GW emerging recovery 'better than expected'

[Scammel]

https://investor.games-workshop.com/2020/06/12/trading-update-on-close-of-financial-year-ended-31-may-2020/

 

As stated previously, trading for the Group in the nine months to the end of February was in line with expectations. Since the outbreak of COVID-19 and the subsequent closure of our operations globally, our performance has been impacted. However, our recovery since re-opening has been better than expected.

 

As we have re-opened our sales channels as discussed above, we now estimate our sales to be c. £270 million and profit before tax for the year ended 31 May 2020 to be no less than £85 million. This includes royalties receivable from licensing which are estimated to be approximately £16 million. Our cash balance as at 31 May 2020 is estimated at c. £50 million and we have put in place a £25 million overdraft facility. From March onwards, given the closure of all of our operations worldwide, we claimed the applicable government subsidies to cover the period of uncertainty. However, in light of these results, we do not intend to make further claims and we aim to repay any amounts that have already been received, where possible.

 

My read is that this implies any furloughed staff are returning to work?

Edited June 12, 2020 by Scammel

[StraightSilver]

It's really nice to hear some good news from a business perspective in these bleak times.

I'm guessing they are one of the few UK companies in a position to re-open on 15th June which means they no longer need to furlough their staff. I'm guessing operating "one man" stores has made this a lot easier than will be for other retailers.

[Lord Marshal]

Nothing too surprising. The term 'plastic crack' is more than a joke to a lot of people - seen plenty of "hehe dont tell the wife i just bought £1000 of a new army" haul photos on Facebook still - and it seems nothing will stop people getting their fix. 

[Sky Potato]

Impressive results, in light of today’s news that the British economy is down 20% during the lockdown.

 

More impressive is the intention to repay money claimed from the Government during this time. I was under the impression nothing needed repaying, so doing that voluntarily is a great touch from GW.

[Redcomet]

Impressive stuff. And also A++ they are repaying subsidies. Not something they needed to do, but it looks REALLY good in the public eye. 

[Vassakov]

Impressive stuff. And also A++ they are repaying subsidies. Not something they needed to do, but it looks REALLY good in the public eye. 

 

What's even more interesting is that Games Workshop is hardly a household name, even here in the UK so it's not as if they'd come under particular scrutiny or pressure to do so.

 

Still, fantastic move by what is honestly just a really great organisation these days.

[G8Keeper]

Impressive results, in light of today’s news that the British economy is down 20% during the lockdown.

 

More impressive is the intention to repay money claimed from the Government during this time. I was under the impression nothing needed repaying, so doing that voluntarily is a great touch from GW.

 

Payments from the furlough scheme don't have to be repaid as far as I understand it but there were also "attractive" loans on offer to businesses (albeit from banks, guaranteed by the UK government) and other fiscal measures.  They may be talking about those.

 

I'm not even sure they used the furlough scheme at all.

[armarnis]

GW is notorious for its sole use of equity, the fact they took an overdraft facility was already something pretty new. i like that they repay what they received.

its a strong statement that goes along their operation in a rather expensive production field as they could easily shift all their production facilities over to country with low personnel costs. saying they are a greedy bunch is all right n proper but i see these actions as a statement of commitment for a healthy public welfare not many global acting companies pursue any more!

[Scammel]

 

Impressive results, in light of today’s news that the British economy is down 20% during the lockdown.

 

More impressive is the intention to repay money claimed from the Government during this time. I was under the impression nothing needed repaying, so doing that voluntarily is a great touch from GW.

 

Payments from the furlough scheme don't have to be repaid as far as I understand it but there were also "attractive" loans on offer to businesses (albeit from banks, guaranteed by the UK government) and other fiscal measures.  They may be talking about those.

 

I'm not even sure they used the furlough scheme at all.

 

The only subsidies I'm aware of are the Job Retention Scheme, Statutory Sick Pay clawback, and the Retail Grant Fund (https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-retail-hospitality-and-leisure-grant-fund), everything else they're eligible for is a form of relief or, as you say, commercial lending. I would be very surprised to hear if they made no use of the JRS for store managers.

[firestorm40k]

GW really have moved on from the company they were 6 years ago, when some of their behaviour was a factor that led to me taking a break from the hobby. There are a number of companies that really should take a page from their book, with regards to returning the subsidies they've received.

 

Also, I'm not surprised they're recovering faster than expected - we joke about 'plasticrack', but this has been (and still is) a time of huge uncertainty - I've certainly drawn great comfort and a sense of stability from being able to make and paint Warhammer miniatures these last few months, probably more so than usual; I expect there are many, many people who've done the same.

[G8Keeper]

GW really have moved on from the company they were 6 years ago, when some of their behaviour was a factor that led to me taking a break from the hobby. There are a number of companies that really should take a page from their book, with regards to returning the subsidies they've received.

 

Also, I'm not surprised they're recovering faster than expected - we joke about 'plasticrack', but this has been (and still is) a time of huge uncertainty - I've certainly drawn great comfort and a sense of stability from being able to make and paint Warhammer miniatures these last few months, probably more so than usual; I expect there are many, many people who've done the same.

 

They will have definitely benefited from many, many more people being at home and having the time to work on projects and as you say, drawing great comfort from their hobby.  Heck my pile of shame has taken a hammering and I'm one of the lucky one's working from home full time.

[Halandaar]

https://investor.games-workshop.com/2020/06/12/trading-update-on-close-of-financial-year-ended-31-may-2020/

 

 

My read is that this implies any furloughed staff are returning to work?

 

Most staff aren't likely to return to work until the stores re-open, but it may be that in the meantime GW just pay them outright, rather than claiming from the Job Retention Scheme for those staff unable to work.

