Model specialist Games Workshop warned on profits just after Christmas, as an extensive restructuring programme hit sales, but a strong second-half performance managed to partially offset the poor first half.
In fact, the strength in the final six months of the financial year suggests that the shakeup of regional management and the introduction of a new staffing model at the company's hobby centres is having a positive impact. In North America, which saw the most upheaval, many centres returned to growth as the year progressed, and Games Workshop has begun to expand into new cities once again. The UK operation also continued to recover, but second-half sales in France were disappointing and a new management team has been put in place.
The product pipeline also looks promising. In February, Games Workshop was awarded exclusive rights to develop a range based on the forthcoming Hobbit film. Metal miniatures are being replaced with cheaper-to-produce resin versions, which should continue to push the gross margin higher.
Broker Peel Hunt expects underlying pre-tax profits of £16.5m and EPS of 37.2p in the year to May 2012 (from £15.4m and 36.1p last year).
GAMES WORKSHOP GROUP (GAW) | ||||
---|---|---|---|---|
ORD PRICE: | 432p | MARKET VALUE: | £135m | |
TOUCH: | 425-438p | 12-MONTH HIGH: | 460p | LOW: 340p |
DIVIDEND YIELD: | 8.8% | PE RATIO: | 12 | |
NET ASSET VALUE: | 167p | NET CASH: | £17.6m |
Year to 29 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2007 | 110 | -2.7 | -11.5 | 4.95 |
2008 | 110 | 1.1 | -2.4 | nil |
2009 | 126 | 7.5 | 17.6 | nil |
2010 | 127 | 16.1 | 48.4 | 25.0 |
2011 | 123 | 15.4 | 36.1 | 38.0* |
% change | -3 | -5 | -25 | +52 |
Ex-div: 21 Sep Payment: 21 Oct *Includes 20p per share dividend paid in April 2011 |