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Barfolomew wrote:
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.

Whoa. That doesn't paint a pretty picture...

alphaecho wrote:
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?

Company is so small in the grand scheme of things, most will get bail out in a slow manner. If someone gets a big enough share, they may try to sell the company, but I doubt any of them care enough to try to save the company.

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

Yes... wild tales of fancy and dime-store predictions from their fan-base that have ultimately been proven quite spot-on year over year over year for at least the past 3-4 years.

Actually.... I think by 'Drum up Narrative' you mean 'A lot of people who know the market and product intimately noting policy changes and their impact on sales and making very informed predictions that have been nearly uniformly correct'?

Cmon guys, go 4-5 years back, GW is exactly in the position the 'haters' were predicting it to be in... nearly to the letter. At a certain point it is not biased opinion anymore, merely rational observation of clear data and Stats student could project from.

Seriously, the whole idea that GW isn't failing on objective levels at this point is a bit ludicrous... I can understand a discussion of whether or not they can recover or what the severity of the problem is, but I can no longer understand debating whether there is a problem...

 MajorTom11 wrote:

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

Yes... wild tales of fancy and dime-store predictions from their fan-base that have ultimately been proven quite spot-on year over year over year for at least the past 3-4 years.

Actually.... I think by 'Drum up Narrative' you mean 'A lot of people who know the market and product intimately noting policy changes and their impact on sales and making very informed predictions that have been nearly uniformly correct'?

Cmon guys, go 4-5 years back, GW is exactly in the position the 'haters' were predicting it to be in... nearly to the letter. At a certain point it is not biased opinion anymore, merely rational observation of clear data and Stats student could project from.

Seriously, the whole idea that GW isn't failing on objective levels at this point is a bit ludicrous... I can understand a discussion of whether or not they can recover or what the severity of the problem is, but I can no longer understand debating whether there is a problem...

Nah couldn't be, GW is fine just it's the economy or just a group of haters. After all there's no competition since no other game is a large scale 28mm sci fi grimdark wargame with an Imperium, Space Marines, Tyranids and Eldar, so nothing can compare to 40k.




Automatically Appended Next Post:

Barfolomew wrote:
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.

Wow if that's true, then things may be really dire.

To show the decline in pre-eminence of GW from a not-hater standpoint, look at the Dakka forum menu. I would not know exactly how many of these forums and sub-forums did not exist 4-5 years ago, but it is a lot.

The gaming space is growing rapidly while GW reports falling sales and either side-lining or off-lining of major product lines (if even 1/4 of the WFB rumors prove true).

Waiting for the inevitable post of "that graph" with the predictable "Yeah GW is doing fine, look at the shares, look at the cyclesssssss".

Barfolomew wrote:

alphaecho wrote:
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?

Company is so small in the grand scheme of things, most will get bail out in a slow manner. If someone gets a big enough share, they may try to sell the company, but I doubt any of them care enough to try to save the company.

It depends on how much risk is built into the portfolio. Some will hold their shares for short-term dividend profit but they'll have to weigh that against the inevitable down pressure on the stock price due to GW being a less profitable company. Recall that a year ago we saw one major institutional investor divest themselves of their ownership which caused shifting I'm majority shareholders and a drop in share price. Shares closed at 500p but futures looks to be trading fairly heavily downward; we'll see in the morning.

master sheol wrote:
Today ending value was 510 dropping down from 542.50 that is -5.90%

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

Nope.

Hmmm.

Well, with their stupid pricing strategies and awful treatment of their front line staff, I can't say I am sorry to see this happen.

I hope their decline is a lesson for others, but I think it is clear that they just want to blame the shop staff for what are clearly strategic failures.

 SilverDevilfish wrote:
Waiting for the inevitable post of "that graph" with the predictable "Yeah GW is doing fine, look at the shares, look at the cyclesssssss".

As predictable as this post...

Here we go again.

 cvtuttle wrote:

master sheol wrote:
Today ending value was 510 dropping down from 542.50 that is -5.90%

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

Nope.

We can say that the sky is getting much closer to the ground though.

 MWHistorian wrote:

 cvtuttle wrote:

master sheol wrote:
Today ending value was 510 dropping down from 542.50 that is -5.90%

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

Nope.

We can say that the sky is getting much closer to the ground though.

