Annual Investor Report 2021-2022

[Joe]

Another year, another investor report is available. Time to disect!

[Casual Heresy]

Reading through it just now. I never understand much of the business jargon, but there are always interesting tidbits of info. For example, further confirmation that Heresy is considered a core product.

[Ubiquitous1984]

Thanks for sharing.  Cross posting my Black Library analysis from the BL forum:

 

From the latest GW financial report:

 

"After a record performance last year, Black Library, our novel publishing division, struggled in the face of global supply disruption with many key new releases arriving later than planned. Underlying sales continue to grow, especially in the digital space, with sales of electronic and audio books exceeding those of physical for the first time ever."

(well of course audio and ebook sales now exceed physical, because no one but the most hardcore fans can get hold of a new hardbook book like The Dark City!)

BL sales are MASSIVELY down I'm afraid.  £2.3M in FY21 down to £1.6M in FY22.  

Let's hope the current financial year sees a big improvement.  I'm sure the release of multiple Primarch LE's (with their 2500 print runs) will help (£112500 per book in instant revenue).  If you add in the anticipated SoT book 7 due in the next couple of months, that's £450K in revenue across four HH LE releases.  

 

[selnik]

Revenue up 9.8% 12.5%, Op. profit up 3.5%, EPS up 5%.

Costs increases and supply chain issues are having an impact on the core business, making it less profitable.

Nice increase in licence revenues (e.g. gaming, Warhammer+ animations), includes £7.5m for an AoS game?

Still struggling with their ERP system!

The inventory provision of £10.6m is very interesting, due to a failure “to get the right stock in the right place at the right time” – this is stuff they expect not to sell at all, so perhaps a lot of inventory from outside the core ranges? Any other ideas what this could be?

Edited July 26, 2022 by selnik
Corrections

[sarabando]

pity the period ended just before the heresy release so the next one will be interesting to read, another interesting point is they are aware that not getting the right stock in the right numbers to the right place is costing them. So hopefully we will see better stock levels in the future for items like the Diemos rhino XD

[selnik]

6 minutes ago, sarabando said:

pity the period ended just before the heresy release so the next one will be interesting to read, another interesting point is they are aware that not getting the right stock in the right numbers to the right place is costing them. So hopefully we will see better stock levels in the future for items like the Diemos rhino XD

Agreed - there's another interesting point about the new UK finished goods warehouse due to open this summer, presumably that will help with their logistics issues once it's online.

[StraightSilver]

Some interesting stuff in there - it's a shame the ERP situation I still ongoing, that could drag on for a while (these things are notorious for going way over time and budget if they go wrong). It's my understanding that they can't move into the new distribution hub until this is complete, which may explain why it's so late (they were due to move in last year I believe?).

MyWarhammer being up 140% is interesting - is that Warhammer+ subscriptions though?

And the cost of Brexit is depressing, but guess it is what it is. I am surprised the situation with Russia is only estimated to have cost £4 million, but I suppose that hasn't been a full year.

Some nice honesty about not handling the situation as well as he could have in Australia and Asia.

All in all it looks very solid considering what businesses have been facing globally.

[Ubiquitous1984]

I'm looking through my GW website order history to see what BL Limited Editions and Special Editions were released in the reporting period. I think I bought every book that was available. In the relevant period they released the below. I have noted the price I paid, and then in brackets my estimate of total revenue for the sale of all copies by BL. Please note I have had to estimate a few of these as I am away from my books so can't double check, but I'm pretty sure they're a good estimate):

Dominion Orks version - £40 (40k) Dominion Stormcast Eternal edition - £40 (40k) Lions Gate LE map - £40 (unknown print run, if we assume 1000 that's 40k) Double Eagle SE - £35 (35k) Wolftime SE - £45 (90k) Twice Dead King Ruin - £40 (40k) Warhawk LE - £50 (125k) Twice Dead King Reign £40 (40k) Volpone Glory - £40 (40k) Forges of Mars - £90 (90k) Sigismund - £40 (60k) Defence of Lion's Gate map - £40 (approx 40k) Triumph of St Katherine - £35 (35k) Bequin - £40 (60k) Ahriman Mega Edition - £90 (90k) Ravenor Rogue - £35 (35k) Huron - £40 (40k) Throne of Light - £45 (90k)
Khârn - £40 (50k)

By my calculations all of the special edition and limited edition BL releases in the 12 month reporting period, equate to £1,080,000 in total sales. So almost 2/3 of total BL revenue is generated by their limited releases. This shows how small the print runs (and correspondingly, sales) must be for their basic hardback and paperback releases.

Edited July 26, 2022 by Ubiquitous1984

[phandaal]

21 minutes ago, StraightSilver said:

MyWarhammer being up 140% is interesting - is that Warhammer+ subscriptions though?

My Warhammer is their catch-all login system so it could be anything. Hard to say. Registrations being up 140% could mean the number of new signups compared to last year is higher or the overall number of users is higher, but the language is unclear.

My guess would be it is a combination of things, not just Warhammer+:

"In the year we launched Warhammer+. It is only now approaching its first anniversary and so it is still in very early development. The 
exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP."

That was the only mention of W+ aside from noting that "Online" revenue includes W+. Does not say much but it is telling that there were no stats they considered worth bragging about.

[twiglets]

Quote

We are planning for all of our existing 518 stores to be fully operational and, to add a further 21 new stores: 15 in North America and 5 in Europe (in France, after another successful year) with our new Warhammer café in Tokyo opening too. This will be our first large store in Japan. Warhammer World is a long way away, so we hope this goes some way to immersing our hobbyists in our broader offer. I can't wait to see how well it launches and is received by our relatively small but ever growing hobby community in Japan.

