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 lord_blackfang wrote:

 RatBot wrote:
Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.

Actually, this time they said they'll make more money starting with the year after the next.


Automatically Appended Next Post:

 insaniak wrote:

richred_uk wrote:
Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.

In 2013, on sales of 134597k, CoS was 36772k - 27.3%

In 2014, on sales of 123501k, CoS was 36766k - 29.8%

So despite all of their streamlining and cost-cutting, cost of sales went up?

Something seems awry.

Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.

Yeah good catch, I've got my manufacturer head on, not my retailer head when looking at CoS and my gut is thinking that the costs are all variable and forgetting the huge fixed costs their retail network has.

Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.

KommissarKarl wrote:
Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.

Which is part of why their predatory treatment of independent retailers is so bad. There are very few overall GW stores in the US.

To summarize.

Sales down 8.2%
Op Profit down 42.3%
Op Margin down 5.8%

Even if you buy into the spin of the 4.5MM in special, one time expenses, it still looks like this:

Sales down 8.2%
Op Profit down 21.1%
Op Margin down 2.2%

If the Op Margin was steady, even with the adjustment, one could at least say that the business is maintaining margin while, while retracting on sales. However, they lost both sales and margin, while jacking up the prices and releasing higher volumes and big name content. Declining sales is a very bad indicator of the state of the business. Trying to claim a mulligan and loosing margin after your mulligan is pretty pathetic too.

It's nice to start the morning off on a good foot though.

 Kilkrazy wrote:
It is the sales decline that is worrying, not the profits decline.

Well, technically their sales went up compared to previous half-year. Positive spin~~!!
Of course they're quite a bit down compared to previous year....


Automatically Appended Next Post:

 insaniak wrote:

So despite all of their streamlining and cost-cutting, cost of sales went up?

Something seems awry.

Their operating expenses went down to £71 million, from £77 million year before.

Re: the website, multi-million pricetag does not seem unusual. Mark & Spencer spent a year and a half, and £150 million for their new webstore. Now admittably, they're multi-billion corporation, but gives you an idea what it can cost.

At my second job my manger had a saying. It was a very special saying, and one he only said when things were going really badly. What was that saying you ask? Well I include it in every post I make:




Should I change the attributed person to Tom Kirby?

 insaniak wrote:

richred_uk wrote:
Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.

In 2013, on sales of 134597k, CoS was 36772k - 27.3%

In 2014, on sales of 123501k, CoS was 36766k - 29.8%

So despite all of their streamlining and cost-cutting, cost of sales went up?

Something seems awry.

Cost of sales went down by £6m in absolute terms. As a percentage of sales it went down, because there were less sales. So they are cutting back, but not fast enough to offset the falling sales.

 H.B.M.C. wrote:
At my second job my manger had a saying. It was a very special saying, and one he only said when things were going really badly. What was that saying you ask? Well I include it in every post I make:




Should I change the attributed person to Tom Kirby?

I assumed that was your personal "tribute" to him anyway...

But it's one thing to joke about it, and another to see Kirby actually behaving like that.

Has anyone got a link to the report?

 H.B.M.C. wrote:
Has anyone got a link to the report?

http://investor.games-workshop.com/wp-content/uploads/2014/07/Games-Workshop-Group-14-combined-FINAL.pdf

Edit - Never mind

 Callarthis wrote:

 H.B.M.C. wrote:
Has anyone got a link to the report?

http://investor.games-workshop.com/wp-content/uploads/2014/07/Games-Workshop-Group-14-combined-FINAL.pdf

Danke.

Greatest factual statement of the entire document:

Tom Kirby, GW CEO wrote:Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things
are otiose in a niche.

So how can you FREAKING TELL who is buying your models when you don't even know/do any research?

Has The Future of Games Days and Games Workshop: part 15 been posted yet?

In part 14 of our mini-series, I tried to see what the crystal ball had to say on how much profit GW would lose in this year's financials. And I estimated it to be 42%.

Turns out that profits are down 42%. OK, some may say it was a lucky hunch, but I am gonna say: "I told you so."

A summary pic thanks to Taco Bell:



Looks like that blunderbuss attempt at licensing the 40K IP to every shovelware mobile game maker paid off, to the tune of an extra £400k.

From the Strategic Report section:

Niche market customers are pretty thin on the ground and they need to be searched out all over the world.

Sounds like you should do some market research to make sure you go to the right places then

Also,

In other words, I doubt you'll find our products in Toys ‘R’ Us or Walmart.

How can you say that not being found in massively successful stores, visited by thousands of people every day, including families, is a good thing?!

 WarOne wrote:
Greatest factual statement of the entire document:

Tom Kirby, GW CEO wrote:Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things
are otiose in a niche.

