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Pretty much, they lost some more off their profit margin and stocks are taking a bit of a hit due to it.

At the rate of this fall, the stock price might go under it's 2014 low set in FebruaryMarch of this year.

http://www.lse.co.uk/AllNews.asp?code=jcj9xozw&headline=Games_Workshop_Shares_Down_As_It_Warns_On_Sterling_Hit_To_Profits

LONDON (Alliance News) - Games Workshop Group PLC saw its shares fall Monday after it said it now expects its operating profit for the first half to be slightly lower than last year, hit by the strong pound.

Shares in the maker of miniature figures and gaming sets were down 6.7% Monday morning at 506.99 pence, after it said that while trading in the six months to end-November has been "broadly in line" with its expectations when reported at constant currency, its taking a sterling hit at actual rates.

"The company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported," the company said.

Games Workshop said that it now expects to report a first-half operating profit GBP1 million lower than the prior year, when reported at actual rates. For the first-half of last year it generated an operating profit of GBP11 million.

The company said it will releases its half-year results on January 14, 2015.

http://investor.games-workshop.com/2014/12/08/trading-statement/#more-%27

Games Workshop Group PLC announces that trading in the six months to 30 November 2014 at constant currency has been broadly in line with the Board’s expectations and 2013/14 first half performance.

The Company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported. The adverse impact in the six months to 30 November 2014 will result in operating profit at actual rates being approximately £1 million lower than 2013/14 first half performance.

The Company’s half yearly report for the six months to 30 November 2014 will be released on 14 January 2015.

Well that's... interesting.

This report will be VERY interesting.

Can economics folks explain this a little more for us laymen? Is it a result of declining profits or does it have to do with the strength of currency?

I'm looking foreword to see who is passive aggressively attacked in the next report.

 WarOne wrote:
Pretty much, they lost some more off their profit margin and stocks are taking a bit of a hit due to it.

At the rate of this fall, the stock price might go under it's 2014 low set in FebruaryMarch of this year.

http://www.lse.co.uk/AllNews.asp?code=jcj9xozw&headline=Games_Workshop_Shares_Down_As_It_Warns_On_Sterling_Hit_To_Profits

LONDON (Alliance News) - Games Workshop Group PLC saw its shares fall Monday after it said it now expects its operating profit for the first half to be slightly lower than last year, hit by the strong pound.

Shares in the maker of miniature figures and gaming sets were down 6.7% Monday morning at 506.99 pence, after it said that while trading in the six months to end-November has been "broadly in line" with its expectations when reported at constant currency, its taking a sterling hit at actual rates.

"The company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported," the company said.

Games Workshop said that it now expects to report a first-half operating profit GBP1 million lower than the prior year, when reported at actual rates. For the first-half of last year it generated an operating profit of GBP11 million.

The company said it will releases its half-year results on January 14, 2015.

Is that right ? Have they got their years confused ?

2012/13 First half profit was 11m
2013/14 First half profit was 7.7m
2014/15 First half proft is 6.7m ?

 Las wrote:
Can economics folks explain this a little more for us laymen? Is it a result of declining profits or does it have to do with the strength of currency?

What I'm concerned about is the math that GW seems to be relying upon.

"The company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported," the company said.

http://www.x-rates.com/graph/?from=GBP&to=USD&amount=1.00

http://www.x-rates.com/graph/?from=GBP&to=EUR&amount=1.00

The British pound was incrementally increasing for the first half of this year against the dollar, then plunged around July to levels lower than the start of 2014 in value versus the dollar. The Euro does lose ground against the pound in that same period, but would it be enough to make a difference?

Everything's totally in line with board expectations. Yep, truly:

Down 30p at the mo - around 6.5%.
Got 44 shares myself so this is bad news for me :(
However I usually get around £12 dividend a year which, for a £200 investment, is still pretty good esp compared to savings accounts in the UK.

So, operating profits are down 1 million pounds from the previous 1/2 year. Last year was 11million pounds so that makes this year's 1st half 10million or another about 10% drop in operating profits. I remind you that this is in part taking into account GW releasing a new rules version for its flagship game, 40K. January will give us a clearer picture of whether GW has entered a death spiral or not.

In the Chairman's Preamble for the annual report, Kirby had this to say:

Games Workshop has had a really good year.
If your measure of 'good' is the current financial year's numbers, you may not agree. But if your measure is the long-term
survivability of a great cash generating business that still has a lot of potential growth, then you will agree.

Cash generating business only applies with growth, Mr. Kirby; sure your company is still profitable but less so than previous years. I wouldn't be so upbeat if my pay was cut 10% every 1/2 year....


Edit:
Something to keep in mind as well is that Operating Profit does not equal net profit (which Dividends are paid from); Net Profit is more than likely substantially lower as it will be reduced for taxes paid and extraordinary costs but might be increased by extraordinary gains; these would be items infrequent and unusual in nature.

I wonder if the board really believe their endless parade of excuses, or if they just think everyone else is daft enough to. EDIT: Oh and agnosto, you're correct about operating vs net profit, but don't think for a moment it will seriously affect dividends, they've borrowed money to pay those before and, given that the board have a vested interest in dividends getting paid due to their own shares as well as their knowledge that the share price overall lives or dies based on continuing to churn them out every year, they'll do it again.

 agnosto wrote:
So, operating profits are down 1 million pounds from the previous 1/2 year. Last year was 11million pounds so that makes this year's 1st half 10million or another about 10% drop in operating profits. I remind you that this is in part taking into account GW releasing a new rules version for its flagship game, 40K. January will give us a clearer picture of whether GW has entered a death spiral or not.

