TIDMGAW
RNS Number : 9973X
Games Workshop Group PLC
11 January 2022
GAMES WORKSHOP GROUP PLC
11 January 2022
HALF-YEARLY REPORT
Games Workshop Group PLC ('Games Workshop' or the 'Group')
announces its half-yearly results for the six months to 28 November
2021.
Highlights:
Six months to Six months to
28 November 2021 29 November 2020
---------------------------------------- ----------------- -----------------
Revenue GBP191.5m GBP186.8m
Revenue at constant currency* GBP198.8m GBP186.8m
Operating profit - pre-royalties
receivable GBP68.4m GBP83.3m
Royalties receivable GBP20.1m GBP8.7m
Operating profit GBP88.5m GBP92.0m
Operating profit at constant currency* GBP93.8m GBP92.0m
Profit before taxation GBP88.2m GBP91.6m
Cash generated from operations GBP76.4m GBP100.0m
Basic earnings per share 217.2p 226.1p
Dividends per share declared in
the period 100p 80p
Dividends per share paid in the
period 115p 80p
Kevin Rountree, CEO of Games Workshop, said:
"We are on the front foot and confident in our ability to
continue to deliver our strategy. Our commitment to focus on real
cash returns and return on capital continues to deliver honest and
consistent returns to our owners. We will continue to try our best.
In the period reported, we have delivered just that.
We have proven once again that the Warhammer hobby creates
exciting experiences and allows people around the world to come
together and have some fun. We continue to focus on making the best
miniatures in the world and to document and deliver an exciting
operational plan.
I'm once again immensely proud of the global teams' performance,
the ongoing support of our customers and those unsung heroes that
keep us safe and well, thank you."
...Ends...
For further information, please
contact:
Games Workshop Group PLC investorrelations@gwplc.com
Kevin Rountree, CEO
Rachel Tongue, CFO
Investor relations website investor.games-workshop.com
General website www.games-workshop.com
*Constant currency revenue and operating profit are calculated
by comparing results in the underlying currencies for 2020 and
2021, both converted at the average exchange rates for the six
months ended 29 November 2020.
FIRST HALF HIGHLIGHTS
Six months to Six months to
28 November 2021 29 November 2020
--------------------------------------------- ----------------- -----------------
Revenue GBP191.5m GBP186.8m
Revenue at constant currency GBP198.8m GBP186.8m
Operating profit - pre-royalties receivable GBP68.4m GBP83.3m
Royalties receivable GBP20.1m GBP8.7m
Operating profit GBP88.5m GBP92.0m
Operating profit at constant currency GBP94.2m GBP92.0m
Profit before taxation GBP88.2m GBP91.6m
Cash generated from operations GBP76.4m GBP100.0m
Basic earnings per share 217.2p 226.1p
Dividend per share declared in the period 100p 80p
Dividend per share paid in the period 115p 80p
Revenue by segment
Six months Six months Six months Six months
to to to to
28 November 29 November 28 November 29 November
2021 2020 2021 2020
Constant Constant Actual rates Actual rates
currency currency
-------------- ------------ ------------ ------------- -------------
Trade GBP112.8m GBP104.0m GBP108.1m GBP104.0m
Retail GBP43.3m GBP36.9m GBP41.9m GBP36.9m
Online GBP42.7m GBP45.9m GBP41.5m GBP45.9m
-------------- ------------ ------------ ------------- -------------
Total revenue GBP198.8m GBP186.8m GBP191.5m GBP186.8m
-------------- ------------ ------------ ------------- -------------
Summary operating profit
Six months Six months Six months Six months
to to to to
28 November 29 November 28 November 29 November
2021 2020 2021 2020
Constant Constant Actual rates Actual rates
currency currency
------------------------------- ------------ ------------ ------------- -------------
Revenue GBP198.8m GBP186.8m GBP191.5m GBP186.8m
Gross profit GBP138.2m GBP141.1m GBP131.3m GBP141.1m
Operating expenses (GBP64.2m) (GBP57.8m) (GBP62.9m) (GBP57.8m)
Operating profit pre-royalties GBP74.0m GBP83.3m GBP68.4m GBP83.3m
receivable
Royalties receivable GBP20.2m GBP8.7m GBP20.1m GBP8.7m
Operating profit GBP94.2m GBP92.0m GBP88.5m GBP92.0m
------------------------------- ------------ ------------ ------------- -------------
Foreign exchange rates
Our currency exposures are the euro and US dollar:
euro US dollar
2021 2020 2021 2020
Rate used for the balance
sheet at the period end 1.18 1.11 1.33 1.33
Average rate used for earnings 1.17 1.11 1.37 1.30
-------------------------------- -------- ------- -------------- -------------
INTERIM MANAGEMENT REPORT
Games Workshop and the Warhammer hobby are in great shape.
