- Games Workshop offers holiday incentives
- Share decline after profit report
- Analysts project strong performance
Anticipating the holiday season, Games Workshop will grant each employee a cash incentive of £2,500 as part of the organization’s profit-sharing program.
Since September, the company reported that trading has been “conforming to expectations,” and the group is on pace to report solid profit growth for the half-year.
However, Games Workshop shares plummeted, falling 11% to 9,430p on Thursday morning after increasing by more than 30% over the previous year.
Anticipate a minimum increase in core operating profit to £82 million for the six months ending November 26, from £70.7 million in the same period last year. This is based on core revenue of at least £235 million, up from £212.3 million.
However, licensing revenues are anticipated to decline from £14.3 million to £12 million, resulting in a decline in profits from £12.9 million to £11 million.
Analyst Insights and Projections
Analysts at Peel Hunt stated that royalties paid by Games Workshop “can be volatile,” particularly “in light of the timing and success of customer game launches and upfront payments.”
Despite this, Peel Hunt predicted that Games Workshop would have a “strong” first half, aided by the introduction of Warhammer 40k in the first quarter.
It has maintained its ‘buy’ recommendation with a target price of 12,000p, which is approximately 27% higher than the present market value.
Games Workshop stated that it anticipates a minimum pre-tax profit of £94 million, up from £83.6 million the previous year.
During the period, dividends declared and paid amounted to £64.2 million, or 195p per share, an increase from the previous year’s total of £54.2 million.
The group disclosed in September that for the three months ending on August 27, primary revenues surged to £121 million from £106 million in the corresponding period of the previous year.
The Warhammer owner based in Nottingham proclaimed a dividend of 50p per share at the time, bringing the total dividends declared for the fiscal year to £1.95 per share, an increase of £1.20 per share from 2022.
However, Games Workshop acknowledged in July that it paid millions in illegal dividends to investors by mistake.
Games Workshop stated that a 45p per share dividend was paid out in November of last year, prior to the filing of its half-year accounts with Companies House, as a result of a “minor technical breach.”
As a result, the payment could be classified as an “illicit dividend.”
Although the error could have permitted the company to file legal claims against its shareholders and directors, it stated that it would not do so and would instead present a resolution at its September annual meeting to rectify the situation.
