Games Workshop Shares (GAW) Rally as Company Delivers Record Profits

Games Workshop shares (LON: GAW) are trading more than 5% higher today, buoyed by the release of its annual report for the period ending June 1. The company delivered record profit of more than £200million, marking a pivotal moment in the company's history and underscoring the enduring appeal of the Warhammer franchise.

• Core Revenue Growth: +14.2% to £565.0 million
• Licensing Revenue: £52.5 million (from £31.0 million, +69.4%)
• Trade Channel Growth: +19.9%
• North America Retail: +14.6% to £51.7 million
• ANZ Retail: -2.4% to £8.2 million (but +2.4% at constant currency)
• Employee Profit Sharing: £20 million (from £18 million, +11.1%)
• Total Dividends: £171.4 million (520p per share)

Games Workshop reported a core revenue increase of 14.2% to £565.0 million. On a constant currency basis, core sales grew by an even more impressive 16.0% to £573.8 million, demonstrating the company's robust global demand.

For the first time, the core business profit before tax exceeded £200 million, a testament to the effective execution of the company’s strategies and the unwavering dedication of its team.

A significant driver of this growth was the surge in licensing revenue, which jumped to £52.5 million from £31.0 million in the previous year.

Royalty income from PC and console game licenses accounted for 81% of this total, reflecting the increasing value of Games Workshop’s intellectual property in the digital entertainment space. T

The retail segment also demonstrated solid performance, with North American retail sales reaching a record £51.7 million, a 14.6% increase.

While sales in Australia and New Zealand (ANZ) experienced a slight dip in GBP terms, they remained positive on a constant currency basis.

Overall, retail sales finished the year with an 11.3% growth, reflecting the enduring appeal of Games Workshop's brick-and-mortar stores and the immersive experience they offer to hobbyists.

The trade channel achieved a remarkable 19.9% growth, with expansions in all key countries, driven by the addition of approximately 700 new trade outlets, bringing the total to 7,200 worldwide.

Furthermore, Games Workshop has consistently rewarded its shareholders with substantial dividends, declaring and paying dividends totalling £171.4 million, equivalent to 520p per share.

Outlook

The company's strategic decision to partner with Amazon to develop the Warhammer 40,000 universe into films and television series represents a potentially significant milestone. This collaboration is poised to elevate Warhammer's brand recognition and attract new audiences globally, further solidifying its position as a leading fantasy intellectual property.

Looking ahead, Games Workshop acknowledges potential challenges, including the impact of new US tariffs, which could affect profit before tax by approximately £12 million in 2025/26.

However, the company remains confident in its ability to navigate these challenges through pragmatic solutions, leveraging its existing US corporate entity and ongoing investments in its Memphis base and store network.