Games Workshop (GAW) continues its good run. The model maker's shares are up 213 per cent since we advised buying them last February and have been supported by another strong set of half-year results. First-half sales rose by a whopping 54 per cent, while operating profit was up 180 per cent to £38.8m, leaving the group firmly on track to deliver against full-year profit estimates of £65m.
Growth is evident across all channels and regions, particularly online and from sales made via external retailers (the so-called trade divisions), where revenue grew 71 per cent and 63 per cent respectively. Geographically, the star performer was North America, where a surge in new accounts helped drive a three-quarter improvement in trade sales. Bosses are now considering stepping up investment to expand capacity, but brokerage Peel Hunt doesn’t believe this will threaten shareholder returns. The group remains in a net cash position, and analysts are currently forecasting a full-year dividend worth 120p a share. That equates to a forward dividend yield of 4.5 per cent, making the shares a viable income play.
Analysts at broker Peel Hunt expect pre-tax profit of £65m for the year ending May 2018, giving EPS of 161p, compared with £38.4m and 94.6p in FY2017
GAMES WORKSHOP (GAW) | ||||
ORD PRICE: | 2,425p | MARKET VALUE: | £783m | |
TOUCH: | 2,420-2,430p | 12-MONTH HIGH: | 2,850p | LOW: 731p |
DIVIDEND YIELD: | 4.5% | PE RATIO: | 15 | |
NET ASSET VALUE: | 235p* | NET CASH: | £28.6m |
Half-year to 26 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2016 | 70.9 | 13.8 | 34.0 | 25.0 |
2017 | 109 | 38.8 | 97.6 | 61.0 |
% change | +53 | +181 | +187 | +144 |
Ex-div: | ** | |||
Payment: | ** | |||
*Includes intangible assets of £15.7m, or 49p a share | ||||
**Last dividend worth 30p per share declared 13 Dec 2017 (ex div: 21 Dec 17, payment: 26 Jan 18) |