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Backfire wrote:

 shasolenzabi wrote:

Page 6 Earnings per share June was down to 14.5 Pence per share, down from either 25pps and 36.1pps

It's properly compared to same period in last FY: in this case:
14.5p per share 2014
17.7p per share 2013
25.6p per share 2012

...not real positive development even if the profit's still good.

IF I had shares in GW, I would not be pleased with this drop in shares performance, and likely sell shares to bail myself off the sinking ship. It is practically a 50% decrease since 2012, well 45% but sill a chunky decrease in 2 yrs based on how many shares one has invested in a company that refuses to change to fix it's own situation for the better by staying with what is now been shown to be failing them.

Is it too simplistic to say GW was a great company when it concentrated, from the very top down, on making great models and great rules, because all that passion and energy positively oozed out of their shops and website, but ever since the focus moved to profitability and dividends and the like, it has been downhill all the way?

Seems like that to me, but I'm no businessman.

 Kilkrazy wrote:
GW nearly always pay a dividend. They have been known to take on debt to pay a dividend.

Well, dividends are what most investors are after. Growth and rising share prices are nice, but it's the annual cash what most investors expect to get out of their invested money. In that sense, supporting the dividend is keeping the investors happy and preventing stock price plummet.

Of course just focusing on stability and dividends is a bit poor business. Most big long-term companies have always been at least somewhat opportunistic and looking for new ways to expand. In that sense, GW's 'business as usual' -style doesn't look too good, especially when the miniatures hobby has been expanding without them, lately.

Looks pretty much steady - sales are down in their own stores, but they closed a net 4 of them, and fewer sales at warhammer world during the rebuild. sales elsewhere are stable.

Impact of currency clouds the waters a bit.

Overall - no growth but still making money.

This report is pretty consistent with what a lot of people have been saying- GW will continue to lose net profit as their goods outpace cost expectations and the amount they can squeeze out of their shrinking player base lessens as that population becomes fed up with continuous extra (and often pointless) purchase needs. WHFB priced itself out of the market a while ago; what's the point of buying the pretty new Wood Elf Eternal Guard when you're going to have to put them in blocks of 30+ to make them worth fielding? You won't even get to see all those finicky details on the kits! Now that WHFB is purportedly down to 8% of the total profit, all of their chips are in 40k and licensing (generally of 40k).

They're spreading 40k out trying to induce more sales in ways that IMO customers aren't interested in. Make armies require multiple $50 codices, invalidate armies with each new rules release and *then* speed up the release cycle of those books. Force superheavies and other big units into the game in the guise of "open gaming," further devaluing people's armies (that $40 box of Space Marines is doing less and less on the field now...other than being blown up instantly by Knights).

40k is a very popular tabletop game (the most popular, to be fair), but GW is strangling their golden goose to get the eggs they want. I think it's just going to lead to a continually shrinking player base and the company is going to eventually find itself behind other players like Privateer Press. Maybe that's where they want to be- selling boutique-cost kits in high quantities for over-bloated games. But I don't think their position is at all inviable.

What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.

 brendan wrote:
What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.

I'm assuming this was directed at me. Would you like to bring forth your own reasons why GW is experiencing report-on-report profit drops?

 brendan wrote:
What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.

Everyone can come up with whatever narrative that they wan't, doesn't change the fact that GW continues to loose sales, profits and customers in an otherwise growing market.

I especially like this part:

. Our current initiatives of ever better weekly
new product releases, the low cost one man stores in retail and the stockist programme in trade, are
designed to lead to growth.

Funny how GW has done nothing but shrinking ever since those initiatives were implemented!

No embarrassing preamble? Shame. Just the gradual decline as predicted.

 MWHistorian wrote:
No embarrassing preamble? Shame. Just the gradual decline as predicted.

I don't how they could have topped such memorable quotes like "Our crops will wither, our children will die piteous deaths and the sun will be swept from the sky. But is it true?"

Isn't the preamble reserved just for the annual report?

It usually is. Still, what a shame there is none.

What are we looking at release wise for GW so far?

The leftover sales of 7th that didn't make the cut for the annual report, one of those campaign books/sets, the Space Wolf book, Ork book, GK book, DE book and BA book? On the fantasy side, I guess a bunch of End Times stuff, though I keep up less on that side so someone else can fill in.