We are on the front foot and confident in our ability to
continue to deliver our strategy. Our commitment to focus on real
cash returns and return on capital continues to deliver honest and
consistent returns to our owners. We will continue to try our best.
In the period reported, we have delivered just that.
Thanks to a resilient and engaged global team, we have had
another great six months. We continue to deliver the day job:
designing and making the best miniatures, books, games and paints
in the world. With a relentless focus, we continue to support our
existing customers and build new communities of like-minded
Warhammer hobbyists. This despite, on occasions, having one arm
tied behind our backs e.g. global travel restrictions and our
retail recruitment offer has been compromised for some time.
We are proud and humbled most days with the feedback that we
receive; particularly that the Warhammer hobby continues to be a
happy place for most people. We are ever more mindful these days of
the role hobbies play for those who are struggling with wellbeing
challenges. We will continue to work hard to ensure that the
Warhammer hobby remains a fun and immersive pastime, offering
people around the world an opportunity to form friendships and find
support and to express themselves creatively as they explore
Warhammer's fantastical worlds.
COVID-19
Our number one priority during the period has remained the
health, safety and wellbeing of our staff, their families and our
customers. We thank all of those whose efforts helped to keep us
safe and well - you are all amazing!
We are still operating with additional safety measures in place,
e.g. social distancing, and we continue to encourage face coverings
in areas such as our factories. We have actively encouraged our
staff to do the right thing for themselves and their colleagues;
having the COVID-19 vaccines is top of the list, and we mandate
they follow all local government guidelines. We continue to pay all
our staff fully, even when the virus forces them to temporarily sit
at home. We know they're desperate to get back to work and look
forward to having them do just that.
COVID-19 related disruption has continued, and countries
continue to be at various stages of normality. These events are
outside of their control. However, the negative impact on Games
Workshop's normal operational processes has reduced in the period
reported. Our main facilities are broadly back to normal allowing
us to focus on the completion of some major projects. For example,
staff from our support functions have been able to fly to Memphis
to help the local team get our warehouse project fully operational.
We are hopeful we can clear back orders and reduce delivery times
in the next month or so.
We once again thank our customers for their patience and
understanding. Sorry if we have let you down, the team is doing
everything they can to speed things up.
Growth
The global team has delivered another record sales performance
(at constant currency rates) - this is fantastic - the prior year
was by far our best performance ever. Our plan was rougher around
the edges than I would have liked. This will likely remain the case
for a few more months as the global disruptions continue to ease.
To be honest, I'm a little disappointed that we have not delivered
to our full potential: e.g. having to delay some of our new
products due to shipping issues. I hope we get the opportunity in
the second half.
Even so, I am delighted to report that we continue to perform
well in most countries, the exception being Australia. The ongoing
COVID-19 restrictions there have kept our stores closed - something
I know that has frustrated our passionate store managers. The team
is ready to bounce back as soon as they get the chance. The
performance of our core product ranges remains in line with our
exciting operational plans, see below for more details.
