Games Workshop (GAW) saw its shares climb more than 10 per cent after revealing that it has seen a “better than expected” recovery following the reopening of its stores. With 306 of its 532 branches back up and running across 20 countries, the miniature wargames maker has upgraded its earnings outlook – it now expects pre-tax profit for the year ending 31 May to come in at “no less than £85m”, up from previous guidance of “no less than £70m” supplied at the end of April. This is versus the £81m of pre-tax profit seen a year earlier.
The group is also pointing to £16m of royalty payments from licensing its intellectual property (IP) out to third parties. Up from £11.4m last year, we recently explored the scope for Games Workshop to further monetise its wealth of IP through video games and other digital entertainment. This follows a deal with Frontier Developments (FDEV), which will produce a real-time strategy video game based on Warhammer: Age of Sigmar.
Sitting on £33m of net cash at the half-year stage, this has increased to around £50m, and it also has access to a £25m overdraft facility. With the recovery in trading, Games Workshop will stop claiming Covid-19 financial assistance from the government and aims to repay what has already been received where possible.
