GW Annual Report is Up -- Report discussion starts on pg 12

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**Wayniac**

sand.zzz wrote:
WayneTheGame wrote:
I think I just found the captain of the white knights. From BOLS (where else?). I really hope this dude isn't serious:

Lol, guess the investor's in the London Stock Exchange don't read Bell of Lost Souls. While people want to get on here and scream profits are down, the sky is falling, etc. No one on here commented about the balance sheet in the annual report. First equation you learn in accounting is Assets - Liabilities = Owner's Equity. Owner's Equity is what a business is worth in other words. The stock price is climbing after the annual report. The company has an excellent cash flow statement, has added property, plant, and equipment. Yes, sales are down but the company is making gains in so many areas.

They had huge expenses closing the HQ, removing personnel, the legal battles they got tangled up in, or restructuring the entire company. I was pretty impressed when I saw the expenditures on things like the severance packages people received. In other words they admitted they couldn't keep paying the salaries, but they didn't leave people out in the cold. Take a look at the trending stock prices. It doesn't look too bad. Gains after the annual report was released should tell you the company is doing well.

Sooo.... next year should bring $100 Land Raiders, which will further erode the customer base, which will cause sales to decline, which will drive kit prices up, which will continue driving customers away...
If there were alternative mini wargaming options out there, GW would be in a heap of trouble eh?
Thank goodness stock prices are stable - take that competitors!

Right, if only there were alternatives to 40k that people could play instead. Oh well, time to go order me a dozen Stormwolf flying boxes or whatever it's called. Not like I can spend my money on something else.

**Azreal13**

Compel wrote:
It is odd that the share price has had a decent jump as a result of this, though.

I wouldn't expect a nosedive (even for the ignorant me, that would seem too sensible), but I would have thought mostly flat-ish would be ok.

The shares closed up 5%.

5.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.

**Wayniac**

Azreal13 wrote:
Compel wrote:
It is odd that the share price has had a decent jump as a result of this, though.

I wouldn't expect a nosedive (even for the ignorant me, that would seem too sensible), but I would have thought mostly flat-ish would be ok.

The shares closed up 5%.

5.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.

Agreed. It seems like most of the shares are basically like investment groups who just have some in there to diversify their portfolios, so barring a major drop it's not likely to see much issue as if it was an individual.

**AtlasTelamon**

What I don't understand is their lack of realization that events such as golden demon, games day. Promotion through hobby related web articles and the great work of the studio did more to generate profits then anything that has come since the demise of these things. Infact you could probably produce charts that prove this.

Knowledge of the hobby is essential for good business. How is the company going to grow if it has no interest in it's product. This last point should have been clear when their stocks dropped because they released a tyranid codex that was utterly opposed to what people wanted.

**Kilkrazy**

WayneTheGame wrote:
I think I just found the captain of the white knights. From BOLS (where else?). I really hope this dude isn't serious:

Lol, guess the investor's in the London Stock Exchange don't read Bell of Lost Souls. While people want to get on here and scream profits are down, the sky is falling, etc. No one on here commented about the balance sheet in the annual report. First equation you learn in accounting is Assets - Liabilities = Owner's Equity. Owner's Equity is what a business is worth in other words. The stock price is climbing after the annual report. The company has an excellent cash flow statement, has added property, plant, and equipment. Yes, sales are down but the company is making gains in so many areas.

They had huge expenses closing the HQ, removing personnel, the legal battles they got tangled up in, or restructuring the entire company. I was pretty impressed when I saw the expenditures on things like the severance packages people received. In other words they admitted they couldn't keep paying the salaries, but they didn't leave people out in the cold. Take a look at the trending stock prices. It doesn't look too bad. Gains after the annual report was released should tell you the company is doing well.

Actually that is all true, but the key point is falling sales.

If sales continue to fall everything else will become sackcloth and ashes.

The absolutely crucial thing the report failed to address was why sales are falling and what is the company going to do about it.

(The share price of a failing company with lots of cash can rise because investors expect a hostile takeover.)

