Games Workshop Financials

[Gilvan Blight]

I\'ll just post the link, you guys feel free to discuss, I picked up a bunch of local microbrews so I\'m ready for it

http://investor.games-workshop.com/latest_results/Results2007/downloads/GW_year_end_07.pdf

 

[Swordwind]

:drunk:

Burn Kirby burn...

 

[frenchkid]

well, like all multinational they have their downs and ups. Either they\'ll be able to see what they\'re doing wrong and they\'ll be back up, or they\'ll just sink. I\'m beting on the first one, since actually sinking a multinational will trying to save it is not something easily done.

 

[skeeve]

All I care at the moment is which stores in US are up for elimination.

The lame to increase profitability by price increase will simply shift sales to the secondary markets (ebay) even more. I don\'t think the problem of GW is decrease in interest it is simply very active secondary market. At some point they were very unwilling to sell their stuff through discounters (for mostly psychological reasons) but with on-line trade out there it is pretty much mute point now.

 

[Sand Rat]

WAHOO!!! AND EVERYBODY DRINK :drunk:

 

[supervike]

No different than any other company that forgets its \'core\' customer base and begins to worry about only profit.

It seems bound to happen when the people who have a passion for the product turn into people who have a passion for only the profit.

There are other gaming companies lining up to follow suit.

 

[Modderrhu]

Uhm... didn\'t he say the same thing last year? Clearly, the forgotten customer only gets remembered when he has to write his report. Yep, he said the same thing last year.

:beer:

 

[skeeve]

Originally posted by Modderrhu
Uhm... didn\'t he say the same thing last year? Clearly, the forgotten customer only gets remembered when he has to write his report. Yep, he said the same thing last year.

:beer:

I was sitting there and being bored red some of their training materials for the stuff. So it says that 20% of your customers provide 80% of your profit... I wonder, since apparently they know this and even teach their stuff why for crying out loud...

 

[Dragonsreach]

Originally posted by steelcult
WAHOO!!! AND EVERYBODY DRINK :drunk:

I\'ll have to wait until I get Home.

 

[Gilvan Blight]

The one line that caught my attention the most was the one about materials only being 4% of their costs. Pretty much goes counter to ever \'excuse\' they have used to raise prices... where\'s that line...

\"The cost of raw materials, such as metal and plastic, represents no more than 4% of our sales and therefore we do not believe that the price volatility of these inputs represents a significant threat to our long-term profitability.\"

 

[Onis Lair]

And you take one down and pass it around.... :drunk:

 

[matty1001]

Found this, don\'t know if its in the origional report thing above, as I can\'t be arsed to read it.

Rodney Hobson, 31/07/07 11:27

Cost cutting has pushed fantasy figurines group Games Workshop into a loss but it remains confident that sales will grow.
Games Workshop reports a pretax loss of £2.9m for the year to 3 June compared with a profit of £3.7m last time. The latest figure was depressed by the £4m cost of implementing a cost reduction programme but even so profits would have been halved to £1.9m.

Revenue slipped from £115.2m to £111.5m and net borrowings ran up from £2.2m to £10.2m. The final dividend is scrapped.

There’s no arguing with chairman and chief executive Tom Kirby when he says: ‘This has been a tough year for Games Workshop.’

The sales performance was patchy and difficult to predict. A poor first quarter was followed by a more encouraging second quarter. The third quarter was soft, although Games finished the year positively.

This lack of consistency forced the group to issue two profit warnings as small shortfalls in sales created large reductions in profits due to high operational gearing.

Geographically, sales were also patchy. The UK, US, Australia and New Zealand did well but the overall performance was held back by Continental Europe - an area that enjoyed strong growth between 2001 and 2004.

Management management teams have been changed in all but one of the Continental European territories.

While new stores are being opened, 32 have been identified as unprofitable due to low sales or high rents. Seventeen in the Americas outside metropolitan areas, eight are in the UK, six in Continental Europe and

one in the Asia Pacific region.