[Dark Shepherd]

So allowing for covid etc...their annual sales/revenue went UP about £15 million pounds

 

Anyone who bought shares in March when they halved in price will have done well

 

Pre covid shares were at all time high of 66.35...theyre now at 79.15...which is DOUBLE what they were in March

Edited June 12, 2020 by Dark Shepherd

[N1SB]

Just to compare notes, our well-respected Warhammer Store manager posted this pic to announce his re-opening just last week. He was furloughed, now he's hard at work.

And we got this notice on all those tables:

Yes, we've been trying to figure out what that box that Squig the Grot is holding is holding.

Big picture time! I've been meaning to update this puppy, here's how this forecast holds up to previous years:

If it weren't for Covid, GW's revenue would have almost hit Edited June 12, 2020 by N1SB

[Medjugorje]

the revenues and profits sank after the Black Templars codex was gone and Eldar and Tau arrived in 6th edition with their stupid OP Codex. ( I really think that the last note effects the community, I know so much people who doesnt like the game anymore since Tau and Eldar were dominating everything so hard).

[pawl]

Anyone who bought shares in March when they halved in price will have done well

 

Pre covid shares were at all time high of 66.35...theyre now at 79.15...which is DOUBLE what they were in March

Didn't have anything spare when they dropped, so my average is still ~£63

[Dark Shepherd]

 

Anyone who bought shares in March when they halved in price will have done well

 

Pre covid shares were at all time high of 66.35...theyre now at 79.15...which is DOUBLE what they were in March

Didn't have anything spare when they dropped, so my average is still ~£63

[pawl]

 

 

Anyone who bought shares in March when they halved in price will have done well

 

Pre covid shares were at all time high of 66.35...theyre now at 79.15...which is DOUBLE what they were in March

Didn't have anything spare when they dropped, so my average is still ~£63

[Kain Mor]

I had quite a bit of cash laying around plus dumping stocks that were starting to tank. Between those two factors I managed to pick up just short of 400 shares when it was down around $51-52 a share. I’m feeling quite happy with the rebound and plan to sit on these stocks for the foreseeable future.

[pawl]

I had quite a bit of cash laying around plus dumping stocks that were starting to tank. Between those two factors I managed to pick up just short of 400 shares when it was down around $51-52 a share. I’m feeling quite happy with the rebound and plan to sit on these stocks for the foreseeable future.

Very nice indeed! Unfortunately being furloughed has cut my income by about 40-50%, so at the minute after bills and regular expenses I've next to nothing left (yay for minimum wage!). Managed to pick up a few more shares, but I sold them (for a profit) while in the process of selling off loads of other small holdings. Focused the majority of my money on a long-term prospect that if it does half as well as expected will still net me a very good return.

Once I'm back in work (and earnings pick up, more importantly) I'll be slowly buying into GAW again as the cycle dips - almost can't lose with them it would seem!

[Doghouse]

I think we've got one of the smallest stores in the company here, I would be surprised if they were open soon but who knows.

 

I'm not surprised that the company is doing ok though, I expect lots of hobbies did well over the last few months.

[m_r_parker]

I think we've got one of the smallest stores in the company here, I would be surprised if they were open soon but who knows.

 

 

I'm fairly sure my local branch (Southampton, UK) will be back open again tomorrow, and I definitely plan on popping in to see the local staff even if I can't stay and chat (or do anything other than shop) like I usually do.

As for their announcement that they're planning to repay the UK government for the Furlough scheme - I have to give them a round of applause! I've not heard of any other company coming out and committing to something like that, and it shows the "We're all in this together" spirit that a lot of other larger companies aren't willing to show. I feel very happy to go back in and spend some hobby-money knowing that they're more of an ethical company than others.

[MegaVolt87]

 

I think we've got one of the smallest stores in the company here, I would be surprised if they were open soon but who knows.

 

 

I'm fairly sure my local branch (Southampton, UK) will be back open again tomorrow, and I definitely plan on popping in to see the local staff even if I can't stay and chat (or do anything other than shop) like I usually do.

As for their announcement that they're planning to repay the UK government for the Furlough scheme - I have to give them a round of applause! I've not heard of any other company coming out and committing to something like that, and it shows the "We're all in this together" spirit that a lot of other larger companies aren't willing to show. I feel very happy to go back in and spend some hobby-money knowing that they're more of an ethical company than others.

 

 

GW isn't alone in handing back COVID grants, but yes its good they are when you don't have to for multi nationals. 9th ed couldn't drop at a better time for them. Despite whats happening, people are still spending on luxuries, for obvious reasons. As long as the inventory is up and no shortage, they can print money. 

[Lord Marshal]

Before people give them too much credit, according to the Prudential Regulation Authority, PLCs aren't allowed to pay dividends to shareholders or bonuses to management if they haven't paid back state aid.

 

https://www.bankofengland.co.uk/prudential-regulation/publication/2020/pra-statement-on-deposit-takers-approach-to-dividend-payments-share-buybacks-and-cash-bonuses

 

GW historically hates holding onto 'debt' so it makes sense, but they're not doing it out of the bottom of their hearts no matter how the PR team spins it.

Edited June 15, 2020 by Lord Marshal

[Marshal Rohr]

Like ten people in this thread have mentioned they’re hobbyists and shareholders and either bought more stock in GW or held on when it dipped instead of bailing so I’m not going to begrudge GW for trying to return to normal operation to pay employees bonuses (remember when everyone at GW from top to bottom got a bonus?) or shareholders getting their payments (for not dumping the company). Anything that gets GW back to a semblance of normalcy is good.