**Barfolomew**

Azreal13 wrote:
The shares closed up 5%.

5.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.

I tend to agree. I find it very odd that an annual report comes out that is basically very negative and the CEO sounds like a raging alcoholic, yet no one dumps their stock. To me this seems like people who have bought into a pile, now realize they bought a pile, but don't want to be the first off the ship and loose money. I also think there is a chance that the people who are invested have no idea what is actually going on and are buying into Kirby speak and/or waiting on the new CEO.

**Backfire**

Azreal13 wrote:

The shares closed up 5%.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.

Few percents here and there is not signifant reaction for a stock which is not traded much (for Microsoft, it would).
Basically, markets already had priced in the poor report, warned by January report. So a crappy financial report now (maybe slightly less crappy than expected) was no surprise to which market had need to react.

**Mr. Burning**

Sillycybin wrote:
What I don't understand is their lack of realization that events such as golden demon, games day. Promotion through hobby related web articles and the great work of the studio did more to generate profits then anything that has come since the demise of these things. Infact you could probably produce charts that prove this.

Knowledge of the hobby is essential for good business. How is the company going to grow if it has no interest in it's product. This last point should have been clear when their stocks dropped because they released a tyranid codex that was utterly opposed to what people wanted.

I hate to keep banging on but this...

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.

..Should tell you everything you need to know. They use fairly dangerous language (IMO) when they talk about their customers as well.

The 'hobby' is selling the best quality miniatures in the world - made by GW. That's it.

If you had no knowledge of GW and were presented with the about us text of GW you would assume that they are in the same market as Hummel figurines, Sideshow WETA, and other collectible merchandise.

The game is a distant after thought.

**xxvaderxx**

I think that the key line people are missing is:

Pre-tax profit £12.4m down from £21.4m
Combined with this
Revenue £123.5m down from £134.6m

That is almost 50% profitability lost, and sales changed from flat lining to decline.

Both put together = deep gak.

**Azreal13**

Nobody's missing that dude....

**xxvaderxx**

Mr. Burning wrote:

The 'hobby' is selling the best quality miniatures in the world - made by GW. That's it.

If you had no knowledge of GW and were presented with the about us text of GW you would assume that they are in the same market as Hummel figurines, Sideshow WETA, and other collectible merchandise.

The game is a distant after thought.

Little tribia fact, having the best cars in the world, did not save Ferrari from being bought by Fiat.

**wuestenfux**

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.

Now I will look at the new releases in a different way.

Moreover, its clear why they don't talk to their customers. There is simply no need to do it. They wouldn't exploit their statements.

**Azreal13**

xxvaderxx wrote:
Mr. Burning wrote:

The 'hobby' is selling the best quality miniatures in the world - made by GW. That's it.

If you had no knowledge of GW and were presented with the about us text of GW you would assume that they are in the same market as Hummel figurines, Sideshow WETA, and other collectible merchandise.

The game is a distant after thought.

Little tribia fact, having the best cars in the world, did not save Ferrari from being bought by Fiat.

Sorry, don't mean to be constantly correcting you, but Ferrari weren't exactly making the best cars in the world when they were purchased, and being purchased isn't necessarily a bad thing, especially in the auto industry where the enormous R+D costs can be diffused over multiple marques and platforms, just like being purchased wouldn't necessarily be a bad thing for GW, depending on who the buyer was and what their intentions were.

**Blacksails**

Azreal13 wrote:
Nobody's missing that dude....

Well, there are people deliberately missing it because poor Britn-GW is doing fine.

GW is a strong, independent business who don't need no profit margin.

**AtlasTelamon**

Well then someone will grab the company or the i.p. hopefully there are job openings with whoever does.

**weeble1000**

agnosto wrote:
Welcome the new CEO, Merritt...

Yea...GW would go down in flames.

"I don't know. Yes. No. I'm sorry. I don't know what -- I'm not sure what I'm thinking here at the moment. What I'm thinking is actually they're octopussy -- octopussy kind of tentacle heads, but it's not a literal copy."

