Games Workshop Financials - 2012 Preliminary Final

[Bigred]

Preliminary 2012 Final Report
http://investor.games-workshop.com/wp-content/uploads/2012/07/Preliminary-announcement-2012-final.pdf

[Mr Mystery]

Cue chicken licked declaring the sky is falling! But the untrained pleb (ie myself) it's looking fairly rosey, with genuine growth.

[isotope99]

Confirms Hobbit not until December which opens up November for another fantasy/40K release. Extract below:

New products
For those of you who are Games Workshop Hobbyists, our new products pipeline is probably what interests you most. Sadly this is not something that I can say too much about: keeping details of our future releases secret until just before they are available to buy adds to the excitement and success of each launch. In the last 12 months we have narrowed the disclosure window to the weekend before release and sales of new products - and of White Dwarf which showcases the new products - have been significantly higher as a result.

Don't expect much change there then.

What I can say is that we will release some amazing products this year. Products that will surprise and delight Hobbyists. We plan to do so every month, including December 2012 when we will release our new Hobbit range to coincide with the film. And... ahh, but that would spoil the surprise. You will just have to wait and see. You will not be disappointed.

[MarneusCalgar]

So...

Reading the pdf... seems GW is more healthy than ever, despite Finecast and the new paint range, isn´t it?

[Kyban]

New products
For those of you who are Games Workshop Hobbyists, our new products pipeline is probably what interests you most. Sadly this is not something that I can say too much about: keeping details of our future releases secret until just before they are available to buy adds to the excitement and success of each launch. In the last 12 months we have narrowed the disclosure window to the weekend before release and sales of new products - and of White Dwarf which showcases the new products - have been significantly higher as a result.

What I can say is that we will release some amazing products this year. Products that will surprise and delight Hobbyists. We plan to do so every month, including December 2012 when we will release our new Hobbit range to coincide with the film. And... ahh, but that would spoil the surprise. You will just have to wait and see. You will not be disappointed.

Did the PR guy write this section? :p

[gendoikari87]

Winter is coming, and so are the price rises.

[Mr Mystery]

Recession. What recession?

[daboarder]

Brief read,

Sales are actually up in North America. not entirely surprising as people cannot afford Holidays but still are willing to spend on small luxuries. Sales in Australia however are still flat (+0.7% is negligible and falls within the error bounds) I think GW now knows exactly where their price ceiling is.

This is supported by the fact that the Australian market did not see a price rise this year unlike the other markets. I fully expect the European and american markets to see prices rise to the Australian level over the next couple of years.

[TheBitzBarn]

I think that is a mistake to expect American and European prices at Aussie levels there are Huge logistical and structural difference in Us and Europe.

1. Product Cost- US and England have the only Factories so distribution is cheaper.
2. Labor cost - Australia has a VERY high retail minimum pay rate and all job down there do that make there base pay way over inflated compared to USA. 14.00 and hour for retail sales Crazy. In US looks more like 10 -12 for Manager.
3. Cost of Transportation - From Memphis to Cali stores is FEDEX cheap via Ground. From Memphis to Sydney. Not so cheap.

[daboarder]

I think that is a mistake to expect American and European prices at Aussie levels there are Huge logistical and structural difference in Us and Europe.

1. Product Cost- US and England have the only Factories so distribution is cheaper.
2. Labor cost - Australia has a VERY high retail minimum pay rate and all job down there do that make there base pay way over inflated compared to USA. 14.00 and hour for retail sales Crazy. In US looks more like 10 -12 for Manager.
3. Cost of Transportation - From Memphis to Cali stores is FEDEX cheap via Ground. From Memphis to Sydney. Not so cheap.



These are actually really terrible excuses. GW is a GLOBAL company as such they should be spreading these costs around so that no one market is adversely affected, to claim otherwise is to attempt to use stupidity as justification for increased pricing. Furthermore the price discrepancies of the Digital media prove that this is corporate BS!

This is a HUGE problem for imports in Australia at the moment and is the subject of a Federal inquiry that will likely result in a change of legislation to prevent such international price gauging.

[LostInTheDark]

While they may be bad reasons for the pricing discrepancy you have to take in to context that every single thing in Australia is ridiculously expensive when compared to UK prices. Everything from electronic goods to clothing to food.

Demonising GW alone for price gouging in the Australian market isn't entirely fair. Where they appear to have suffered is in the loss of sales over the last couple of years and the damage that seems to have caused to the player base. From memory GW had a 10% drop in sales the previous year and then restricted direct sales from the UK, but no annual price increase in response. For this to then translate to only a
marginal increase in local sales would seem to me to indicate stagnation in sales and/or player numbers.

However unless you have access to the actual data it is impossible to tell.

[Racalniog]

They made a Revenue at £131.0m and Operating profit at £19.1m, so they made £131.0m/ £19.1m=
6.85863874 % win?

That's not very much for their prices :-S.