Our profit before tax is down GBP3.4 million, however, excluding
foreign exchange movements and increased carriage costs and paying
our staff more (a good thing!), our net core business profits are
broadly in line with last year's record performance. When we say
the core business, we are referring to our business that focuses on
realising our intellectual properties as miniatures and supporting
products, excluding licensing. We continue to remain focused on our
core business metrics and are working tirelessly to improve the
ones that are in our control. In the short term, some of our global
freight and raw material suppliers have been passing some cost
increases on to us - we will be working hard over the period ahead
to ensure they are fair. The negative impact of these on our gross
margin is about 3%. To date, the discount we offer our trade
accounts and our global RRPs have not significantly changed,
pragmatically this is under constant review.
Core business highlights
Our strategy has not changed - we continue to make the best
miniatures in the world, in ever increasing volumes, and to engage
and inspire our customers new and old.
In line with our group profit share scheme, payments in cash to
staff are GBP6.9 million (2020: GBP6.3 million). Total dividends
declared in the period reported were 100 pence per share (2020: 80
pence per share).
Sales for the month of December are broadly in line with our
expectations.
On a constant currency basis:
-- Sales growth - sales growth (+6%) continues across Trade
(+8%), Retail (+17%) with a decline in Online (-7%).
-- Gross margin - down 6% to 70% in the period with increasing
volumes, offset by the costs of increased staff costs (investment
in pay grades and increased headcount, +GBP3.0 million, +68 new
jobs in the period), input and carriage cost increases (+GBP5.6
million) and the incremental cost of our new facilities (+GBP0.7
million). Investment in inventory to ensure we meet customer demand
has also resulted in additional inventory provisioning of GBP2.9
million. Our average RRP increase during the period was broadly the
same as last year.
-- Cost to sales ratio - at 29% (excluding group profit share)
(2020: 28%) our costs are under control and mainly relate to
increases in staff costs (3% annual pay rise and increases in
headcount +27).
-- Operating profit pre-royalties receivable - given the tough
comparatives - both value (down GBP9.3 million to GBP74.0 million)
and profit to sales ratio (down 8% to 37%) have declined but remain
our second highest of all time.
At actual exchange rates:
-- Net cash generated from core business operating activities -
down GBP28.3 million in the period reported against last year,
driven by the decline in core business operating profit of GBP14.9
million and outstanding European VAT receipts following Brexit of
GBP15.1 million. Our constant focus on managing our balance sheet
has ensured our net cash generation remains in great shape compared
to historical levels.
-- Major capital projects - to date GBP2.6 million in capital
projects in the first half, including warehouse and factory
investment and our European ERP system.
-- Returns to shareholders - we have declared GBP32.8 million in
dividends during the period (2020: GBP26.1 million).
-- Foreign exchange differences - the impact on reported
operating profits pre-royalties receivable is an adverse GBP5.6
million. We don't actively manage foreign exchange rates and we
will continue to report the impact on our results.
Cash generation - no change in our policy or principles. We have
continued to:
-- Maintain an appropriate balance sheet to ensure we can
maintain our current level of profits and can withstand any short
term setbacks.
-- Provide for the safe ongoing operation of our global business in an ethical way.
-- Reinvest to grow sustainably and deliver our strategy.
-- Pay regular dividends to our shareholders - we return any
'truly surplus' cash as dividends as and when we have excess
cash.
We are not planning any share buybacks or acquisitions.
Key priorities
We have made some good progress with our key priorities. Each of
these is designed to ensure we deliver our exciting operational
plan and continue to engage and inspire our loyal customers.
Customer focused
The Age of Sigmar launch in July was our best fantasy launch to
date by a considerable margin. This saw us unveil the next chapter
in the struggle for the Mortal Realms alongside some fantastic new
miniatures. We spearheaded the launch with a high-end animated
trailer, showcasing the Mortal Realms like never before. This was
viewed 28 million times in the period. Sales following the launch
have been strong as this relative newcomer to our offer (it was
launched in 2015) continues to grow in popularity.