The sky is lowering? 100% chance of fog.

 cvtuttle wrote:

 SilverDevilfish wrote:
Waiting for the inevitable post of "that graph" with the predictable "Yeah GW is doing fine, look at the shares, look at the cyclesssssss".

As predictable as this post...

Here we go again.

I'm sorry would you rather I have posted it with a meme generated image?

BOLS has the article up, and of course there's the typical "Show me other companies financials, it could be the entire industry that's struggling" and "People have been saying GW is failing for 10 years now, they'll be saying it for 10 more" type of comments already.

 Accolade wrote:

 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?

I thought it was a good analysis. It's kind of obvious, really. These consecutive reports all add up to a story that tells of a company that is loosing (or has already lost?) its grip on its target market. Constantly bloating prices while releasing products that are unnecessary (the stripping content out of codices to sell equally priced sub-codices and digital DLC is the most obvious example - 100%+ tax to play certain popular lists you still want to play). All the while alienating its customer/fan-base by withdrawing any sort of community/organized play or support. Not to mention the blatant threat of IP infringement lawsuits that soured its reputation and perception of any 'good will,' against fan-sites and 3rd party 'bits' shops (culminating in the epic slap-in-the-face that was the Chapterhouse lawsuit, when someone actually stood up to their bullying). Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?" All of these things coupled with a profit growth driven corporate mindset that has been scrambling to reduce overhead and cut the chaff, while placating their shareholders with dividends...despite the fact that they didn't earn enough profit to justify them.

I'm sure there is a lot more to it to that, but connecting the dots that are there for us to actually see, gets us in the ballpark of what is actually going on.

So basically, when GW finally goes...it'll not be with a bang, but with a whimper...

Barfolomew wrote:
...snip...

Interesting forum name, Space Balls fan? My last name happens to be Bartholomew...so I've always loved that character's name!

 Fango wrote:
Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?"

I believe if you want to use the parlance of the CEO responsible for this decline, they're installing punji sticks in now penetrable moat to protect their pigs from theft. Nevermind the fact that those sticks will likely impale the pigs that stray to close to the water and eventually kill off most of the herd...

I think many people see posters here and elsewhere saying that GW is failing and confuse it with us wanting GW to fail.

To be honest, in it's current form, GW doesn't deserve to succeed. But many of us would prefer it to change to a company that did deserve success, and for it to continue and to make great products we'd like to buy.

I'm not angry or gleeful at this sort of news, and I guess most of us here aren't, except in the way that we get a bit excited at an interesting bit of gossip. Most of us are probably reading and posting about this with a sort of glum, frustrated indifference.

WayneTheGame wrote:
Wow if that's true, then things may be really dire.

From: http://investor.games-workshop.com/wp-content/uploads/2015/01/2014-15-Press-statement-final.pdf

Page 4 gives all the numbers.

GW made money two ways, selling product, 56.5MM, and selling IP(royalties), 0.7MM, for to total revenue of 57.2MM from June 1, 2014 to November 30, 2014. Over the same period last year, June 1, 2013 to December 1, 2013, they made 60.5MM selling product and 1.0MM selling IP for a total of 61.5MM in profit. 61.5MM to 57.2MM is 7.0% drop in revenue. They sold it as 6.6% because they didn't include IP sales, which dropped 32%.

GW shows a 6.6% drop in revenue and then shows a operating expenses of 17.5MM variable and 33.5MM base for a total of 51MM in 6 months in 2014. For the same time period last year, they show a variable cost of 17.2MM and base cost of 36.7MM for a total of 53.8MM. This shows that even though they produced less product, their variable costs went up by 2%, 17.2MM to 17.5MM. It also shows that they whacked 3.2MM in cost by laying off people to cut base cost. Total cost dropped 5.3%.

Profit is sales (revenue) minus cost. In 2014, they show total revenue of 57.2MM with a cost of 51MM for a profit of 6.2MM. In 2013 the numbers were 61.5MM revenue, 53.8MM cost and 7.7MM profit. 7.7MM profit dropping to 6.2MM shows a drop of 18.8% drop in profit, which is a BIG number.

Assuming base cost is held flat at 33.5MM and variable cost is flat at 17.5MM, even though it shows to be trending up, it costs GW 51MM per 6 months to stay open and make product. If we go with a conservative 6% drop in revenue, you get the following:

57.2MM June to Dec 2014
53.8MM Dec 2014 to June 2015
50.5MM June 2015 to Dec 2015, flat or 0.5MM in the hole
47.5MM Dec 2015 to June 2016, 3.5MM in the hole

I think that's right Da Boss.