[daboarder]

While they may be bad reasons for the pricing discrepancy you have to take in to context that every single thing in Australia is ridiculously expensive when compared to UK prices. Everything from electronic goods to clothing to food.

Demonising GW alone for price gouging in the Australian market isn't entirely fair. Where they appear to have suffered is in the loss of sales over the last couple of years and the damage that seems to have caused to the player base. From memory GW had a 10% drop in sales the previous year and then restricted direct sales from the UK, but no annual price increase in response. For this to then translate to only a
marginal increase in local sales would seem to me to indicate stagnation in sales and/or player numbers.

However unless you have access to the actual data it is impossible to tell.

Easy mate, I'm just pointing out that the corporate excuses posted by bitzbarn are fallacies for global production companies and are the same ones used by pretty much every international company to gouge the auzzy market.

Your right about the indications of the health of GW in Auz, but its not entirely the whole story, they aren't just down 10% they were from 2010-2011, they are actually down 20% from what they were in 2009.

Their response to the loss of a full 5th of their market in Australia was to instigate the embargo of the European market's. They would have taken this action hoping to see a growth in the sales in Australia and other similar market.

Instead the markets have merely stabilized. While to the uneducated this may seem like a good thing (and it is to an extent) investors will recognize that they have still suffered a catastrophic loss of sales in the Australian market and have been unable to rectify the problem.

This fact more than anything is the likely reason for no price increase in Australia occurring this year and is why I suggested that GW now know what their ceiling is. They have the proof of how far they can push their prices before people stop buying in a market. GW therefore has 2 options, they can either reduce the prices in Australia to bring them in line with those available internationally. OR they can increase the prices in their other markets to bring them in line with the effective ceiling evident from the Australian market.

GW for their own reasons has decided to take the later option and time will tell if this will cause damage on their global sales figures with customers electing to cease spending on the hobby or maximise their profits by selling their product for the maximum customers are willing to pay for it.

[Psychosplodge]

They made a Revenue at £131.0m and Operating profit at £19.1m, so they made £131.0m/ £19.1m=
6.85863874 % win?

That's not very much for their prices :-S.

I would assume there are quite large one off costs in there, a re-launch can't be cheap, for example. They're still re-tooling for "finecast" as evidenced by the recent new wave of models...

It's probably not quite as clear cut as you're making it.

[Wildeybeast]

These are actually really terrible excuses. GW is a GLOBAL company as such they should be spreading these costs around so that no one market is adversely affected, to claim otherwise is to attempt to use stupidity as justification for increased pricing. Furthermore the price discrepancies of the Digital media prove that this is corporate BS!

This is a HUGE problem for imports in Australia at the moment and is the subject of a Federal inquiry that will likely result in a change of legislation to prevent such international price gauging.

Nonsense. Propping up a poorly performing area of your business with a successful is a sure fire way to run your business into the ground and negate all the profits you are making. GW has to treat it's different international markets separately and make the Australian market financially viable on it's own or to withdraw form that market altogether. To suggest that the British or American arms should prop it is ludicrous.

[Psychosplodge]

Maybe they'd be better withdrawing, support 3rd parties and lift the embargo?



Also can you have a preliminary final report? surely it's one or the other?

[Wildeybeast]

Maybe they'd be better withdrawing, support 3rd parties and lift the embargo?


They might well be, but that would lose the customer base they have already invested in building up, not to mention the infrastructure they have. If they have reached a point where sales are steady enough for them to support the Australian market, then they might as well carry on. If sales dipped to the point where they were making a loss down under, then they would have to seriously consider withdrawing as I don't think the market would handle another price rise.

On another note, it is interesting to see that despite all the whining people have done about the lack of advance news diluting enthusiasm and spending on the hobby, it has actually resulted in increased sales of new products. Looks like GW do know what they are doing after all.

[Tzeentch's Dark Agent]

Winter is coming, and so are the price rises.

You win! :D


I think that this speaks volumes, clearly people ARE getting more excited about the new releases. I am happy that GW are thriving in this time of hardship, clearly a hobby is keeping people going. :)

[Wildeybeast]

You win! :D


I think that this speaks volumes, clearly people ARE getting more excited about the new releases. I am happy that GW are thriving in this time of hardship, clearly a hobby is keeping people going. :)

Absolutely agree, and judging by the all the kickstarter projects that are cropping up down on the fantasy forum, it looks like other companies are doing pretty well too. So much for GW strangling the competition.

[Tzeentch's Dark Agent]

Maybe they are strangling the sci-fi competition?

I wouldn't know, I don't particularly track other companies. :p

[Skandar]

The operating profit is most likely going to be misleading, especially given the release of a new rulebook and paints. The publishing and manufacturing costs are likely to feature into the figures. Also note that, as the report ended on the 3rd of June, the spike in demand is unlikely to figure this year. Expect 2013 to be a glowing year for GW however (and thus an excuse to hike the price and test the elasticity of their products).