Following last year's relaunch we have been revisiting some much
loved factions from our Warhammer 40,000 (40k) universe with Adepta
Sororitas, Space Marines, Orks and Astra Militarum all receiving
new models in the period. The new version of Kill Team, our
fast-paced skirmish game set in the 40k universe, was well received
by hobbyists proving its long term place in our offer. We
celebrated this with a high-end animated battle sequence, which
quickly became our most immediately watched piece of content ever
with almost 6 million views in the first 14 days.
The 'Imperium' part-work, aimed at those new or returning to the
40k hobby, was launched in UK newsstands in August. Sales have been
ahead of expectations and launches in other countries are scheduled
for the new calendar year.
We have been producing our core products in Mandarin for years
using translation agencies but, in the period, we moved all
translation in house to improve consistency and quality of our
offer in this key market.
Although suffering from disruptions in global shipping, there
was a steady flow of new miniatures for our other intellectual
properties (IPs) (Blood Bowl, Necromunda etc) as we continue to
provide customers with ever more depth and choice.
Our epic Horus Heresy novel series is drawing close to its
galaxy changing conclusion. Currently standing at over 7.5 million
words, we aren't aware of a more detailed and in-depth story in any
fantasy or science fiction IP.
IP and design studio payroll costs increased by GBP0.8 million
to GBP5.6 million; as a percentage of sales they have increased by
0.4% to 2.9%.
Community
Supporting these new miniatures, we have continued to put out
tens of thousands of pieces of content across
warhammer-community.com and social channels. As a result, we've
more Warhammer fans than ever before. On social, despite ever more
restrictive algorithms from the big players, we're reaching more
people compared to the same period last year. On
warhammer-community.com users are up 15% across all territories.
Even more encouraging, our email marketing is up across all metrics
- subscribers, opens, clicks and revenue - all telling us that we
continue to grow and retain an engaged customer base.
Within the period, we launched a range of new initiatives to
ensure customer experience of the Warhammer hobby is better than
ever.
With something for every Warhammer fan, our brand-new
subscription service Warhammer+ got off to a great start. In
particular, our animation and in-house shows have been extremely
popular, with 2 million views in total across all shows in just
three months. We view Warhammer+ as a 'club' for our most loyal
fans and will look to extend the ways in which we deliver them even
more exclusive content and reward them with exciting new product
and service offers.
With our operations not at full speed and to ensure our
customers never missed the Warhammer releases they really wanted,
we introduced a 'pre-order promise', guaranteeing every fan the
chance to purchase the latest releases, without fear of missing
out. This is especially important for a hobby where collectability
lies at the heart of the experience. As we get back to normal
operations this will be pragmatically reviewed.
During lockdown many of our customers missed getting together to
roll dice. As restrictions have eased and the world tentatively
returns to normal, the Warhammer events team went on the road in
the US. This effort in kickstarting a return to in-person events
has been a rousing success, with each of our roadshow events
selling out almost instantly, and with live game coverage broadcast
to hundreds of thousands of viewers worldwide. We look forward to
furthering our events programme next year.
Our customers really enjoy user-generated content, and as such
we are committed to supporting fans as they create their own
Warhammer-related events, videos, articles, podcasts etc. To this
end, we are in the process of creating a community outreach team,
to work with and support creators and prominent community members
who champion the Warhammer hobby outside of our own pages and
spaces.
We continue to look for more ways to surprise and delight our
fans.
Employees
Our performance, as ever, was driven by a considerable team
effort across all aspects of our global, vertically integrated
business.
Throughout the past six months, our priority has remained the
health, safety and wellbeing of our staff, their families and our
customers. We will always follow all government guidance and do
what we think is right in order to look after everyone at Games
Workshop. Equally as important as our COVID-19 control measures
have been our people and wellbeing initiatives. These include a
range of initiatives across health, mental wellbeing, engagement
and personal and professional development. In just six months we
have launched a new global occupational health and employee
assistance programme, mental health awareness and training, a
global new starter induction programme, two paid volunteer days for
the global workforce (from January 2022) and subsidised gym
memberships. We're extremely proud of the progress we've made, but
there's still lots more for us to do.
