Games Workshop's stock loses 24% value today. It has begun.

[Zaphod Beeblebrox]

It isn't that bad when you look at it, the drop in Profit is about £4m, which is identical to the drop in royalties, in fact discounting royalties from 2012 to 2013 figures they are actually up £.6m on the previous year.

Actually, if you read the half-year report, you will see that that is not entirely correct.

Royalties are up 0.6 million compared to 2012 and operating profit is even down a little more than what the consolidated numbers show.
Please remember, that the reported numbers are compared to the half-year report until December 2012 and the whole Royalty issue with DOW and the likes was already done by then. But I agree, royalties are insignificant at the current level regardless.

The real bad numbers are these:
Sales are down by 12% - inspite of some really 'busy' sales campaigns, new White Dwarf and the like.
What's even worse is that Profits are down 30%! And Tom Kirby can claim that he is in control of his costs all day long - once sales are going down, he's in for a bad time.

This weekend I'll summarize some of the rumors I heard in advance of the big 'black-shirt' meeting in Nottingham which will take place in February. You will likely see more hectic sales initiatives, a lot of major changes - the one thing you won't find will be a long term strategy.

I got a whole series up on our blog about "The future of Games Days and Games Workshop" (8 1/2 parts by now, most of them terribly, terribly long, epic walls of text) which tries to apply a Chuck Norris roundhouse-kick to everything I personally and subjectively think GW is doing wrong. I have been a nerd about as long as I have been part of top international management (before I turned a full-time nerd for good!) so I think I am not entirely wrong about what I write

[URL="http://masterminis.blogspot.de/2013/08/the-future-of-games-days-games-workshop.html"]Part 1 of this epic series starts here.[/URL] There is a link to the respective next part at the end of each of these posts. I'd be interested to hear what you think. But beware: Reading all of the posts will probably take you a few hours. Perfect for a busy office day

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[tcraigen]

This is a scary thing to see. I have loved the game going on 2 decades now, I found my self really picking and choosing what I bought from gw this year though. The new marine releases were a rather Hefty weight on the wallet, I know if they were resin or still metal it would be pretty comparable but when 2 boxes blows through a hundred bucks like nothing and a wealth of great books, and piles of codexes and gaming books they seem to be releasing I find my self rethinking purchase, where as I was probably spending more when it felt like less just because it was a collection of smaller expensive purchases... It just "feels" like it all costs more so Ive spent less. I never want to see them go out of business. Maybe we'll get a sale or something sales incentives are never a bad move...

[Deadlift]

Personally I think "money off" vouchers would be a good start in the new visions magazine. That may improve sales but I doubt very much GW have considered this an option.

[Lukas The Trickster]

I don't think it will come as a huge surprise to many who follow GW's financial reports; their sales growth had been slowing for the past couple of years and increases in profit were thought to be mainly attributable to continued annual increases in prices and some increased revenue through royalties. This year prices for existing products weren't increased as per the year before, plus many of the stores have reduced their opening hours as they have become staffed by only one person - my local one has nearly halved its opening hours, even over the Christmas period. Did anyone else notice that the Interim Management Report states that 'We also inexperienced some decline in sales through independent stockists', I would venture that this is very possibly a result of a reduced willingness on behalf of FLGS, model stores and toy shops to stock as much of GW products as they used to or even at all due to the increasingly restrictive conditions GW imposes on them, particularly with regards to online sales. That being said, for those of you that care to look at the figures, GW still made a fairly respectable profit at £7.8 million.

We have all noticed that over the past year GW has embarked on what is, for them, a fairly radical programme of restructuring their retail chain - there has been a trend in closing larger, more expensive stores whilst turning the remaining ones into single staffed operations, and according to the report they are embarking on further reorganisation of their supply and sales chain, aimed at further cost cutting we assume. Plus towards the end of last year they appointed Elaine O'Donnell to their board of directors, a former mergers and acquisitions partner with accountants and corporate advisory firm Ernst & Young. I am no business expert, but to me it really seems that GW's board are setting the company up for something...

[Lukas The Trickster]

Whilst I was looking through GW's Investor Relations pages, I came across this, which is definitely new

[URL="http://investor.games-workshop.com/bribery-policy-statement/"]http://investor.games-workshop.com/bribery-policy-statement/[/URL]

In their own words - 'Woe betide anyone who lets GW or themselves down!'

[Defenestratus]

Whilst I was looking through GW's Investor Relations pages, I came across this, which is definitely new

[URL="http://investor.games-workshop.com/bribery-policy-statement/"]http://investor.games-workshop.com/bribery-policy-statement/[/URL]

In their own words - 'Woe betide anyone who lets GW or themselves down!'

While it may be a bit dramatic, those bribery statements are rather common.

[Flame of Udun]

The ultimate solution that would benefit the hobbyists would be for GW to go private, cut out the shareholders and refocus on their customers and producing more content rather than the factory line style production we have seen over the last year-ish. Sadly I cannot see that happening though.

[Nathan Flentjar]

This. While playing X-Wing or Warmachine, they'll lament about that game that they hated on for years and years.

Funny you should say that. I've started playing X-Wing along with a bunch of my friends. While we still technically have 40k armies and everything, large portions of my army remain unpainted, unassembled and unloved due to the ease, fast pace and excellent minis of X-Wing. I for one kinda want GW to flop. Maybe the 40k franchise will be bought out by someone with at least an iota of concern for their customers.

[Denzark]

I've said it in the other thread and I'll say it here. Luxury item in a time of dire financial constraint? of course they will bring in less. They are still profitable and have never been in receivership like several big UK highstreet names. This does not appear to be loss, just less.

It is not the tipping point, I would suggest buying the shares now.

[deinol]

Profit is down does not mean they aren't making a profit. I wouldn't say the sky is falling yet. It's just the ups and downs of regular business.