Games Workshop to shrug off high street malaise with soaring sales

Games Workshop is set to post higher sales and profits for the half-year as it looks to continue the success story which has seen its share price increase by more than 1,000% over the past five years.

The Warhammer owner saw shares rise again in November after it once again surpassed analysts’ guidance.

Despite the current zombie-like state of the UK high street, the company which sells model zombies, wizards and orcs has continued to prosper.

Games Workshop said it was continuing to trade well in its November update and that it expected to push both profits and sales higher as the year continued.

The company was founded in London in the 1970s by Ian Livingstone and Steve Jackson and developed from selling traditional board games to fantasy-focused games, later leading the business to focus around the Warhammer franchise it owns.

It makes the Warhammer figures and games which it sells at its own stores, although it also secures a significant amount of revenue from third-party retailers selling its products.

Analysts at Edison have predicted that sales for the company in the six months to December will be at least £140 million when it reports its half-year update on Tuesday January 14.

The brokerage also said it expects the firm to report pre-tax profits of at least £55 million for the six-month period.

The last full year saw Games Workshop share a £5 million bonus among its staff, handing them £2,500 each, as profits surged to £81.3 million for the year and sales increased by 15%.

Edison also said it expects the company to post a 9% increase in pre-tax profits for both the full year 2020 and 2021, as it looks to make strong returns for investors.

In its most recent note to investors, Edison noted Games Workshop’s “strong margin growth and encouraging signs with respect to its ability to leverage its intellectual property through royalty income”.

Institutional investors have put their faith in Games Workshop and account for almost three-quarters of its shareholders, according to filings.

The most recent of these is Schroders, which announced in December that it had purchased 5.6% of the 32.7 million outstanding shares in the business.