Training and development remains a key area of focus. We
recognise that each employee, whether they are new to Games
Workshop or have been with us for many years, needs to know what is
expected of them in their job and needs to be given the appropriate
support to achieve their performance potential. With this in mind,
we rolled out our new manager training in June, it was well
received. It should ensure, as we grow, we continue to build high
performing teams.
We are committed to ensuring that all staff are paid fairly for
the job they perform and to rewarding our staff for their
considerable contribution. We always manage the business for the
long term and aim to get the right mix of annual pay rises and
variable cash rewards. In the last five years we have increased
fixed base pay on average of 3% per year, a total of GBP20 million
over the period. Over the same period, we have also rewarded staff
with a discretionary payment and group profit share payments of
GBP35 million, equating to c. GBP15,000 per staff member on top of
their base pay.
Social responsibility and sustainability
Our new head of social responsibility and sustainability will
have joined us by the time you are reading this. This new recruit,
we hope, brings with them a wealth of expertise and experience on
this key subject. An area we would like to see some significant
progress on in the years ahead. Working alongside our departmental
heads across the global business, they will be reviewing and
redefining our sustainability action list. Once complete, we intend
to communicate this plan to our shareholders, customers and staff
to ensure that everyone is clear on both our priorities and our
progress.
Facilities
Factories
This period has been one of consolidation within our two
factories. With staff health and safety being an ever present
priority, we have maintained elements of social distancing
throughout the factories. Despite this, the planned installation of
additional equipment and five more injection moulding machines was
successful. This takes the number of our live injection moulding
machines up to 43. We plan to use them all. The second tool room is
fully operational and has greatly increased our tooling capability.
With the renewed focus of a new small, dedicated team, product
innovation remains a key area of focus.
We have created 35 jobs in the period, taking our total number
of jobs in our factories to 432. These additional jobs and the
annual pay rise, increased payroll costs by GBP1.8 million to
GBP6.3 million; increasing to 3.3% from 2.4% of Group sales.
Warehouses - North America
Logistics projects have progressed, albeit more slowly than
planned, partly due to COVID-19 restrictions preventing the UK
project team from entering the US. Given these challenges, the
progress that has been made has been remarkable. The new system and
technology in our Memphis facility is now operational,
significantly increasing the number of orders we can pick and pack.
The GBP5 million of back orders at the end of November 2021 will be
cleared by early January, hurray! We now have a team of 71, up 7 in
the period. To ensure we realise the benefits of this investment,
the short term goal is to maintain a full team. The job market in
Memphis has been more fluid than historical trends resulting in
some shortages in the period reported.
Warehouses - UK
Development of the technology for the East Midland Gateway (EMG)
facility was consciously slowed to allow greater focus on the
delivery of the Memphis project. Despite that decision, the UK team
have continued to use the site to great effect fulfilling multiple
key launches including the summer's Age of Sigmar launch set and
fulfilling all of the factories' component requirements. All
equipment and infrastructure at EMG is now in place and, with
Memphis having recently gone live, focus has switched to the UK 'go
live' within the next six months. The first phase of work to
refurbish the original Nottingham warehouse facility has been
completed successfully. This will be our component warehouse and
should be fully operational by May 2022. At full capacity it will
employ 200 people, it currently employs 37.
Total warehousing costs have increased by GBP2.8 million to
GBP9.7 million; as a percentage of sales they have increased from
3.7% to 5.0% in line with our operational plan. This can be better
analysed as a new day to day running cost e.g. staff and facilities
costs. We try our best to get the right stock in the right place at
the right time and we have fallen short during the period. The
challenging backdrop, live projects and global disruption, has
increased some of our stock levels more than I would have liked,
getting back to the basics of managing our range and stock levels
will be a key area of focus.
