Games Workshop faces tougher year

We interpreted the results day fall in Games Workshop's (GAW) shares as indicative of profit-taking, seeing as the stock has risen by a whopping 90 per cent over the last 12 months. Results were largely as expected, with sales and reported profits surging ahead despite increased operating costs and negative currency effects. There was a slight contraction in the gross margin to 71.4 per cent, as the business struggled momentarily to deal with the extraordinary surge in demand, as well as a higher mix of trade sales. This year analysts expect margins to land at around 70 per cent if trade sales make up a greater proportion of revenues and stock provisioning continues.