Few retailers can boast three consecutive years of record-breaking growth in the current climate. Games Workshop, the global leader for tabletop miniature gaming, has reported FY19 sales growth of 16% (15% constant currency) to £256.6m and a 9.5% increase in pre-tax profit to £81.3m, both comfortably ahead of closing guidance (sales of c £254m; pre-tax profit not less than £80m). This represents an outstanding c 70% compound annual growth rate in earnings since FY16.
Demand has remained strong across all channels, with online rebounding strongly in H2 after a modest decline in H1, and all major geographies, supported by a robust pipeline of new product releases and ongoing focus on customer engagement. The anticipated gross margin decline of 350bp year-on-year to 67.5% reflects the ongoing channel shift towards trade and the new vs. existing product mix.
The company continues to leverage its rich intellectual property via relationships with the major digital gaming publishers, as reflected in an 18% increase in royalty income to £11.4m during the year. Almost 90% of royalty income is derived from PC and console games with Total War: Warhammer II and Warhammer: Vermintide 2 performing particularly well in the period. Additionally, Games Workshop has taken early steps to develop its extensive narrative and characters in animation and TV. It announced a partnership with Big Light Productions earlier this month.
In line with the company policy to distributed surplus cash, dividends of £50.3m (155p per share) were paid during the year leaving net cash of £29.4m at year end (2018: £28.5m). A further 30p dividend has been declared this morning, to be paid on 13 September 2019.”