That's a not an insignificant amount of new releases, and from some decently popular factions (three marine books).

I'm no businessologist, but that's not a good thing if revenue is still down despite a ramping up of releases.

 Blacksails wrote:
What are we looking at release wise for GW so far?

The leftover sales of 7th that didn't make the cut for the annual report, one of those campaign books/sets, the Space Wolf book, Ork book, GK book, DE book and BA book? On the fantasy side, I guess a bunch of End Times stuff, though I keep up less on that side so someone else can fill in.

That's a not an insignificant amount of new releases, and from some decently popular factions (three marine books).

I'm no businessologist, but that's not a good thing if revenue is still down despite a ramping up of releases.

Arguably because of the inflated prices GW now sells everything at no amount of new releases will up sale. I never see people starting new armies because of new releases like they did back in pre-2012. More and more people are just buying the bear minimum to keep their armies current

I remember when I started in 5th how people rushed to start new space wolf, blood angels, and dark eldar armies when this new books and models can out.

By the time 5th ed Grey knights came out you still saw the rush of new armies, but not as crazy as it was.

Now with prices at their highest I almost never see veteran player start a new army because of a new army book.

 Blacksails wrote:
What are we looking at release wise for GW so far?.

Roughly these are the releases you are looking at in comparison.

June - Nov 2013

(Tau with the immensely popular Riptide a month before the period starts)
Jun - Codex Eldar with Wraithknight
Jul - WH 40K Apoc with Khornemower and Necron Super-lith
Aug - Fantasy Lizardmen
Sep - Space Marines with Centurions
Okt - Fantasy Dark Elves
Nov - Fantasy Dark Elves


June - Nov 2014 (don't fit the "monthly" as neatly, but about this)

(Tail end of 7th Edition, released late in May)
Jun - Orks with Gorkanaut
Jul - Stormclaw & Space Wolves
Aug - Grey Knights & Nagash
Sep - Space Hulk
Okt - Dark Eldar
Nov - Glottkin / Leviathan

Not really surprised. I wonder how the pro-GW people will spin this.

See, this is what it's going to be. They aren't going to go bankrupt anytime soon, but if they lose 6% sales every 6 months, how long before they're spending more money than they're making?

 Baragash wrote:
Fall in magazine sales......Visions must be heading towards life support then.

That would assume it wasn't stillborn to begin with.


Automatically Appended Next Post:

 H.B.M.C. wrote:
Guess it's time for that Hail Mary pass with the new Warhammer, hey?

Clearly, the lather/rinse/repeat 7th edition 40k early cash grab didn't do the trick so they have to do something new (besides... you know... addressing the actual problems).


Automatically Appended Next Post:

ORicK wrote:

The main problem really is that there are shareholders, they want profit growth instead of profit. That whole economic model is slowly coming to an end, GW cannot do anything about that, but still has to bear the consequences of it.

The shareholders who matter (namely Kirby and Friends on the board of directors) just want dividends and short term gain to cash out before they retire. They're not apparently interested in the long term health of the company, IP, and community.

WayneTheGame wrote:

See, this is what it's going to be. They aren't going to go bankrupt anytime soon, but if they lose 6% sales every 6 months, how long before they're spending more money than they're making?

Continuous annualized 6% sales declines would basically cut the company in half in 12 years.

What sticks out to me is that currency is driving about a 4% bogey (only down slightly less than 2% in local currency terms). The US$ is monstrously stronger so that shift is understandable, but it really speaks to the geography of GW's sales if they're that reliant on the NA market.

Backfire wrote:

 shasolenzabi wrote:

Page 6 Earnings per share June was down to 14.5 Pence per share, down from either 25pps and 36.1pps

It's properly compared to same period in last FY: in this case:
14.5p per share 2014
17.7p per share 2013
25.6p per share 2012

...not real positive development even if the profit's still good.

Bah! Kirby said that only isn't positive if you measure growth by things like money. If the lord of the moat and master of yet to be stolen pigs says so, it must be true.

I see the new web site didn't earn them a penny. Sales inline with prior year

Retail down by 9.7, due to restructuring. Trade up, but not by the same amount.
So instead of buying from elsewhere, people chose to walk away from the game

Can one of the mods reading this (or the OP) change the thread title to show that the NEW report for 1/2015 is on page 21? It looks like the separate thread for the new report was locked so it might be a good idea for those wishing to see the new info to know where to look in the somewhat lengthy thread.