With that said, a big point of interest in this report lies in the sales figures. Bearing in mind this is before the spike of 6th ed:

UK and Continental Europe seems to be fairly level, both seeing a slight increase at ~600k. Was this as a result of price rises or more sales? Without a further breakdown it's difficult to say. Strangely the figures quoted for 2011 for both the UK and EU are more, sometime significantly more, than those in the 2011 Annual report

UK 2011 external sales figures:
2012 AR - 31,006k
2011 AR - 30,839k

EU 2011 external sales figures:
2012 AR - 40,157k
2011 AR - 35,147k

Ok so a 200k discrepancy can probably be accounted for in the UK figures, but 5 mil discrepancy for the EU?

Meanwhile North America and Australia's figures are spot on.

Interestingly they have increased: 3.25mil for the US and 600k for Oz. Again whether this is due to rising sales or GW killing the golden goose will remain to be seen. That said, don't expect it to occur next year when the spike due to 6th and starter sets will manifest.

[TheBitzBarn]

Nonsense. Propping up a poorly performing area of your business with a successful is a sure fire way to run your business into the ground and negate all the profits you are making. GW has to treat it's different international markets separately and make the Australian market financially viable on it's own or to withdraw form that market altogether. To suggest that the British or American arms should prop it is ludicrous.

Thank you someone who understand the way business is run in a MNC. Each region is a viewed as a separate entity. Gw North America is a separate Legal Entity to protect the mother company and to view them as stand alones.

[eldargal]

Hm, GW avoids financial catastrophe in spite of internet prophecy for, what, seven years running now? It's almost like their managemant knows how to run a business better than their customers,:rolleyes:

[Tzeentch's Dark Agent]

Wow.... It's almost like they're a multinational company or something! :eek:

[Psychosplodge]

Hm, GW avoids financial catastrophe in spite of internet prophecy for, what, seven years running now? It's almost like their managemant knows how to run a business better than their customers,:rolleyes:
Some business' literally succeed despite their management, I know my firm does lol...

[Skandar]

Indeed, thankfully clever accounting can go a long way in some cases. That said it would appear that some of GW management actually seem to know what they're doing.

[Farseer Uthiliesh]

Hm, GW avoids financial catastrophe in spite of internet prophecy for, what, seven years running now? It's almost like their managemant knows how to run a business better than their customers,:rolleyes:

Funny that . . .

[Wildeybeast]

Thank you someone who understand the way business is run in a MNC. Each region is a viewed as a separate entity. Gw North America is a separate Legal Entity to protect the mother company and to view them as stand alones.

Thanks. TBH, it applies on a smaller scale as well. If they had UK store losing money hand over fist, over a sustained period, they would eventually have to shut it rather than divert profits from elsewhere to prop it up. it's common sense as much as business practice.

[Denzark]

Hm, GW avoids financial catastrophe in spite of internet prophecy for, what, seven years running now? It's almost like their managemant knows how to run a business better than their customers,:rolleyes:

Ha Ha I spit on you nay-sayers

[gendoikari87]

Hm, GW avoids financial catastrophe in spite of internet prophecy for, what, seven years running now? It's almost like their managemant knows how to run a business better than their customers,:rolleyes:

More like they have a lot of schmucks for customers that will pay through the nose for plastic. They've priced all the sensible people to third parties, other games or eBay, and rake in dough by gouging the few left who will pay.

[Psychosplodge]

Ha Ha I spit on you nay-sayers

I told zem wi alreadi got one

[Wolfshade]

I really do enjoy reading these reports, it makes it so easy to say "WRONG" when people come up with rubbish about the worth of a certain market being the companies biggest market.

On a more serious note, it seems that the hobby continues to grow with increased sales of this luxury profit despite the recession and stagflation.

[Psychosplodge]

Really? looks stagnant to me...

Also, welcome back, they've given TDA power beyond his wildest dreams...

[Tzeentch's Dark Agent]

I FEEL LIKE ARGEL TAL.

It is a good thing.

[Denzark]

Emperor's Black Bones when did that happen? Making TDA a Mod is like making Weeble the President of the GW Legal team fan club:D

[Psychosplodge]

He just wanted a status...lol

[Tzeentch's Dark Agent]

I asked. :)

I'm going to be an awesome mod.

[Wildeybeast]

I asked. :)

I'm going to be an awesome mod.

Wait, so if we ask you for a status can we get one? Can you give us one? Or is it for special people only?

[Tzeentch's Dark Agent]

I could do it, but I won't. :p

A special status is for either mods, or people who contribute regularly to the lounge (for example eldargal)

[Wildeybeast]

I could do it, but I won't. :p

A special status is for either mods, or people who contribute regularly to the lounge (for example eldargal)

Mod for less than a day and already you're playing favourites. ;)

[Tzeentch's Dark Agent]

She had that title long before I rejoined the forum. :p

Don't worry Wildey, you're awesome.

[Wildeybeast]

Yeah, everyone knows that. I don't need titles to feel special. Honest

[Tzeentch's Dark Agent]

Awwwwwwwwwwwwwh!