There's your Alan Merrett. One. Job. To. Do. and that's the performance he gives.

**gorgon**

Sillycybin wrote:
What I don't understand is their lack of realization that events such as golden demon, games day. Promotion through hobby related web articles and the great work of the studio did more to generate profits then anything that has come since the demise of these things. Infact you could probably produce charts that prove this.

Knowledge of the hobby is essential for good business. How is the company going to grow if it has no interest in it's product.

I disagree - knowledge of the hobby really isn't required by top management. GW's products aren't truly special snowflakes. (In fact I think Kirby keeps up this pretense to make himself seem irreplaceable.) Looking at your examples, there are other companies selling to niche markets who understand the value of face-to-face customer interaction at shows, engage in community building and support, etc. IMO, a fresh, outside perspective is what's required at GW.

This last point should have been clear when their stocks dropped because they released a tyranid codex that was utterly opposed to what people wanted.

You really believe that?

**Compel**

I do think GW is different enough, to be honest. Especially if you do want to keep the GW storefronts and do them properly.

You would probably need somone that has an understanding, for example, on how Gaming Stores that play pokemon / MTG / digimon etc work, to make a good run of it.

An understanding that it's not a case like it is right now in the one man stores of 'buy toy, then get the hell out' but there is a focus of 'buy toy, come back and spend time there, then buy more toys.'

I imagine someone with Leisure experience (like a Golf or Cricket equipment chain) might have a good idea too.

So yeah, not exactly a special snowflake business, but a different enough business that you would want someone running it that has experience off the beaten track.

**AtlasTelamon**

gorgon wrote:
Looking at your examples, there are other companies selling to niche markets who understand the value of face-to-face customer interaction at shows, engage in community building and support, etc.

This is knowledge of the hobby. These companies are successful. The hobby is the community. Thus knowledge of the hobby entails providing the community with what it wants. The only way you can provide this is if you understand what your selling.

To your last point, sure "coincidence" is abundant on earth.

**agnosto**

weeble1000 wrote:
agnosto wrote:
Welcome the new CEO, Merritt...

Yea...GW would go down in flames.

"I don't know. Yes. No. I'm sorry. I don't know what -- I'm not sure what I'm thinking here at the moment. What I'm thinking is actually they're octopussy -- octopussy kind of tentacle heads, but it's not a literal copy."

There's your Alan Merrett. One. Job. To. Do. and that's the performance he gives.

Yes he's an idiot but his idiot attorneys are at fault in that fiasco as well for not bothering to coach him at all prior to the trial.

As for going down in flames. If GW can be headed by Kirby and not immediately implode, Merrett couldn't do much worse and would easily be controled by Kirby and the board.

**Small, Far Away**

Feth it, we should each buy some shares, go to the AGM, and shout loudly until they get the damn point: we would like to give you our money, we're just not sure you want to give us anything in exchange.

I would really like to introduce my friends to a grimdark universe of space battles, but there's no way that's happening right now.

Edit: also, is anyone else really concerned about the poor sods who run the stores? Because I read this whole report feeling very worried about the guy who runs my local GW, who is basically a nice guy trying to do a job.

**Guildsman**

Small, Far Away wrote:
Feth it, we should each buy some shares, go to the AGM, and shout loudly until they get the damn point: we would like to give you our money, we're just not sure you want to give us anything in exchange.

I would really like to introduce my friends to a grimdark universe of space battles, but there's no way that's happening right now.

Edit: also, is anyone else really concerned about the poor sods who run the stores? Because I read this whole report feeling very worried about the guy who runs my local GW, who is basically a nice guy trying to do a job.

But, at the same time, that isn't the point anymore, not after this last report. Corporations are like cargo ships: they turn slowly. Even if Kirby had written a preamble that said something to the effect of "Feth, guys. We were totally wrong about everything. We're going to change course completely, starting now," there might not be enough time to turn things around. If this is as bad as Wayshuba and others have predicted, the fall will be rapid and dramatic.

