” said Mr Kirby, who added he would be in the job for at least a year until an internal candidate is found.

Who could've guessed it!

 RiTides wrote:

Tom Kirby wrote:“We discussed this for a while and Mark preferred a clean break,” said Mr Kirby, who added he would be in the job for at least a year until an internal candidate is found.

Who could've guessed it!

Also...

Spawn of Satan a.k.a. Head of GW wrote:
“North America is going very well,” said Mr Kirby. “We’re looking at 700-800 stores in the US in the extreme long term and we’ve got 80 at the moment with plans to open 1-20 stores per year.”

Sooo...a GW at every corner?

 WarOne wrote:

“North America is going very well,” said Mr Kirby. “We’re looking at 700-800 stores in the US in the extreme long term and we’ve got 80 at the moment with plans to open 1-20 stores per year.”

Thats about as likely as my plan to own a pet dinosaur.

They just omitted the part where they plan to close 1-20 stores per year as well.

 WarOne wrote:
GW seems to be doing well with visions of the future looking bright:

http://www.ft.com/cms/s/0/18a3b430-6188-11e2-82cd-00144feab49a.html#axzz2IQwUdVg1

By Christopher Thompson

Games Workshop has lost its chief executive as the miniature model maker was boosted by brisk sales of toy soldiers in the US.

The company said Tom Kirby, Games Workshop’s chairman, would replace Mark Wells as acting chief executive until a permanent replacement is found.

Mr Wells spent five years at the company, whose recent robust sales of model orks, elves, ogres and wizards have helped it weather the consumer spending downturn relatively well.

“We discussed this for a while and Mark preferred a clean break,” said Mr Kirby, who added he would be in the job for at least a year until an internal candidate is found.

The departure comes as Games Workshop reported revenues of £67.4m in the six months to December 2, up from £62.7m during the same period in 2011, bolstered by increasing sales to American teenagers attracted to its fantasy world.

Pre-tax profits increased from £9.4m to £11m, while diluted earnings per share rose from 21.8p to 25.4p. The company announced an interim dividend of 18p a share, unchanged from last year.

The performance is a far cry from the beginning of 2011 when the City raised questions about Games Workshop’s long-term viability – particularly in the face of the strength of online gaming – after difficult trading conditions forced it to issue a profit warning.

However, in the company’s 2012 annual report Mr Kirby said the release of electronic games consoles such as the Nintendo Wii and Xbox 360 had a negligible impact on the group’s toys.

Last July the company reported full-year pre-tax profits of £19.5m, up 27 per cent, and raised its full-year dividend 40 per cent year on year.

The company, which opened its first shop in Shanghai in 2011, is targeting geographic expansion in Asia, continental Europe, the US and Australia.

“Wherever we go in the world we can usually find people who want to play with toy soldiers,” said Mr Kirby. “The cultural differences aren’t so important . . . teenage boys tend to like the same kind of things and toy soldiers fall into one of those universal categories.”

However, the North American market, where interim sales rose by £2.5m to £17.9m during the first half, has emerged as a particular focus.

“North America is going very well,” said Mr Kirby. “We’re looking at 700-800 stores in the US in the extreme long term and we’ve got 80 at the moment with plans to open 1-20 stores per year.”

Games Workshop shares closed unchanged at 660p.

I love how this sounds like the company is doing great but whoever is writing it clearly knows nothing about the hobby (constantly referring to them as Toys) as the whole and is basing their info of the same information that is being handed over to shareholders, which is being of course biased and ignores dwindling sales/the rise in popularity of other companies/how bad the hobbit is doing/etc.

 Surtur wrote:

 BryllCream wrote:

Palindrome wrote:
a slow steady decline leading to an eventual collapse/buy out is the most common prediction.

The evidence for which is a growing revenue, growing profits and growing margins.