I've always felt like japan could be Warhammer's second or third biggest market. Magic the gathering is huge there and is its second biggest market.

Also it would be interesting to see what a Japanese Warhammer café would be like. Hopefully there's photos at some point.

 

Edited July 26, 2022 by twiglets

[darkhorse0607]

43 minutes ago, phandaal said:

My Warhammer is their catch-all login system so it could be anything. Hard to say. Registrations being up 140% could mean the number of new signups compared to last year is higher or the overall number of users is higher, but the language is unclear.

My guess would be it is a combination of things, not just Warhammer+:

"In the year we launched Warhammer+. It is only now approaching its first anniversary and so it is still in very early development. The 
exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP."

That was the only mention of W+ aside from noting that "Online" revenue includes W+. Does not say much but it is telling that there were no stats they considered worth bragging about.

I feel like if most of the growth was due to Warhammer+ and that service itself exploded they would be flaunting it to the investors as a good sign

[Felix Antipodes]

Since you need a MyWarhammer account account to log into everything from the GW website to the recently updated paint app an increase is both expected and disingenuous as a brag imho. 

Edited July 26, 2022 by Felix Antipodes

[TheVoidDragon]

Interesting to see that part of why Space Marine 2 is being made is that it is their "most consistently requested game".

Edited July 26, 2022 by TheVoidDragon

[Xenith]

2 hours ago, twiglets said:

Also it would be interesting to see what a Japanese Warhammer café would be like. Hopefully there's photos at some point.

Google the Gundam Cafe, and I hope it would be similar, that was an experience, coming from the UK. 

[Scribe]

Man, did they ever mismanage BL last year...

[Lord Marshal]

I wonder what's causing so much grief at Black Library. Their sales were down last year as well, right? Only part of GW not turning a profit and all that. It's odd, because it's quite clear that the IP has grown dramatically since 2017 and given how enormous things like 'Lore Videos' and such are on Youtube, there'd be a bigger appetite than ever for stories. 

Black Library has never been a bastion of high brow fiction, so it can't be said the quality has dropped off or anything. Hardbacks being the new target of scalpers likely hasn't helped, but it didn't feel like that really started until last year.

[andes]

Don't be too hard on BL -- there's a global paper shortage that's affecting cost (way up) and availability (way down). In addition to the overall shortage, there's also been a swing in production. More paper is being used to make cartons (Thanks, Amazon! et al) so there's even less available for publishing. Additionally, of the paper available for publishing, the mix is swinging towards more profitable coated stock and away from relatively cheap uncoated paper you'd see in most novels. The tabletop RPG and general boardgaming publishers are definitely feeling the squeeze.

That's not to say that BL is perfect, just that there are serious headwinds.

[System Sound]

BL seen a lot of writers jump ship lately. Quite a few went to Aconite for example. And it's seems that how ever much he was liked or hated Laurie Goulding was pushing BL a lot. There's probably no one there right now to do that. Hence the reason for recent recruiting ads we've seen for BL.

Edited July 26, 2022 by System Sound

[caladancid]

33 minutes ago, andes said:

Don't be too hard on BL -- there's a global paper shortage that's affecting cost (way up) and availability (way down). In addition to the overall shortage, there's also been a swing in production. More paper is being used to make cartons (Thanks, Amazon! et al) so there's even less available for publishing. Additionally, of the paper available for publishing, the mix is swinging towards more profitable coated stock and away from relatively cheap uncoated paper you'd see in most novels. The tabletop RPG and general boardgaming publishers are definitely feeling the squeeze.

That's not to say that BL is perfect, just that there are serious headwinds.

Yeah I can see how the “global paper shortage” is causing them to price 150 page ebooks at 17 USD. Digital paper is crazy hard to find these days. 

[andes]

23 minutes ago, caladancid said:

Yeah I can see how the “global paper shortage” is causing them to price 150 page ebooks at 17 USD. Digital paper is crazy hard to find these days. 

If your complaint is that GW prices things on the high side, you might consider switching hobbies because that is never going to change.

[caladancid]

30 minutes ago, andes said:

If your complaint is that GW prices things on the high side, you might consider switching hobbies because that is never going to change.

Strawman. Ad hominem. 
 

We are discussing the very real plummeting sales of Black Library. Your excuse for them was global paper shortage. I am pointing out that GW has made choices that are likely more responsible, and that they are fully able to fix. 

[Dark Shepherd]

If I had to guess re Black Library Id say piracy is hitting them hard, and also 3rd party sales margins. Plus authors leaving and some negative press

[Inquisitor_Lensoven]

They made like an extra $6mil they can cut prices for their kits by 5-10% and be fine. They’re just greedy bastards.

[andes]

6 minutes ago, caladancid said:

Strawman. Ad hominem. 

Pot. Kettle. 

I simply pointed out that there are additional factors at work, which you hand-waved away by putting the essence in quotation marks to imply it's spurious.

[Inquisitor_Lensoven]

2 hours ago, Lord Marshal said:

I wonder what's causing so much grief at Black Library. Their sales were down last year as well, right? Only part of GW not turning a profit and all that. It's odd, because it's quite clear that the IP has grown dramatically since 2017 and given how enormous things like 'Lore Videos' and such are on Youtube, there'd be a bigger appetite than ever for stories. 

Black Library has never been a bastion of high brow fiction, so it can't be said the quality has dropped off or anything. Hardbacks being the new target of scalpers likely hasn't helped, but it didn't feel like that really started until last year.

Maybe it’s the lore videos?

personally I enjoy the videos to learn about a lot of lore but I’m not really interested in reading BL unless it’s blood angels or normal humans written by Dan abnett.