Double-digit growth in revenue and profit as company pursues licensing opportunities
Thursday 16 Jan 2020 Author: Tom Sieber

Games Workshop (GAW) £69.70

Gain to date: 21.6%

Original entry point: Buy at £57.30,  21 November 2019

Our positive call on fantasy miniatures firm Games Workshop (GAW) is off to a cracking start, with first half results (14 Jan) taking the shares to fresh highs.

For the six months to 1 December 2019, pre-tax profit rose 44% to £58.6m year-on-year as sales advanced 19% to £148.4m.

On a constant currency basis, sales were up by 16% to £145.6m. Trade, or sales through independent stockists, generated £76.1m, up
from £61.4m; retail £45.3m, up from £42.6m; and online £24.2m, up from £21.2m.

Pre-Christmas trading was also flagged as being in line with expectations and, in a show of confidence, the dividend was hiked from 65p to 100p.

One of the reasons we are excited about Games Workshop is the licensing opportunity associated with its intellectual property. Encouragingly royalties increased by £5.2m to £10.7m during the period, although we are mindful that this income stream can be unpredictable.

The company continues to develop a TV series based on the Eisenhorn novels which are set in its Warhammer universe. We are pleased to see the company approaching this carefully.

SHARES SAYS: We still see significant potential, so keep buying.

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