Tuesday, July 29, 2014

Games Workshop 2013-2014 Report: Same Old Same Old

GW has released their financial report for the June 2013 to May 2014 year.  Results carry over pretty similarly from their half year results.  Sales are down ~ 8% and profits are down about ~25%.  Even though Tom Kirby is stepping down their seems to be no plans to change course.  Continue high priced product offerings with more and more sales funneled through webstore.  They plan on sticking around for the long term with no real plans to expand the player bases.  Managing the business purely for cash generation.  The did call 4.5 M pounds of expenses as exceptional (firing people only costs money this year) so that they are not counted in the 25% profit drop.  Including those yields like a profit drop of closer to 50%.

Interesting notes, they republished the trade and GW store sale breakdowns again after several years of not showing them.  I wonder if this is because the embargoes helped improve those numbers.  In the US they list, 56% trade, 13% Mail Order (Web), and 31% GW Stores.  Now remember these sales are in pounds not units.  Since GW only gets 50-60 pence on the pound from trade sales, this means that in terms of units it is 72%, 8%,  and 20% respectively.  That there 100 stores localized in limited areas can generate 20% of their sales in the US is pretty impressive or it could indicate the the trade sales have really fallen recently.

Another thing to see is that while overall sales were down ~8%, internal sales were down 15% from product and supply.  This indicates that the average mark up of the products increased which is probably a combination of lower trade sales and the new limited edition products.

GW notes that they cut management levels down essentially removing middle management.  Each store manager now reports to 1 manager for the region (Europe, UK, and NA).  All of the trade sales team reports to 1 guy located in the UK.  This is cost cutting but might be a cool aid problem since there will probably be no one with different ideas with such thin ranks.  They seem to always be referring to the risks of their employees like a group is going to up and quite to start their own miniatures company.

When we look over the last year GW should have had strong sales, they did new space marines, the knight, and released 7th edition for 40K just in time for all the presales and initial deliveries to fall into this report.  It is important to note though that the year they are comparing to also had 6th edition released since that was released in the summer of 2012 which falls into the 2012-2013 year that this is compared to.  I wonder how bad the numbers would have been if they had not pushed that release up into May and left it in the normal summer release window.

I am sort of disappointed after reading the preamble yesterday, I was expecting some more interesting stuff.

No comments:

Post a Comment