Closing these stores will remove a significant distraction for management.

Rationalisation of the manufacturing and supply chain includes closing the tool making facility at Wisbech, which is being relocated to the main Nottingham site, and closure of the Canadian warehouse, with the existing facility in Memphis picking up its workload.

Games Workshop is reversing the decision taken some years ago to split into four divisions and is coming back to one operational structure.

The changes will cost a further £2m on top of the £4m already allowed for but savings should equal £76m a year.

Kirby reckons that action taken to beef up management and cut costs is preparing the group as ‘a leaner and more responsive organisation, better equipped to face the growth challenges which lie before it’.

He adds: ‘We are confident that sales will return to growth in the future and we are continuing to invest in people and assets to secure that growth; but we are also removing unnecessary costs today and working at preventing their return.

\'We believe that it is only a matter of time and hard work before we re-establish our historic linear growth rate. There is a steely determination in the business to put things right.\'

That’s fighting talk. However, the shares fell 6.25p to 295.75p this morning.

Mark Paddon at Kepler Teather & Grenwood Merrion is convinced that there are indeed long term growth prospects but points to uncertainty over their timing. He thinks the stock is fairly rated for the short term with some recovery already built into the price.

 

[pez5767]

Same old story. You know, maybe it\'s that there are a number of new games out there with models that make the GW stuff look sub standard. Maybe it\'s because GW isn\'t the only balanced game-system around anymore. Maybe it\'s because they aren\'t sucking revenue off a major motion picutre. Either way, the losses aren\'t a big suprise.

I think it\'s smart business for them to cut back. The hobby centers limited to major metro areas worked best, not to mention it helps the independant retailer to not have to compete with a GW store in every town.

In a word, GW (i believe) is feeling the squeeze of capable competition and over extension. Honestly, i think Apocolypse is going to be a bad move for them... Look at the other games on the market, are they going bigger? Nope smaller. More Heroic. I mean seriously, will you be able to play a game of apocalypse on your kitchen table? No? Other games will... lots of them.

Either way, GW is in a situation that they need to run much more efficiently... thus the cuts. Makes sense to me.

Finally, GW\'s business model has always been about making money. Price hikes and less models for more money have been the M.O. for 10+ years. Get over it!
If you want to play with GW stuff you have to get over the cost issue. That or move on to something else. GW will be there when you want to come back... just more expensive than you remember.

just my opinion on this annual event.

 

[hakoMike]

The cost of raw materials, such as metal and
plastic, represents no more than 4% of our sales and therefore we do not believe that the price volatility of these inputs
represents a significant threat to our long-term profitability.

I found this interesting.

 

[frenchkid]

Originally posted by hakoMike

The cost of raw materials, such as metal and
plastic, represents no more than 4% of our sales and therefore we do not believe that the price volatility of these inputs
represents a significant threat to our long-term profitability.

I found this interesting.

I don\'t find it that suprising. I see GW as more of a \'service\' company then an \'industrial\' company. Most of the value of GW products comes from the creative side of the buisness not the industrial side of it. So raw product shouldn\'t be a such a big factor. Especially considering that plastic and white metal don\'t exactly count as expensive materials.

Oh and looks like a nice time to buy some GW shares

 

[philologus]

From Kirny\'s 2007 preamble:
\"We grew fat and lazy on the back of easy success. We forgot about customer service and forgot that hard
work is and always has been the route to success.\"

Is he talking about the company or the guys in the stores?

 

[DrEvilmonki]

Originally posted by hakoMike

The cost of raw materials, such as metal and
plastic, represents no more than 4% of our sales and therefore we do not believe that the price volatility of these inputs
represents a significant threat to our long-term profitability.

I found this interesting.

I find it interesting considering that PP used raw material costs as a reason for their hike in prices earlier this year.


As to going for smaller games, how does that make any sense at all to a company that needs to sell miniatures for profit? Both PP and Rackham have both been developing LARGER game systems, probably after realising armies with limited figures means limited sales.