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Mostly behind a paywall, but you get the gist:

https://www.thetimes.co.uk/article/games-workshop-giving-back-its-furlough-cash-6qbhs9rn0

Good on them. I'm more and more tempted to buy some shares in them...

It's because they can't pay dividends or executive bonuses unless they pay the money back, it was a string attached to accepting the funds to begin with.

So no, it's not out of the goodness of their heart.

 ScarletRose wrote:
It's because they can't pay dividends or executive bonuses unless they pay the money back, it was a string attached to accepting the funds to begin with.

So no, it's not out of the goodness of their heart.

^Note that this is speculation on the motives for doing so, not necessarily informed fact.

Yes, it's true that there are restrictions on paying out dividends or upper management bonuses--but there's also been specific callouts that GW's profits were looking good after they opened their webstore back up.

I’m not sure why anyone familiar with GW would assume the interpretation that reflects better on the character of the company could possibly be the correct interpretation.

Because GW always has been a particularly fiscally responsible company. The fact that they are in the position to bay back millions while the rest of the world is economically struggling shows a superb fiscal management.

 Kanluwen wrote:

 ScarletRose wrote:
It's because they can't pay dividends or executive bonuses unless they pay the money back, it was a string attached to accepting the funds to begin with.

So no, it's not out of the goodness of their heart.

^Note that this is speculation on the motives for doing so, not necessarily informed fact.

Yes, it's true that there are restrictions on paying out dividends or upper management bonuses--but there's also been specific callouts that GW's profits were looking good after they opened their webstore back up.

Can you find a source for this? As far as I’m aware there are no restrictions on accepting furlough payments. It is true that they cannot pay them until a company has repaid government bailout loans, which are something different.

As far as I can see GW are doing this because of corporate responsibility.


Automatically Appended Next Post:

 Tyran wrote:
Because GW always has been a particularly fiscally responsible company. The fact that they are in the position to bay back millions while the rest of the world is economically struggling shows a superb fiscal management.

GWs statement is that sales were better than expected. In other words, nerds in lockdown need their plastic crack fix even more.

The only mention I have is from someone who had posted this when the story initially broke last week:

So apparently, according to the Financial Conduct Authority, public limited companies aren't allowed to pay dividends to shareholders or provide bonuses to senior management if they've received state aid that they haven't paid it back.

Just sharing that apropos of nothing.

I think the state aid that refers to is the loans, but that statement is unclear.

Yeah, the devil may be in the detail, but I'm sure the dividend ban has nothing to do with furlough payments.

Furlough payments were to support employees by encouraging employers not to ditch them and was not related (to best of my knowledge) to the finances of the company. It wasn't a loan but a grant, so there was no specific expectation of it ever being paid back. You don't want companies deciding between employees and dividends in such a solution.

The stuff that I'm aware of that bans dividends was a set of emergency loans designed to prop up businesses that wouldn't survive lockdown without help (e.g the travel industry). These were loans and were expected to be paid back.The idea that some companies (supposedly struggling) getting govt backed loans would use it to keep up dividend payments is what was stopped. This is where you do want companies to make that decision - if you can pay dividends then you are not strtuggling.

They paid my local GW store manager the entirety of the two -ish months we were on lock down here locally.

https://www.thetimes.co.uk/article/games-workshop-giving-back-its-furlough-cash-6qbhs9rn0

The Times wrote:Games Workshop, the company behind Warhammer toy soldiers, is to pay back millions of pounds of furlough money received from the government and more companies are expected to follow its “moral” stance.

Charles Hall, head of research at Peel Hunt, the company’s broker, said that he knew of several companies that were considering whether to pay furlough money back to the Treasury, in spite of having no obligation to do so. “They think it’s the right thing to do,” he said.

Games Workshop said the downturn had not been as devastating as feared because of a switch to digital sales.

Mr Hall estimated that the move by Games Workshop, which has about 2,000 staff, most of them in the UK, would cost it “a few...

From the research I have done, there are no limitations on GW funds nor any requirement by the UK Government that GW payback furlough payments at all. This is basically a UK unemployment payment scheme for workers forced out due to Coronavirus restrictions.

So GW is actually reducing their profit by paying any of this money back, reducing the amount they can pay their shareholders and executives. As fun as it may be to bash GW, this is actually a fiscally negative action to perform.