**agnosto**

Instead we get a preamble that doesn't recognize a problem even exists...the first step is realizing there is a problem..

**Small, Far Away**

I guess that I know that really, but I feel that sitting around here pundit-ing and hoping for the best is a broadly useless thing to do.

**Asherian Command**

By the looks of it they are stuck on the denial stage of grief.

**Theophony**

Barfolomew wrote:
Azreal13 wrote:
The shares closed up 5%.

5.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.
I tend to agree. I find it very odd that an annual report comes out that is basically very negative and the CEO sounds like a raging alcoholic, yet no one dumps their stock. To me this seems like people who have bought into a pile, now realize they bought a pile, but don't want to be the first off the ship and loose money. I also think there is a chance that the people who are invested have no idea what is actually going on and are buying into Kirby speak and/or waiting on the new CEO.

Or they realize how bad it is and they are waiting patiently for the others to offload their stock cheap, snatch them up and take over with less effort, which could be what Kirby has planned for himself. Drive the ship down far enough where everyone hops off, take the money you have set aside for such time, and do a buyout when it's at it's lowest taking it private again. Then he/they can hope that they haven't ruined the IP so much that they can re-release all the old stuff like the specialist games, be done with the Hobbit anchor and get the business running again.

**Mr. Burning**

Theophony wrote:
Barfolomew wrote:
Azreal13 wrote:
The shares closed up 5%.

5.

Honestly, that's essentially zero reaction. As I said earlier, over 60% of the shares are owned by a combination of institutions and staff, not the sort of owners likely to dump stock at the drop of a hat, all the flighty types already got scared away in January.
I tend to agree. I find it very odd that an annual report comes out that is basically very negative and the CEO sounds like a raging alcoholic, yet no one dumps their stock. To me this seems like people who have bought into a pile, now realize they bought a pile, but don't want to be the first off the ship and loose money. I also think there is a chance that the people who are invested have no idea what is actually going on and are buying into Kirby speak and/or waiting on the new CEO.

Or they realize how bad it is and they are waiting patiently for the others to offload their stock cheap, snatch them up and take over with less effort, which could be what Kirby has planned for himself. Drive the ship down far enough where everyone hops off, take the money you have set aside for such time, and do a buyout when it's at it's lowest taking it private again. Then he/they can hope that they haven't ruined the IP so much that they can re-release all the old stuff like the specialist games, be done with the Hobbit anchor and get the business running again.

This probably isnt too far from the truth - I have thought it for a while.

Send company under then buy out select parts (IP Head Office and Manufacturing) in either a pre pack admin or as head of an investment shell.

As it stands I don't think anyone would take on the company in its present active form.

**Do_I_Not_Like_That**

agnosto wrote:
Instead we get a preamble that doesn't recognize a problem even exists...the first step is realizing there is a problem..

You gotta admit that preamble did provide some wonderful signature material

Maybe I'm acting all white knight here, but GW is a tough old girl.

It survived the Thatcher years. It survived the Reagan years. It survived John Major's black Wednesday. It survived Graham Taylor's England regime!

Point is, it's a survivor and I'll always have a soft spot in my heart for it...please get me a violin

I confidently predict that this time next year that GW will still be around, Kilkrazy will be generously translating all that accounting/annual report stuff into something I can understand, Weeble will still be lamenting Alan M's courtroom performance

, H.B.M.C et al will still be predicting the end of GW, and I'll be writing a post which is 99% similar to this one.

If not, I'll bare my backside in front of GW HQ

**Small, Far Away**

We'll hold you to that

**Do_I_Not_Like_That**

Small, Far Away wrote:
We'll hold you to that

If it comes to pass and GW collapses, I'll be halfway to some banana republic that doesn't have an extradition treaty, before anybody on dakka can hold me to my promise!

Back OT. The more I think of it, the more likely it seems Alan Merrit will be the new CEO. From Kirby's view, it's the logical choice.