Thursday, 16 January 2014

GW 6-Monthly Report Triggers Share Fall

The following is from the GW six monthly report.

Revenue and Profits Down

Six months to
 1 December 2 December
 2013 2012

Revenue £60.5m £67.5m
Revenue at constant currency* £59.8m £67.5m
Operating profit pre-royalties receivable £6.6m £10.6m
Royalties receivable £1.0m £0.4m
Operating profit £7.7m £11.0m
Pre-tax profit £7.7m £11.1m
Cash generated from operations £8.9m £12.0m
Basic earnings per share 17.7p 25.6p
Dividend per share declared in the period - 18p

Breakdown by Region

Six months to 
1 December 2013 
Six months to 
2 December 2012 
UK 13.7 15.6 
Continental Europe 16.9 19.6 
North America 15.6 18.1 
Australia 4.6 5.6 
Export 0.8 0.8 
Asia 0.9 1.1 
All other sales businesses 7.3 6.7

First half performance 
Sales in the first half of the year were down against the comparable period in the prior year, continuing 
the trend that developed in the second half of 2012/13. During the first half, the rapid transition from 
multi-man stores to one-man stores and the reduction of trading hours across the Group caused 
disruption in our retail chain. We also experienced some decline in sales through independent 
We view these as short-term issues and expect to see growth return in both channels. We continue 
with our store opening programme (27 stores opened, 20 closed in the period) secure in the 
knowledge that our one man model allows us to ensure new openings are profitable. In the future we 
expect to benefit from the more focussed selling operation across all channels against the background 
of a materially lower cost base. 

Interesting sentence:

Trade sales will be consolidated into a global business, operating from Lenton, Nottingham.

So the retrenchment continues. The markets were not impressed. The company lost a quarter of its value in a day.


  1. Very interesting, thanks John. I hope that forces a relook at the business processes which they have adopted which has taken them away from a gaming focus. At the end of the day though, nobody wants these guys to fold, that would be detrimental to our our hobby overall I think, whether you play their games or not.

    1. Paul, I guess wargaming will survive if GW implodes but it will be a sad day for many us who have a fondness for the brand. John

  2. It looks like they've taken a bath to me - gathered up up the restructuring costs into one set of results - it's generally better to do that when you have a poor result - best to put all the bad news into one set of results - take the hit - and then the next set of results starts to look like a turn round. With GW a lot will depend upon Xmas sales - which are not covered in this set of results. As far as I can gather they wil be losing a lot of sales and admin staff from their non-UK business as they centralise sales, so there will be costs to absorb. Knowing that - they may have worked those costs into these figures as provisions - not sure about that - but I would if it were possible. The full year results will be the clincher.

    1. Interesting point. I guess that redundancy payments raise costs temporarily. Nevertheless, profits seem to depend on cutting costs and increasing margins against a background of falling sales.