I don't get why people who don't like GW seem intent on predicting their imminant demise. I hate Apple with a passion, I hate everything they make and I especially hate Steve Jobs (lol). But I can't see them going anywhere any time soon, even though they ran out of ideas about 4 years ago.

Actually, their revenue has been rather flat for the past several years. Their margins and profits have grown largely due to downsizing their fixed costs as much as possible from their stores. They've cut costs as much as they can, all they have left is profit per widget which, despite the highly illogical ramblings of many people on this forum, is still subject to supply and demand and as such pushes people away as the price rises.

More than that - this interim report doesn't even show growing profits. It shows some change year over year - but they aren't comparing the same period in both years. In 2011, Thanksgiving fell on the 24th of November and the 25th started the Christmas shopping season...3 days worth. In 2012, Thanksgiving fell on the 22nd of November...11 days worth of Christmas Shopping. Why does that matter?

The Christmas Shopping period in the US accounts for as much as 34% of retail sales for non-essential retail goods (excludes clothing and food). The absolute lowest on the list generates 14% of their annual sales in the period between Thanksgiving and Christmas (which if you do the math - would still be much higher than a simple even split of sales per month). GW is probably less than the highest, but probably not by too much. They are a toy store in the end after all. The addition of a week from that one month or so period which probably accounts for say 20% of their annual sales would likely be enough to account for a large portion of the 7% change year over year.

They no doubt have probably seen some increase - it would be hard not to. The digital products rollout, 6th Edition, Hobbit preorders should have all been on this 6 month period. A one handed monkey should have managed to put up these numbers.

Trasvi wrote:

 Surtur wrote:

Actually, their revenue has been rather flat for the past several years. Their margins and profits have grown largely due to downsizing their fixed costs as much as possible from their stores. They've cut costs as much as they can, all they have left is profit per widget which, despite the highly illogical ramblings of many people on this forum, is still subject to supply and demand and as such pushes people away as the price rises.

Its not that GW goods don't follow supply and demand; its that the supply and demand graphs you learn in ECON101 are very simplified and ignore a few important points: lock-in and network effects.
1) GW products lock in veterans. There is a large amount on money and time sunk into the product, which has a comparatively low resale value. It is much easier to continue to buy 1-2 units when needed, than to start an entirely new army.
2) Network effects are very important for wargames; the value of a game is proportional to the number of people playing the game squared. In other words, Dystopian Wars is worth *nothing* to me because no-one in my area plays it, but 40k is worth *a lot* because every single person at my games club has at least one army.
Case in point: when the 'embargo' to Australia came into effect, most people at my games club took up different games which were cheaper. The problem was that everyone took up different games. We had 3 Warmahordes players, 4 Malifaux, 2 Firestorm Armada, 3 Dust Warfare... and after about 6 months of this, we all started bringing our 40k armies to the club again. Even though we wanted to switch, we couldn't without a concerted and directed effort by multiple people at a time.

... that being said your post is mostly correct; GW is cutting costs without significant increases in sales volumes (though GW does seem to be keeping on and on squeezing and still getting savings long after I thought it would have been wrung dry) .

There are counter points to that though...well, not so much counter points - but additional factors which work against GW in the long term.

The veteran lock in does exist to some extent - however, when that veteran cracks...they generally are more vocal against the products then, say a veteran who played D&D for years and felt wronged by changes done by WotC. Because they have more invested, the level of "hatred" (not really the right word...but it is the best word I could think of this early) which they have towards GW is much higher. As a result, they are more likely to actively work against GW.

The network effect is also true - only so far as they maintain it though. Because of the higher entry costs - GW games have been falling in popularity for the past decade or so in the US. Similarly, the supply network is also important. In the US, that is primarily through your independent game stores. The article above mentions that GW wants to open 700-800 new stores in North America (I would guess the majority in the US). Many independent store owners will see that as a shot across the bow, and my well look at actively working against GW as well in order to maintain their livelihood. Without the stores, GW will have a hard time maintaining the player network. They don't have the capital to do a full rollout of stores across the country to make up for a dramatic drop in retailers.