I realize it is likely that it's been in every report but I just noticed they breakdown sales based on the venue. Indy store sales (including book sellers for magazines and such) are around 40% of the total and roughly almost double that of the online store. I would have thought it was actually a bit more (around 50-60%). I wonder if that percentage has changed over the past few years that they've been on a steady and slow decline. I'd suspect that more folks unhappy with GW and their changes/ideas/priorities would stop buying at FLGS where there is an alternative within arm's reach (namely the other games the stores likely stock) rather than the exclusively single minded venues of their own stores and their website.

Rountree via the report wrote:For this reason, the principal risks and uncertainties for the balance of the year lie in the ability of the sales channel managers to deliver sales growth and for the product and supply chain to maintain gross margin.

OMG. They still think their retail and trade sales people are going to close enough business to return the company to growth. While they intentionally reduce their store hours, cut staff and make trade sales terms more stringent (like the banning of all online sales in Australia).

GW will continue their slow slide into irrelevancy with falling sales year over year all the while blaming their retail employees:

During the six months to 30 November 2014, we closed a net four stores (12 opened and 16 closed). We need to improve the rate of recruitment of competent new store managers on a consistent basis.

There couldn't be issues with the product or their pricing strategy could there? No... it's the lack of competent new store managers who just can't push the plastic hard enough to meet the sales goals.

We need to improve the rate of recruitment of competent new store managers on a consistent basis.

Does this mean the recruitment of competent managers is inconsistent.?

Or they consistently recruit incompetent managers. ??

So frozen wastes you noticed that aswell. Nice way to talk about your staff.

Insert comment about hiring for attitude not skill here...

With so much stuff going 'direct-only' it renders their stores useless. I've not been in a GW store in years. Last I did I was told what I wanted wasn't available and I'd have to mail order (and pay postage) or order in store and come back. As I didn't live in that area, they got no sale.


Automatically Appended Next Post:
Also they don't really give any incentive to manage their stores. They've cut all the middle management so there's little prospect of promotion. And they aren't really managers because you don't 'manage' anyone. You run a one man shop. You don't get valuable management experience because you don't have any staff. It's on a hiding to nothing managing a GW store, you just get hideous sales targets thrown at you and sacked when you can't meet them.

 Howard A Treesong wrote:

Also they don't really give any incentive to manage their stores. They've cut all the middle management so there's little prospect of promotion. And they aren't really managers because you don't 'manage' anyone. You run a one man shop. You don't get valuable management experience because you don't have any staff. It's on a hiding to nothing managing a GW store, you just get hideous sales targets thrown at you and sacked when you can't meet them.

Come on Howard, that sounds like a dream job to me!

 loki old fart wrote:
We need to improve the rate of recruitment of competent new store managers on a consistent basis.

Does this mean the recruitment of competent managers is inconsistent.?

Or they consistently recruit incompetent managers. ??

So frozen wastes you noticed that aswell. Nice way to talk about your staff.

Really this is ironic, considering they fire managers who actually treat people like people and not like commodities.

I have nothing left to say. The trend continues, for the same reasons, the excuses are new, but the reasons aren't.

My thoughts:

It appears GWs base operating cost is 51.7MM. They show basically flat revenue if you buy the cooked number and 6% drop in revenue is you go off raw numbers. What is more concerning to me is that they lost 12% in profit, even with "Our current initiatives of ever better weekly new product releases, the low cost one man stores in retail and the stockist programme in trade" which have been well in effect for that last 6 months. This shows no signs of changing.

If you go by the revenue numbers and project a continued 6% loss in revenue, this time next year they will operating in the red. 56.5MM to 53.11MM to 49.9MM, takes 51.7MM to operate. It can probably go another 6 months if variable costs tracks closely, which is doesn't appear to based on the numbers.

They are also comparing half year to half year, which means to me the prior 6 months are worse as they should be in the report as well.

Flattening is another term for laying off more people.

Prospects section basically says their going to beat their store managers in order to drive sales. They are basically blaming poor sales numbers on having gak managers.

A question for those who follow markets and trading:

What do major investors tend to do when it looks like a company is tottering at the top of a slippery slope?

Is it:
1. Use their stake to try and persuade management to take a better course of action

or

2. Get out before it gets any worse?