Games Workshop Group - Rounding off a stellar year
Games Workshop’s (GAW’s) year-end trading update highlights higher revenue and a more significant increase in operating profit and licensing income, versus our expectations. FY21 has been very strong despite COVID-19 restrictions on retail, likely incremental costs due to Brexit and recent currency headwinds. Management’s new estimates for FY21 imply year-on-year growth for revenue and PBT of at least c 30% and c 68% respectively and limited underlying cost growth of c 4%. The strong performance has led to higher year-on-year rewards for staff (profit-related pay increased fivefold) and shareholders (total dividend of 235p versus 145p). We increase our forecasts for FY21 to be consistent with the new estimates and make a modest upgrade to FY22. Our DCF-based valuation increases to 12,000p.Games Workshop and its subsidiaries designs and manufactures miniature figures and games and distributes these through its own network of retail stores, independent retailers and direct via the internet and mail order. Co. has manufacturing activities in the U.K. and sells mainly in Europe, North America and Asia Pacific.
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