Games Workshop Annual Report - 2013

[Bigred]

[URL="http://investor.games-workshop.com/wp-content/uploads/2013/07/Games-Workshop-Group-13-combined-FINAL-without-title-page.pdf"]Games Workshop Annual Report[/URL]

Some highlights:

Sales and cost of sales
Reported sales increased by 2.7% to £134.6 million for the year. On a constant currency basis, sales were up by 3.5% from £131.0 million to £135.6 million; progress was achieved in North America (+7.8%), Export (+2.3%), Asia (+10%) and in Other sales businesses (+27.2%) while sales in the UK (-1.4%), Continental Europe (-0.3%) and Australia (-4%) were in decline. To be consistent with how we manage the business, we now report development costs within cost of sales. In the year we reclassified £4.8 million (2012: £4.7 million) to cost of sales from operating expenses. This reclassification gave rise to a decrease in gross margin of 3.5% (2012: 3.6%).

Operating profit
Core business operating profit (operating profit before royalty income) increased by £4.6 million to £20.2 million (2012: £15.6 million). On a constant currency basis, core business operating profit increased by £5.2 million to £20.8 million (2012: £15.6 million). This result was delivered by sales growth of 2.7%, with maintenance of our gross margin, and a £2.5 million decrease in operating expenses; included in the period reported is the cost of £1.1 million related to payment of the profit share and cost of £0.2 million related to payment of performance related pay to Hobby centre managers. Costs remain a key area of focus. After royalty income of £1.0 million (2012: £3.5 million) operating profit increased by £2.1 million to £21.3 million. On a constant currency basis, operating profit increased by £2.7 million to £21.8 million. During the year, we continued with our retail store programme designed to improve our retail profitability and converted a further 82 stores to the one man format. This takes our total to 274 out of 412 stores (UK: 93, Continental Europe: 80, North America: 76, Australia: 22, Asia: 3). This programme will continue in 2013/14.

Revenue by Segment (Pound Sterling)
UK 30,922,000
Continental Europe 39,452,000
North America 36,688,000
Australia 10,943,000

Operating Profit by Segment (Pound Sterling)
UK 5,227,000
Continental Europe 4,689,000
North America 3,336,000
Australia 756,000

Hmm, first half year (Q3-4 2012) sales up strongly, second halfyear (Q1-2 2013) down slightly. It would seem the release of Warhammer 40,000 6th Edition was very well recieved.


Enjoy!

[DrLove42]

Rise in numbers across the board, against everything everyone seems to think

[Gotthammer]

How about other games like Pokémon or role-playing games? (Who can remember them, now?).

[URL="http://vgsales.wikia.com/wiki/Pokemon"]Lol[/URL].

[DrLove42]

Yeah I thought that was funny. does kinda show that he doesn't keep up with the real world a bit.

[Defenestratus]

It seems so obvious that it shouldn’t need saying, but we deal in a product that sometimes allows passions to over-rule
commerciality. Many of our independent stockists and our own sales people are fans as well as customers and it helps all round if we have
a system that emphasises sales potential over aesthetics.

Rise in numbers across the board, against everything everyone seems to think

Looking for the 2010/2011 numbers but I have a suspicion that the rate of growth has slowed.

Breach of intellectual property (IP) and counterfeit products. The risk is that we lose control of our IP and thus other people can take our
market. There are two ways we mitigate this risk: product quality and IP protection. Product quality is the best defence. Our miniatures are
of extraordinary detail and have very high costs associated with their production. We do the tooling and manufacturing here in Nottingham
to ensure that quality. As it happens, even if we wanted to tool or manufacture elsewhere, we have never found anyone who can deliver
the quality we need at the price we pay. In order to be able to duplicate that quality requires a level of capital investment that no one has,
as yet, even tried to emulate. This also deals with the risk of counterfeit products. The few that are made are of poor quality and do not
appeal to our customers.

Lie.

If you've played at a huge regional event, chances are you've played against counterfeit models and never even realized it.

[Cap'nSmurfs]

Most interesting point from the raw numbers, that I can see, is both that profits are up and that a lower proportion of those profits is from royalties.

[Wilfen82]

Profit went up and staff were axed. Explains the poor customer service and pushy sales attitude in the local store.

[Deadlift]

Profit went up and staff were axed. Explains the poor customer service and pushy sales attitude in the local store.

That maybe your experience, but certainly not mine. My local GW stores in Torquay, Exeter and Plymouth are all staffed by some excellent people. Very helpful and knowledgable. The guys on the end phone at GW HQ too are always very helpful. Even if the insist on calling me "chap"

[Lucidum]

Not to mention that those "counterfeit products" are directly referring to the Chapterhouse lawsuit. I wouldn't call Chapterhouse "Poor quality" though.

[MarchRider]

What about the real threat/risk of desktop 3D printing? Just ignore that 300lb gorilla I guess.