Actually, their revenue has been rather flat for the past several years.

More than that - this interim report doesn't even show growing profits.

Actually the evidence for that is steadily falling sales

d'aww you guys.

http://www.scotsman.com/business/retail/games-workshop-chief-steps-down-after-unveiling-16-8-jump-in-profits-1-2745271

Revenues up 7.7%. Profits up 16.8%.

What is it about hating GW that warps the logic part of peoples' brains?

The network effect is also true - only so far as they maintain it though. Because of the higher entry costs - GW games have been falling in popularity for the past decade or so in the US. Similarly, the supply network is also important. In the US, that is primarily through your independent game stores. The article above mentions that GW wants to open 700-800 new stores in North America (I would guess the majority in the US). Many independent store owners will see that as a shot across the bow, and my well look at actively working against GW as well in order to maintain their livelihood. Without the stores, GW will have a hard time maintaining the player network. They don't have the capital to do a full rollout of stores across the country to make up for a dramatic drop in retailers.

Imho Gw is not that large to get 700 stores in the US. Think Everybody has forgotten their initial store launches back in 03 and since then the amount of stores have relatively been the same, just in different areas in the US. GW stores are generally affected by their leases, which they move on to another locale after a certain amount of time (generally 3 to 5 years) depending on the leases.

As people make fun over the years about Mark Wells, I think the last laugh will be from him. I don't have any animosity towards the man. He is definitely not a bad CEO compared to some I have dealt with through the years. He did his job according to Kirby's edicts and he will be compensated for it. I also think he will land another position sometime soon.

I seriously don't get some people's reasoning. You're shown a legal report showing increased profit in a company and somehow predict the company's going to just keel over any day now.

As for expansion in the US. I live in Oklahoma and they finally opened their first store in Oklahoma City; if there's a store in this backwater then their expansions strategy must be to become as widespread as possible.

I seriously don't get some people's reasoning. You're shown a legal report showing increased profit in a company and somehow predict the company's going to just keel over any day now.

Which as been viewed by those who have a financial/business background that are in the hobby.

Now just think. Without paying Mark Wells his monthly income GW has already made a monthly profit.

Brilliant!

 Adam LongWalker wrote:

Which as been viewed by those who have a financial/business background that are in the hobby.

And contradicted by other people with a financial/business background (if we're pretending for a moment that this argument from authority has any weight).

 BryllCream wrote:


Revenues up 7.7%. Profits up 16.8%.

What is it about hating GW that warps the logic part of peoples' brains?

The key here is that prices go up by between 5-10% per annum while GW's revenues have traditionally stayed fairly flat, therefore their total sales have been falling.

I haven't seen any detailed anlysis of their current results yet so I'm not sure if this year will be any different. GW is quite keen on creative accounting though so its entirely possible that the numbers quoted don't tell the whole story.

 Adam LongWalker wrote:

I seriously don't get some people's reasoning. You're shown a legal report showing increased profit in a company and somehow predict the company's going to just keel over any day now.

Which as been viewed by those who have a financial/business background that are in the hobby.

Now just think. Without paying Mark Wells his monthly income GW has already made a monthly profit.

Brilliant!

Meh. Works for me, I keep getting dividends so I'm not going to complain. I've held stock for about 4 years now and the value keeps going up (generally speaking), as an investor that's what I care about.

i'm not sure what this mean, as i am only a year into the hobby. Hopefully we get someone that is interested in writing clearer rules though, i guess, I'm pretty sure that has nothing to do with CEO though.

Palindrome wrote:

 BryllCream wrote:


Revenues up 7.7%. Profits up 16.8%.

What is it about hating GW that warps the logic part of peoples' brains?

The key here is that prices go up by between 5-10% per annum while GW's revenues have traditionally stayed fairly flat, therefore their total sales have been falling.

Prices weighted by what people actually buy didn't go up anything like 7.7%.