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Spoils of war for Games Workshop?

The three principals have sold £1.3m in shares
February 13, 2020

There is a whole army of teenagers (of all ages) dedicated to war-gaming – a leisure activity which entered the public consciousness through the growth of the Dungeons & Dragons brand in the mid-1970s. The rise of fantasy tabletop games – a pastime at once collective and insular – has created tremendous commercial opportunities, a point not lost on shareholders in Games Workshop (GAW).

IC TIP: Buy at 7,055p

The chain has expanded sales by an average of 21.2 per cent a year since Kevin Rountree assumed control back in 2015, reflecting the successful relaunch of its core fantasy title: Warhammer Age of Sigmar. A relatively high level of operational gearing has underpinned annualised profit growth of 48.9 per cent over the same period. You would have a virtual “ten bagger” if you had invested in the stock at the beginning of 2017, but is the Age of Sigmar drawing to a close?

The group has been boosting logistics and is looking to expand digitally, and there is also a Warhammer TV series in the offing. But these growth rates aren’t sustainable indefinitely, even though the December half-year figures were outstanding. There is a little more working capital locked-in than usual and sterling appreciation could also have a detrimental effect on margins. So, with the three principals hiving off £1.3m in shares between them, you might be entitled to ask whether the shares have hit a high-water mark. But even though Games Workshop, as Phil Oakley puts it,is not an easy business to forecast or value,” management has demonstrated a consistent ability to identify and adapt to the needs of its customer base. Buy at 7,055p.

Buys      
Company Director/PDMRDateNo. of sharesPrice (p)Aggregate value (£)Comments
Imperial BrandsThérèse Esperdy (ch)06 Feb 2024,0001,858.9446,131ADRs at US$24.06 each
Micro FocusKevin Loosemore (ch)06 Feb 2064,400763.3491,552 
Quarto Group IncChuk Kin Lau (ce)03 Feb 201,679,743681,142,225CK Lau and associates hold 39.8 per cent
Quarto Group IncChuk Kin Lau (ce)03 Feb 207,720,154685,249,705Through HK-based associate company
       
Sells      
Company Director/PDMRDateNo. of sharesPrice (p)Aggregate value (£)Comments
AshmoreMark Coombs (ce)06 Feb 2010,000,00055055,000,000 
Berkeley Group HoldingsSean Ellis (PDMR)05 Feb 2034,0005,349.61,818,866Sale by Karen Ellis
BiffaRoger Edwards31 Jan 20154,000283435,820Managing Director - Municipal
Countryside PropertiesIan Kelley04 Feb 20256,618495.81,272,268Divisional Chief Executive
Countryside PropertiesIan Kelley04 Feb 20181,063498.5902,599Spouse/associate
DiageoSamuel Fischer (PDMR)05 Feb 2030,0003,139941,700Member of exec. committee
Games WorkshopNick Donaldson (ch)10 Feb 203,3007,178236,867Residual interest 16,700 shares
Games WorkshopKevin Rountree (ce)10 Feb 2010,0007,197.5719,750Residual interest of 5,793 shares
Games WorkshopRachel Tongue (fd)10 Feb 201,4007,170100,380Residual interest of 5,314 shares
Games WorkshopRachel Tongue (fd)10 Feb 203,3007,187.8237,197Sales conducted with spouse
Hargreaves LansdownPeter Hargreaves06 Feb 2034,375,0001,600550,000,000Residual holding of 24.3 per cent
SThreeAlex Smith  (cfo)05 Feb 20100,000374374,000 
UnileverLeena Nair (PDMR)04 Feb 201,6504,590.375,739Chief HR Officer
WhitbreadMark Anderson (PDMR)03 Feb 201,8794,50084,555Includes spouse/associate sale