Kudos, Games Workshop.

The dividends restriction is on recipients of business support loans, not CJRS (furlough) payments, so that's not the reason. Another couple of companies have announced they're doing the same thing (IKEA being probably the best known internationally).

There was no obligation to repay CJRS payments, they were made for the purpose of keeping people in jobs who would otherwise have been made redundant due to shops etc being closed.

You cannot pay dividends from CJRS (meaning you can furlough directors but only claim CJRS flour them for 80% of their salaries and not their dividends) but you can still pay their dividends from company funds.

This means it will be impossible for many small business to pay dividends, but they're not legislatively prevented from doing so, and would have no effect on GW.

This could also be a preemptive move. Things change fast in the world of politics, and whilst there’s no obligation now doesn’t necessarily mean there won’t be in the future.

And I dare say it’ll reflect badly on companies that don’t, once it’s discovered by the general public.

And to be honest, with GW’s profits and cash holdings, paying back government cash is the right thing to do. Claiming it in the first place given their background might seem a bit odd, but remember at the time, nobody really knew how long lockdown would last, or what it might look like.

Big bonus here for GW is again the amount of in-house production they do. Those companies who rely on off shore production, regardless of where it is have their hands more tightly bound. GW? Provided a lower staff count can meet social distancing and PPE can be provided? Not so much.

 Mad Doc Grotsnik wrote:
And to be honest, with GW’s profits and cash holdings, paying back government cash is the right thing to do. Claiming it in the first place given their background might seem a bit odd, but remember at the time, nobody really knew how long lockdown would last, or what it might look like.

Exactly, no one had a crystal ball, especially back in March. Taking the payments was a fiscally responsible move by the company at that time. And paying it back now is a good thing to do.

*EDIT*

Can't be bothered.

 Mad Doc Grotsnik wrote:
This could also be a preemptive move. Things change fast in the world of politics, and whilst there’s no obligation now doesn’t necessarily mean there won’t be in the future.

When you apply for CJRS the site says that while you will get the money now it can be audited later and you might have to reply it.

GW has operated for a very long time without taking on debts. It's basically been one of their most powerful tools in surviving periods of economic decline because all they have to deal with are their direct overheads and operating costs; they don't have to worry about interest rates spiking or repaying back large loans - which are often things which kill many big highstreet stores who can have millions in debt at the bank and with investors.

Even without government encouragement/mandate, GW clearly operates with a no debt policy. Thus the government loan/payment is clearly something to be repayed and as GW is in a position to do so now they are clearing that debt fast so that its not sitting over them.

They also likely think that if they repay now, if there is a second lockdown, the government might be more willing/able to pay out to GW again if its required.




Basically GW can see profit in one hand and debt in the other and they are using one to counter the other; rather than holding onto both.

GW are one of the fewer companies emerging from this in a very healthy position so its great that they are taking this approach. Many other companies won't be able to even think about repayments until next year at the best.

Well congrats on GW!!

 Overread wrote:
Thus the government loan/payment is clearly something to be repayed and as GW is in a position to do so now they are clearing that debt fast so that its not sitting over them.

It's very much not. Furlough payments are not a loan in any form. If GW wants to pay them back and can afford to that's one thing, but that's entirely optional, and will still be a huge hit to them.

The key feature of furlough payments that people are missing here, is that if a company furloughs an employee, that employee is not allowed to do any work for the company. We're not just talking "no working, wink, wink" here - such employees cannot even be contacted by other employees or managers, except for updating them on the status of their furlough and discussing potential returns to work. We've had this at work with a large portion of our workforce furloughed - we're not even allowed to text them on a personal number to ask where they saved a file. They've had access to their work email and logins suspended. Those people are not allowed to work. The audits someone mentioned earlier is part of this. Once this is over, government auditors will be investigating companies that applied for these payments and if the rules have been broken at all, they may have to pay the money back.

