GW Annual Financial Report dropping this week

[jonsgot]

GW's biggest threats are entry costs (putting of new gamers), going too far with their prices (putting of existing gamers), X wing, and putting all their eggs in one 40k basket. 3d printer will hurt them. But they will be used by some of the people who already torrent rule books and buy models from knock off companies and only some because these people want things cheap, which 3d printing isn't. I'm not sure I agree they will never be detailed and cheap. Technology leaps do happen. As someone who has ended up with non GW resin models, by mistake. I can say I'll be sticking with their products come 3d printing or high water. And moaning my head off if they do ever replace plastic with 3d printers.

[daboarder]

The results won't show you what you are looking for as they will not show sales volume only revenue.


Also, everything that they do is "for profits" after all that is the legal responsibility of ever publically listed company.

Two things
1) The results WILL show the change in sales volume as a % +/-. IE: -20% sales in Australia. Yes this is a revenue value, but given it is intrinsically linked to the volume of stock being moved this is not an issue.

2) You are far to oversimplifying the legal obligation the board of directors has to a company, they do not have the right or the responsibility to make profit, they have the responsibility to maximize the return for investors both short and long term. To ensure that they are acting in the company and its owners best interest.

NO ONE, on either side should be drawing conclusions until the report is released, we can all stick our noses out and say I told you so by cherry picking data in a few days.

[Bigred]

[URL="http://investor.games-workshop.com/wp-content/uploads/2014/07/2013-14-Press-statement-final-website.pdf"]Games Workshop Annual Report 2014 - Press Announcement[/URL]

[URL="http://investor.games-workshop.com/wp-content/uploads/2014/07/Games-Workshop-Group-14-combined-FINAL.pdf"]Annual Report 2014 (Full Report)[/URL]

[Wolfshade]

Two things
1) The results WILL show the change in sales volume as a % +/-. IE: -20% sales in Australia. Yes this is a revenue value, but given it is intrinsically linked to the volume of stock being moved this is not an issue.

No it wo'n't. If GW posts $40 of sales, we don't know if that is several boxes of grotz or one larger kit. It gives no indication of the number of units sold. Given price rises an increase in revenue it could mean less kits sold but at a higher cost. We just don't know.

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Having not read the report:

[daboarder]

[url="http://investor.games-workshop.com/wp-content/uploads/2014/07/2013-14-press-statement-final-website.pdf"]games workshop annual report 2014 - press announcement[/url]

[url="http://investor.games-workshop.com/wp-content/uploads/2014/07/games-workshop-group-14-combined-final.pdf"]annual report 2014 (full report)[/url]

holy ****!

reported sales fell by 8.2% to £123.5 million for the year. On a constant currency basis, sales were down by 6.5% from £134.6 million to
£125.9 million; progress was achieved in other sales businesses (+20.9%) and export (+2.7%) while sales in uk (-7.1%), continental europe
(-10.6%), north america (-7.5%), australia (-9.4%) and asia (-3.3%) were in decline.

wow, that is painful, very painful.......

In typical corporate septicemia, Kirby has awarded himself 2,641 shares. (Technically he awarded himself the option to by that many shares at 20% less than the market value, he then exercised those shares) so basically he gave them to himself for a 20% discount

Pre-exceptional core business operating profit (operating profit before royalty income) fell by £4.9 million to £15.4 million (2013: £20.2
million). On a constant currency basis, core business operating profit fell by £3.6 million to £16.7 million. This result was driven by an £8.7
million sales decline, on a constant currency basis, as a direct result of lower volumes and a decline in gross margin.

Operating expenses (excluding exceptional items) fell by £6.2 million; £3.1 million due to a reduction in retail store costs, £1.1 million
employee profit share not incurred in the year and £0.3 million reduction in legal costs. Savings of £0.7 million from the continental
european reorganisation have been realised. Costs remain a key area of focus.

Yes, GW Made a profit, but the point is they made LESS profit, roughly 25% LESS profit, thats scary

[Wolfshade]

Summaries from the report for those who think it is too long

Revenue £123.5m a drop of 8% on last year
Pre-tax profit £12.4m a drop of a staggering 42%

Even taking into account "Exceptional costs" and adding it into the pre-tax profit that would still be a 21% drop.

Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things are otiose in a niche.

The reorganisation closed 4 European offices, relocation functions to Nottingham or a new tiny office in Dusseldorf (presumably where the cost of £0.6m comes from)
and removed middle management.

Sales in the last quarter are up on their equivalent quarter and costs are down - though this isn't described in the figures so we have to take their word for it.

Having said that overall "Reported sales fell by 8.2% to £123.5 million for the year. On a constant currency basis, sales were down by 6.5% from £134.6 million to £125.9 million; progress was achieved in Other sales businesses (+20.9%) and Export (+2.7%) while sales in UK (-7.1%), Continental Europe (-10.6%), North America (-7.5%), Australia (-9.4%) and Asia (-3.3%) were in decline."

It seems that the new strucutre will decrease costs of the sales which might result in increased profitability.

Somre more sales news, 42% through GW stores, 36% FLGS and 13% mail order, which is broadly similiar to last year. So it would seem to suggest that sales have taken a hit across the board rather than just being in a specific place.

A further £1.3m was lost in operating revenue owing to the strength of the £ vs $s, €.

GW are keen to expand their stores in Germany and North America and they believe that this is still key to their growth. They are targeting "single digit growth" which given the size of GW is more realistic.

A final word of confidence in his brand Kirby closes with "...I expect to see dividends. I am not planning to sell any of my shares."

I should probably condense and refine this at some point.

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While they are doing work to address their profitability, the falling sales volumes should be of concern. Maybe now would be a great time to get out their and start marketing the brand and engaging the customers digitally rather than just face to face.

[daboarder]

While they are doing work to address their profitability, the falling sales volumes should be of concern. Maybe now would be a great time to get out their and start marketing the brand and engaging the customers digitally rather than just face to face.

They need to stop fighting their own customers

[Wolfshade]

I am very tempted to write to GW with my proposal of digital engagement. At least that way I can say I tried everything...

[daboarder]

I am very tempted to write to GW with my proposal of digital engagement. At least that way I can say I tried everything...

Given the way they handled Eddy and the BL digital FB page I think they dont want to know

[Wolfshade]

Given the way they handled Eddy and the BL digital FB page I think they dont want to know

I fear that that is the case.

Eddy for all its flaws was a great idea. The difficulty will be riding the hate for the first X months. Once that is out then you can go on and start to do stuff.