I think very, very few people want GW to fail (well, perhaps the CEO of Privateer Press, but that's it ) The rest of us are the true fans of the company, who remember the company GW once was, and how it used to be a company by wargamers, for wargamers, rather than the corporate, uncaring giant.

Rising profits and growth would have been an emancipation of the modern corporate ethos, a reward for some of the policies that have proven most unpopular over recent years.

Perhaps this dent in sales and profitability (which is actually quite frightening considering the ferocious rate of new releases in the past year) might make some of the head-honchos take notice, and perhaps do more to win customers over. And ultimately, make better products at a more reasonable price.

At least, that's the plan. Blaming poor quality of managers would seem to show that we are a few more reports away from that for the time being however.

 Da Boss wrote:
I think many people see posters here and elsewhere saying that GW is failing and confuse it with us wanting GW to fail.

To be honest, in it's current form, GW doesn't deserve to succeed. But many of us would prefer it to change to a company that did deserve success, and for it to continue and to make great products we'd like to buy.

I'm not angry or gleeful at this sort of news, and I guess most of us here aren't, except in the way that we get a bit excited at an interesting bit of gossip. Most of us are probably reading and posting about this with a sort of glum, frustrated indifference.

This. I couldn't have said it better myself

I love the IP, I love the stories and the models...the games, not quite as much...and the rest of it really bums me out. The current state of the company actually makes me a little sad.

Its a bit like having that friend or relative that keeps making bad life choices...you really wish you could slap them, or shake them violently and tell them to get their gak sorted out...

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

You damn right I'm going to forge that narrative!!!! It's GW's way. This is great news!

 Fango wrote:

Barfolomew wrote:
...snip...

Interesting forum name, Space Balls fan? My last name happens to be Bartholomew...so I've always loved that character's name!

Yes

alphaecho wrote:
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?

They'll drop GW like a live grenade. GW's major stockholders aren't big names who care about GW in particular, they're investment management companies. When they notice GW is showing weakness they're not going to try to nurse it back to health, they're going to send it to the butchers.

Exactly, the only party with enough of a stake in GW to influence matters and the attachment/investment to not simply walk away is Kirby.

And look how that turned out.

This issue is the closed culture that is allergic to new ideas and convinced that it is right.
It's quite disgraceful that they want to pin the blame on their shop managers. But unfortunately all too common when it's the policies from the top that are at fault. Oh well. Better buy that Mamuk I wanted sooner rather than later.

 Shadow Captain Edithae wrote:
So basically, when GW finally goes...it'll not be with a bang, but with a whimper...

Always would be. They've got quite a bit in cash reserves and assets from what I recall and their profit is in steady decline. If the decline is ongoing then they'll start making a loss in the next year or so, and then it'll eat up their cash reserves. Unless they make a sudden loss from something, say like a radical huge re-release of a core product which completely flops, then they won't have a serious blow that will kill them suddenly. They will just contract slowly.

It'll be interesting to see at what point they stop paying dividends, because the board of directors is greedy and self interested, and they're probably frightened not to because wider shareholder confidence is such that last time they didn't pay out the stock dropped quite a bit immediately.

By the time GW get to the point of being bought out, only the IP will be left, I think Kirby and gang will run the company to ruin first. The sad thing is, I very much suspect they have destroyed a lot of their history by disposing of older moulds that might prove very popular if they were in different hands. Someone buying them out would get what exactly? The rights to drawing of Space Marines? They've demonstrated a very weak grasp on their IP.

 Howard A Treesong wrote:
Unless they make a sudden loss from something, say like a radical huge re-release of a core product which completely flops

Completely random, hypothetical example, I'm sure

 lord_blackfang wrote:

 Howard A Treesong wrote:
Unless they make a sudden loss from something, say like a radical huge re-release of a core product which completely flops

Completely random, hypothetical example, I'm sure

Oh let me guess!





Joking aside, that actually would make my day. The Tolkien IP appeals to me so much more than Warhammer, to the point that I've gone BACK to the SBG after a 5 year dalliance with 5th Ed Raven Guard Space Marines.