(If we want to be really cynical, we could suggest GW know they have broken the rules, so better to pay back now than face the bad PR of an audit finding this - though that seems really unlikely to me)

So what the furlough scheme really amounts to is:
a) income support for employees whose jobs are temporarily gone due to Covid-19 - it's similar to any sort of income support, but it's done through the employer as it makes it vastly easier to administer
b) allowing employers to keep people technically employed, so that when there is a job to come back to, these people can return to it, rather than making them redundant immediately, and having to then re-recruit later

It's costing the government a lot of money. It will need repaying, but that'll be done through increased taxes. One would expect business rates to increase next year to pay for this, but more likely we'll see income tax or VAT go up instead given our current government.

we could suggest GW know they have broken the rules

Or are wary of perception. Do you want to try to explain to the Revenue the difference between a manager painting his own stuff because hobby and then using it in a store campaign, and a manager painting stuff for the store because they have to?

Pilum wrote:

we could suggest GW know they have broken the rules

Or are wary of perception. Do you want to try to explain to the Revenue the difference between a manager painting his own stuff because hobby and then using it in a store campaign, and a manager painting stuff for the store because they have to?

It's a good point. It's no so much perception and difference rather that that simply wouldn't be allowed. In normal circumstances the manager would therefore voluntarily be working for the company (essentially unpaid overtime). Furloughed staff are not allowed to do any work, even 'voluntarily'.

deano2099 wrote:

 Overread wrote:

It's costing the government a lot of money. It will need repaying, but that'll be done through increased taxes. One would expect business rates to increase next year to pay for this, but more likely we'll see income tax or VAT go up instead given our current government.

In the US, expect both - there's two ends to pull from after all.

I understand that GW is the single most evil corporation in the existence of corporations, past present, and future, but from what I have read, this wasn't a legal requirement they had to follow.

It is possible that they did this because they felt it was the correct thing to do. I don't believe in ultimate altruism, ultimately I think that everyone chooses to act based on intrinsic motivators that reward the behaviors they exhibit. I also cannot gauge or speculate as to what's in their head, but I can observe and react to their behavior, and this seems like it was a good thing.

I think many people's reactions (here and in other places in the comminity) states more about them, than it does GW.

 Stormonu wrote:

deano2099 wrote:

It's costing the government a lot of money. It will need repaying, but that'll be done through increased taxes. One would expect business rates to increase next year to pay for this, but more likely we'll see income tax or VAT go up instead given our current government.

In the US, expect both - there's two ends to pull from after all.

Nonsense. We'll just get rid of payroll taxes and lower corporate tax rates by another percentage point or two across the board. That'll help for sure!

 Laughing Man wrote:

 Stormonu wrote:

deano2099 wrote:

It's costing the government a lot of money. It will need repaying, but that'll be done through increased taxes. One would expect business rates to increase next year to pay for this, but more likely we'll see income tax or VAT go up instead given our current government.

In the US, expect both - there's two ends to pull from after all.

Nonsense. We'll just get rid of payroll taxes and lower corporate tax rates by another percentage point or two across the board. That'll help for sure!

You could Start taxing Amazon and activision-blizzard though which you before subsidise to counter that Loss from Overall lower buissness tax.

Just a suggestion of course

It is possible that they are doing it because it is the right thing, and because doing such generates good will towards the company (a powerful sales tool), and because they just got massive flags waving to potential investors saying 'HEY LOOK WHO IS PROFITABLE OVER HERE!' seriously if the intent was to sell stock they could scarcely ask for better advertising.

I would wager it is extremely unlikely that this action was taken due to a single factor. Instead I feel there were multiple contributing elements, and at the end of the day GW did a good thing. Even if partly or wholly for the wrong reasons a good deed is still worth something.

Games Workshop said the downturn has not been as devastating as feared...

And yet they still put them prices up...

 NinthMusketeer wrote:
It is possible that they are doing it because it is the right thing, and because doing such generates good will towards the company (a powerful sales tool), and because they just got massive flags waving to potential investors saying 'HEY LOOK WHO IS PROFITABLE OVER HERE!' seriously if the intent was to sell stock they could scarcely ask for better advertising.

I would wager it is extremely unlikely that this action was taken due to a single factor. Instead I feel there were multiple contributing elements, and at the end of the day GW did a good thing. Even if partly or wholly for the wrong reasons a good deed is still worth something.

yeah thats what my thinking was. it's win/win/win

Translation: they made so much money hand over fist during the pandemic that it would look really, really bad when they brag about it after having taken government money, and it wasn't really a significant amount of money anyway, so it's better to pay it back now and get the dual benefit of PR points now and avoiding the PR hit later.