So how can you FREAKING TELL who is buying your models when you don't even know/do any research?

And Kirby's rousing counter to this would be:

We assume GW is losing customers, but it could be that everyone is simply buying less. We don't know, and nor do GW, who boast that they do no market research but in almost the same breath claim they sell only to white middle class 16-35 males. How do they know that? It's just assumptions based on prejudices. Where's the distribution of sales within that? Who is buying what? Who are you losing? Where as they going? Are they spending it on Malifaux or X-Wing? Kirby doesn't even think Pokemon exists. GW doesn't know because they ignore competition, don't survey customers and have shut down online avenues for customer feedback.

The boneheaded arrogance on display is astonishing. In years to come GW will be a ruin, bought out for it's IP, everything else wasted. And it'll all be online like an incredibly slow train crash dissected over however many years it takes before the business is unsustainable.

As for the Alan Merritt thing mentioned earlier. I heard long ago that some at GW makes a lot of money from royalties on Space Marines. I don't know if that's true because it sounded a bit suspect, but it's probably something like that. He goes and he could be uncooperative in allowing them to continue using something he has rights to.

 Grimtuff wrote:

 H.B.M.C. wrote:

xraytango wrote:
I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.

Well, let's just say that you don't know what I know and leave it at that. I can't really talk about it, and while the shift in attitude is something I'd welcome, I do wonder what else would change and that worries me more.

I'm guessing Merrett own something significant to 40k's background and would take his ball home with him if he ended up going via a bit of "involuntary redundancy".

Merrett owns nothing to do with 40K. If he had any claim to it, he obliterated it with his CHS testimony.

 WarOne wrote:
Greatest factual statement of the entire document:

Tom Kirby, GW CEO wrote:Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things
are otiose in a niche.

So how can you FREAKING TELL who is buying your models when you don't even know/do any research?

This is the most ridiculous thing of all to me. If you don't do research or know what the market wants, how the feth are you selling to them?

Also, updated OP to add link to the report and Future #15 for the lulz

Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.

 WarOne wrote:
Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.

That makes it par for the course then, doesn't it?

weeble1000 wrote:

 Grimtuff wrote:

 H.B.M.C. wrote:

xraytango wrote:
I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.

Well, let's just say that you don't know what I know and leave it at that. I can't really talk about it, and while the shift in attitude is something I'd welcome, I do wonder what else would change and that worries me more.

I'm guessing Merrett own something significant to 40k's background and would take his ball home with him if he ended up going via a bit of "involuntary redundancy".

Merrett owns nothing to do with 40K. If he had any claim to it, he obliterated it with his CHS testimony.

I would have thoughts all rights belong to the business, and ownership of anything is only in shares. You do not let individuals own things - or you have no business.

Yes, GW owns the IP, not Merrett. That wasn't what I was implying though, and I've set Grimtuff straight via PM. We can all move along now.

WayneTheGame wrote:

 WarOne wrote:
Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.

That makes it par for the course then, doesn't it?

It's not even on the frickin' greens!

It's more like Bill Murray rigging explosives on the golf course trying to kill that gopher in Caddyshack. It borders on insane.

KommissarKarl wrote:
Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.

Don't put in a lot of effort because next year they are changing the reporting to by channel rather than splitting out the geographical regions.


Automatically Appended Next Post:
Cost of Sales is basically the money spent to produce goods for sale. An increase in CoS means they either produced more units, or got less efficient in producing them. Given the number of large launches in the year, and 7th edition near the end, I think the over-production is a big part of the reason.

@ HBMC goto page 3 under business model, it's the bit I posted earlier.

 Kilkrazy wrote:
Exactly.

Kirby and his board of kronies will choose the new CEO. Kirby will continue to wield huge influence as chairman.

Nothing is likely to change until the current strategy is proved to be a false one. That could take another year or two, by which time GW's financial position may be under water.

Yeah, like I said in my previous post, his statements about the hiring process only seem to make sense if it's an internal candidate -- and probably a relatively green one based on Kirby's "resumes don't matter" rant.

Backfire wrote:

 Kilkrazy wrote:
It is the sales decline that is worrying, not the profits decline.

Well, technically their sales went up compared to previous half-year. Positive spin~~!!
Of course they're quite a bit down compared to previous year....


...

The second half of the year included Christmas, Knight Titans, Imperial Guard, Tyranids, Stormtroopers and 7th Edition.

 lord_blackfang wrote:

Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.

Actually, wages were significantly lower. They eliminated "all" of their middle management, closed all the regional HQ's in Europe, and went to one-man stores allowing for further reduction in work force and associated wages. The majority of these things were done in the 2013-2014 fiscal year.

So, their expenses did go down (that being the entire point of the "streamlining"), but the reduction of costs couldn't keep up with the reduction in sales.