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Games Workshop loses ground

Games Workshop has warned a difficult December will weigh heavy on full-year profit.
January 11, 2016

It wasn't a happy Christmas for miniatures maker Games Workshop (GAW). A product phasing issue meant December sales were worse than expected, leading chief executive Kevin Rountree to admit full-year pre-tax profit is unlikely to exceed £16m (from £16.6m FY2014).

IC TIP: Buy at 545p

In the first half of the financial year, the retail division suffered the biggest blow. Sales at its outlets dipped 2 per cent to £23m: finding good store managers remains a management focus. That compared with a 1.4 per cent improvement in trade sales to £22.3m and 5 per cent rise in mail order sales to £11.6m.

A weak euro took its toll on reported figures, but even adjusting for this left revenue broadly flat year on year. Another "key measure" of performance - return on capital employed - also fell from 38 per cent at the end of the last financial year to 36 per cent at the end of the period due to higher average capital employed and a decline in operating profit before royalties.

Brokerage Peel Hunt nudged its pre-tax profit and EPS forecasts for the year ending May 2016 down 9 per cent and 6 per cent, respectively, to £16m and 37.7p. That compares with £16.6m and 38.2p in FY2015.

 

GAMES WORKSHOP (GAW)
ORD PRICE:545pMARKET VALUE:£175m
TOUCH:526-545p12-MONTH HIGH:625pLOW: 487p
DIVIDEND YIELD:6.6%PE RATIO:14
NET ASSET VALUE:156p*NET CASH:£7.8m

Half-yearto 29 NovTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201456.56.314.536.0
201555.36.314.920.0
% change-2-+3-44

Ex-div: tbc

Payment: tbc

*Includes intangible assets of £10.8m, or 34p a share