In the Chairman's Preamble for the annual report, Kirby had this to say:

Games Workshop has had a really good year.
If your measure of 'good' is the current financial year's numbers, you may not agree. But if your measure is the long-term
survivability of a great cash generating business that still has a lot of potential growth, then you will agree.

Cash generating business only applies with growth, Mr. Kirby; sure your company is still profitable but less so than previous years. I wouldn't be so upbeat if my pay was cut 10% every 1/2 year....


Edit:
Something to keep in mind as well is that Operating Profit does not equal net profit (which Dividends are paid from); Net Profit is more than likely substantially lower as it will be reduced for taxes paid and extraordinary costs but might be increased by extraordinary gains; these would be items infrequent and unusual in nature.

Last year (i.e., first half of the 2013-2014 FY) was £7.7m in operating profit. The year before that was £11m.

What I'm really interested in, though, is to see how the revenue is doing.

"Broadly in line", eh? That's always nice to hear.

Ok, so last January it was the changeover to one man stores and the associated disruption, despite this being a long (ish) term scheme that was entirely within their control and hadn't been mentioned in advance at all.

The year end report it was down to spending money on sacking people and restructuring, but that was ok because now they'd done that they were in a much better place moving forward.

This time its currency fluctuations, despite the fact that currency hasn't fluctuated in an especially dramatic fashion (nothing outside of the ordinary sort of stuff that happens over a given period to the best of my recollection.)

On each occasion trading has been "broadly in line with management expectations."

It appears the only people GW consider dumber than their customers are their shareholders.

 Thud wrote:


Last year (i.e., first half of the 2013-2014 FY) was £7.7m in operating profit. The year before that was £11m.

What I'm really interested in, though, is to see how the revenue is doing.

Thanks for the correction, I must have misread it.

I'll be interested in seeing the January report as well; it will indicate whether the decline is a reality or a blip because it will include the release of 7th and all of the "End Times" stuff that keeps "selling out". (note: I put sell out in parenthesis because GW has proven to be unable to gauge interest in their products since they, you know, don't participate in market research nor care what the market has to say."

Now, I'm no businessologist, but if profit is falling, would it generally indicate either a corresponding drop in revenue, or a stable revenue hit by expenses or other factors?

In this case I suppose the other factors being the currency, as they claim.

7th's first release weekend was already accounted for in the last reports, which will take the edge off it's impact in his one.

I'm also interested in the revenue, I'm fairly certain it will be down again, if GW had been spending a lot of cash on anything I'd be surprised if we hadn't heard anything about it, and I'm wondering how much further it would need to drop before we reach tipping point.


Automatically Appended Next Post:

 Blacksails wrote:
Now, I'm no businessologist, but if profit is falling, would it generally indicate either a corresponding drop in revenue, or a stable revenue hit by expenses or other factors?

In this case I suppose the other factors being the currency, as they claim.

Kirby could just be spending it on hookers and blow.

I guess it all depends on how "broad" that line is. And if they are using TLoS to view the endpoint.




Automatically Appended Next Post:

 Blacksails wrote:


Kirby could just be spending it on hookers and blow.

Finecast was just a smuggling ploy to get Chinese narcotics through customs? It isn't really "plastic", it is "crackstic"?

I am Interested in it

Now now guys, it could be that after cutting costs like madmen they've decided to take on additional costs and not pass the costs...

I can't finish it.

 Azreal13 wrote:

Kirby could just be spending it on hookers and blow.

Best company weekend teamwork retreat ever.

This is Great News!!


...That is all.

Uh oh.. currency fluctuated 0.5%.. Better raise prices by 15%

Those poor Antipodeans better brace themselves to take it in the tailpipe once again!

 Azreal13 wrote:
Those poor Antipodeans better brace themselves to take it in the tailpipe once again!

If revenues really have continued to fall, I think everyone will be in for a sphincter-expanding experience in the new year.

 jonolikespie wrote:
Well that's... interesting.

This report will be VERY interesting.

Actually it sounds like it will be another boring, disappointing report all around - sales equating to weak late-2013 (which was supposed to be just a 'blip' and company was meant to turn around...) but not bad enough to vindicate those who are expecting the company to fold any minute.

What a pile of guff the GW comments on this are

Backfire wrote:

 jonolikespie wrote:
Well that's... interesting.

This report will be VERY interesting.

Actually it sounds like it will be another boring, disappointing report all around - sales equating to weak late-2013 (which was supposed to be just a 'blip' and company was meant to turn around...) but not bad enough to vindicate those who are expecting the company to fold any minute.

What?! All none of them?!!

Today ending value was 510 dropping down from 542.50 that is -5.90%

Can we start to say finally "THE SKY IS FALLING!!!"...???

Is this the moment that GW's crops wither and die, its children piteous deaths?

Like most people, I haven't a clue when it comes to net profits, gross profits, currency flow etc etc

So, in one friendly sound bite, can anybody answer this question: is this GW's inevitable decline and demise?

No, not yet.