Friday, January 6, 2012

GW Releases Their Half-Year Financials

by SandWyrm

GW just released their half-year statement for the period ending November 27th. So how are they doing? Did they get punished for the price increases and embargo last summer?

Total Revenues, at £62.7m, are up £2.7m, or about 4.5%. However that includes a rather large (but unspecified) royalty payment from THQ for their Space Marine game. So if we deduct the difference between last  year's royalties and this year's royalties, we get a more anemic looking 2.8% growth in overall revenue. Compare that though with last year's 4% drop and it doesn't look so bad at all. It's even slightly ahead of 2009's revenues of £62.5m.

It's a bit flat for my liking, but it's certainly not the sound thrashing that some of us had hoped for following the price increases and the Finecast introduction. They're almost (but not quite) keeping up with the (official) UK inflation rate of 4.8%.

Let's look at their revenue sources by region:
United Kingdom: -0.74%
Continental Europe: +0.73%
North America: +6.19%
Australia: +8.04%
"Emerging Markets and Capital Cities" (Includes Japan): +6.59%
Asia: +45.55%
All Other Sales Businesses: +21.32%
 And profits compared to last year:
United Kingdom: -10.61%
Continental Europe: -3.54%
North America: +9.26%
Australia: -74.21%
"Emerging Markets and Capital Cities" (Includes Japan): +8.29%
Asia: -9.66%
"All Other Sales Businesses": +52.87%
As expected, GW did take a hit in Australia following the embargo shenanigans. But to profit rather than sales; which actually increased by quite a bit. How did they manage that, I wonder?

So is the embargo a failure? It certainly seems like it at this point. Time to either cut and run or slash those Australian prices guys!

But that hit was more than made up for elsewhere. We can take some comfort perhaps in the thought that GW raised their prices an average of 15% but only reaped about a 2.8% overall growth in revenues because of it. So there must be fewer buyers in the hobby than there were before. But who worries about the long term at GW? Not Kirby or Wells.

And of course the dividends will be quite healthy this year.



  1. I'm not gonna lie, Sandwyrm, but I look forward to these posts of yours at the end of each financial period. I find this stuff incredibly interesting, and am curious myself on how GW is doing, but I have NO head for sifting through the information.

    So... kudos! I approve!

  2. To me it shows that in a difficult economy that they made some good business decisions to stay positive comp sales and profits which is the goal of any company. Even though the operating statements are not the same I am used to looking at, I would like to see a general ledger to see what their cost of sales and operating expenses actually are, but it looks like their have grown thier business.

    Good for them!

  3. The oddities in the Aus region may be representative of investments that are being made (but may not yet be complete) for instance... the setting up of stores... this would account for monies spent (therefore effects on profit) whilst also supporting the idea that sales are growing in that region.

    However, just this week there was a short article in a UK paper indicating that current profits are sitting at +40% and a resulting jump in share prices and could be representative of a bumper christmas rush... increased royalty deposits etc.

  4. Also, just read one interesting line in the PDF:

    "As a niche business, we, in general terms, neither benefit nor suffer from macro economic factors as our current results show."

    In other words "we are recession proof" our numbers prove this.

    I find this interesting because they have INCLUDED the royalty payment from THQ into their numbers but neglect to clarify the exact payment... I wonder how their numbers would look without this royalty?

    2011 £15.9 million (2010: £11.5 million)

    If anyone is able to find out the value of the royalty it'd make for much more interesting discussions...

  5. Very insightful post; minus the 'screw the Aussies' experiment they do seem rather bulletproof and able to rely on successful franchise use to save their bacon. Don't forget projected earnings from the 40K MMO in the future.

  6. @Oink

    Yeah, the report isn't as detailed as I'd like. There are plenty of places to play tricks with the numbers, such as "Other Sales Businesses"; which isn't defined even though it accounted for 800k of growth. Was that from sales of metal casting facilities? Who knows?

    But worst case (IMO), their revenues are 2-3m less than stated. Which still isn't the strategy-altering hit that's needed.

  7. That is what companies do. Play with numbers. And the 'other sales businesses' is described as sales from Forgeworld and Black Library as indicated further down in the report.


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