>b-but GW is going to die any day now..
>Right? Right?
telegraph.co.uk
B-but GW is going to die any day now
Gavin Bennett
Jayden Foster
>You need to subscribe to read this article
Noah Hall
That's weird. I got the link from /aosg/ and i definitely am not subbed.
Ill copypasta it here:
Eli Murphy
Questor share tip: Buy Games Workshop as company leverages fantasy brands
Peter Spence
26 July 2016 • 7:09pm
Games Workshop
465¼p +9¼p
Questor says BUY
Investors looking for an attractive yield and a company well placed to benefit from the pound’s steep falls could do worse than Games Workshop, a business that Questor feels has been overlooked.
Cheap and cheerful
After a troubling end to 2015, revenues at the tabletop games maker have recovered, and the stock appears reasonably cheap, at a price-to-earnings multiple at just 11.2. Coupled with strong cash generation and healthy overseas sales, Games Workshop is an enticing, if risky play.
The company has pumped out figurines to a hardcore audience since its formation in the 1970s, providing the parts for customers to assemble and paint their own armies. Yet despite the high-tech alternatives now available, the firm’s fans have remained loyal.
Valued at just £150m, the company receives scant analyst coverage. Only house broker Peel Hunt currently holds a rating on the stock. Its “Buy” recommendation was reiterated after Games Workshop’s annual results on Tuesday, citing their expectation for a chunky 7.5pc dividend yield over the next two years.
Brexit boon
Recent falls in the pound will make the Nottingham-based company more competitive, as it makes 72pc of its sales overseas and has a domestically focused cost base. A weaker pound could boost profits beyond the expectation-busting £16.9m achieved in the year to May 29.
Games Workshop said that it is particularly sensitive to the US dollar, against which sterling has dropped 10.9pc since the start of the year, and also the euro, compared with which the pound is 11.8pc cheaper over the same period.
cont.
Noah Roberts
Right royal revenues
Management has combated the perennial threat of video games over the years. Yet warnings that fans of Games Workshop’s wares would turn to digital rivals have so far failed to materialise.
Rather, the company appears to be making good progress in selling its intellectual property to video game developers, boosting royalty income from £1.5m to £5.9m in its most recent results.
Tom Kirby, Games Workshop’s chairman, and its former chief executive, stressed that the company was not selling out on its well-established brand by working with third-parties.
He said: “It’s just that working closely with the myriad app developers, and being more precise with the terms we offer, we have increased the number of computer games in the market.”
However, this revenue stream will inevitably involve a certain lumpiness. Buyers should be aware that this could mean future income statements could bounce around, and in turn, result in volatile price action for this stock.
Charles Hall, a Peel Hunt analyst, said that royalty income should nonetheless “be significantly higher than in recent years”, and predicts a £3m contribution in future years, with “plenty to look forward to” in the pipeline.
cont.
Logan Rivera
>To overcome these hurdles, management must be careful not to get stuck in a fantasy world of their own.
Daniel Morales
Longer-term fantasy
The most troubling element of Games Workshop’s most recent update is its attack on the benefits of management diversity. Mr Kirby said in this year’s statement that to “imply that someone is not independent minded because of time served... or whatever else is false”.
Questor fears that this kind of attitude does not lend itself to bringing in new thinking. A promise from Mr Kirby that the company’s next chiefs will be internal hires, with at least a decade inside the firm, suggests that there is a risk of groupthink in the company.
The chairman’s comments came as Games Workshop grapples with a secular threat. The business is reliant on a generation of loyalists, who, as they have aged, have been able to absorb increasing prices. They will not be around forever.
The challenge will be to recruit a new wave of younger, less affluent consumers, when the average sticker price of Games Workshop products has risen by around 3pc in the last year, according to the company’s own figures.
To overcome these hurdles, management must be careful not to get stuck in a fantasy world of their own. Yet, for now, Questor thinks that the stock has further to go. Buy.
end.
Brandon Miller
So does this mean cheaper models?
Xavier Williams
we are starting to see cheaper models already, sort of. Individual kits are still expensive, but they have been doing some deals lately, like start collecting and getting started boxes.
Will kits get cheaper? Who knows, but GW is actually going in the right direction with community interaction and the generals handbook is a boon for AoS that is pretty lauded as great from fans and people on the fence about the game. If you are someone who has nothing but contempt for it, it will likely not change your mind.
Lucas Wright
>boosting royalty income from £1.5m to £5.9m in its most recent results.
I.e Total War: Warhammer saves the day.