Games Workshop: Half Year Financial Report 2022, Reveals Size of Warhammer+
Games Workshop has revealed their 2022-2023 mid-year finances, and for the first time we get a glimpse of the size of Warhammer+
Games Workshop has released released its Half Year trading update with a dividend announcement. Here’s their press release in full:
via Games Workshop Investor Relations
Performance
“Sales for the month of December are in line with our expectations.
On a constant currency basis:
● Core sales growth – sales growth (+4.0%) continues across Retail (+9.8%) and Trade (+3.4%) with a small decline in Online (-0.5%).
● Core gross margin – down 4.5% to 64.1% in the period with increasing volumes, offset by materials increases (+£2.5 million, 1.9% of core sales) and carriage cost increases (+£2.8 million, 1.2% of core sales) both due to external pressures. There were increased staff costs of £1.0 million, 0.2% of core sales in the design studio (investment in pay grades and increased headcount, +20 new jobs in the period) and the incremental cost of our new facilities (+£1.0 million, 0.5% of core sales). Investment in inventory, to ensure we meet customer demand, has also resulted in additional inventory provisioning of £1.2 million, 0.4% of core sales. Our average RRP increase during the period was broadly the same as last year.
● Core cost to sales ratio – at 29.5% (excluding group profit share) (2021: 28.6%) our operating expenses are under control and increased mainly due to increases in staff costs (3% annual pay rise and increases in headcount, +24).
● Core operating profit – down £5.2 million to £64.5 million and profit to sales ratio is down 4.0% to 32.4%.”
So there you have it. Compared to last year, they are up in sales (+4%) and down slightly in profit (-5%). We’re not accountants or financial advisers, so we’re not going to do stuff like your taxes or adjust for inflation. However, it doesn’t take someone with calculator wrist watch to see that GW first half of the year financials are looking very “steady as she goes”. especially in 2022, given the ongoing post COVID-19, Brexit, war in Ukraine, economy, and shipping disruptions that companies are having.
To put that into perspective, here’s a snippet of their rollercoaster stock prices this year courtesy of Google:
Games Workshop stock price, January 11, 2022 – January 10th, 2023, Google
Notable Quotes
The mid-year report also sheds light on some interesting corners of the GW business such as:
Factories
“We continue to manufacture all of our core products at our three factories in Nottingham. Our manufacturing facilities and capabilities at these sites have continued to expand with the installation of more machinery. Combined Factories 1 and 2 now operate 46 injection moulding machines (+8 on this time last year). Our third Nottingham factory dedicated to paint production is fully operational including a new paint filling and bottling line.”
Warhammer+
“Launched in August 2021, it continues to delight and entertain a growing subscriber base. Warhammer+ shows and animations have now been viewed over 5 million times. Revenue is £3.0 million in the period and associated development costs of £2.4 million. Our subscriber numbers are 115,000.“
Media / Amazon
“We have not signed any contracts in the period reported. We have agreed, in principle, to explore opportunities to exploit our IP with Amazon Studios. We announced this in December 2022 after the half year period. We have nothing more to say at this stage. We will keep you informed. We remain confident we will bring the worlds of Warhammer to the screen like you have never seen before.”
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Overall Thoughts
Overall a solid half year for Nottingham, with slow, steady sales growth and minor profit reduction. They have brought paint production in-house at a third factory, so I think we can expect to see more paint/pigment innovations such as Contrast in the future. Warhammer+ has 115,000 subscribers and is running a just over 20% profit at the numbers given. Not too shabby for so young a product line, and especially considering all the drama around it’s birth and the shuttering of many YouTube fan video channels. Finally, GW is being fairly coy about the current state of the Amazon/Henry Cavill deals, saying they have only agreed in principle to explore opportunities at this time. But they remain committed to bringing Warhammer to the screen in the future.