Brexit
In the period, we have continued to use the new working
arrangements adopted following the UK's exit from the European
Union in January 2021. This has resulted in additional shipping and
freight costs of GBP2 million in the six months to 28 November 2021
and is included as part of the GBP5.6 million increase in input and
carriage cost increases discussed earlier in gross margin. In
addition, from a cash flow perspective, there are delays in the
repayment of VAT from some European tax authorities.
Capital investment
In Manufacturing we have invested GBP1.8 million in facilities
and equipment and GBP3.3 million in tooling. In Merchandising and
Logistics we have spent GBP1.5 million in the period on facilities,
racking and IT systems. ERP - we have made some good progress on
implementing our European ERP system and we are working hard to
help achieve the completion of this long and complex project with
GBP0.5 million incurred in the period.
Non core business - licensing, media and entertainment
Video games
We have again found great successes in licensing Warhammer into
computer games with some world class partners. A number of major
video games are due to be launched in 2022 including Total War:
Warhammer 3, Warhammer 40,000: Darktide and Lost Crusade. Deals
have been announced to launch a major online game set in the Age of
Sigmar universe as well as Space Marine 2. We continue to search
for the right long term partners to exploit other IP opportunities:
we have some further exciting plans in development.
Entertainment
In terms of media and entertainment, progress continues and we
are delighted to have signed up a major LA based agency to help us.
Eisenhorn is in development and the subject of discussions with
potential distribution partners. We have made some solid progress
in our writers' room and have a number of further exciting live
action and animated projects in development. We remain ambitious
and patient.
Licensing income
Royalties receivable in the period increased by GBP11.4 million
to GBP20.1 million. This includes GBP13.7 million (2020: GBP2.3
million) of guaranteed royalty income which is recognised on the
signing of new licence contracts, while additional royalty income
earned was equal to the prior period at GBP6.4 million. As always,
this income continues to be uncertain and, as we recognise
guaranteed royalty income in full on signing the contract, it is
even harder to predict when further income will be recognised.
Sales
Reported sales grew by 3% to GBP191.5 million for the period. On
a constant currency basis, sales were up by 6% from GBP186.8
million to GBP198.8 million; split by channel this comprised: Trade
GBP112.8 million (2020: GBP104.0 million), Retail GBP43.3 million
(2020: GBP36.9 million) and Online GBP42.7 million (2020: GBP45.9
million).
Trade
Trade achieved growth of 4% with growth in all key countries. In
the period, our net number of trade outlets increased by c.500
accounts to 5,900 which helped drive forward sales in this channel.
It's worth noting that a large number of independent retailers now
also sell our products online, meaning our customers have more
choice than ever about where to buy Warhammer. It's also worth
reminding you that our success with our independents is not
completely in our control. The viability of these stores is
completely dependent on the store owner and their choices on what
to sell. Our experts offer fantastic support on product range and
advice on the right volumes to ensure we give them the best chance
of success. Most also sell third party products e.g. collectible
cards and board games. We lost 340 accounts in the period which was
broadly in line with long term trends.
The recruitment and retention of EU nationals working in the UK
has, as you would expect, not been easy. We are currently running
at 20% vacancies (compared to normal levels of 10%).
Retail
In the period, we opened, including relocations, four stores.
After closing eight stores, our net total number of stores at the
end of the period is 519. Retail remains a challenging environment,
so we are being pragmatic with our store opening programme. Our
stores are improving at different rates, as a direct consequence of
whether they can open or not.
Our Warhammer World store at our HQ in Nottingham has been open
for 8 months now and is trading at pre-COVID levels. Our Warhammer
café stores in Dallas and LA, together with our relocated store on
Tottenham Court Road in London, are also performing well. We hope
the second half gives us the opportunity to once again show our
full and unique retail offer and get back to our face-to-face
training sessions.
The majority of our stores are profitable (34 stores are
not).
Online
Online sales declined by 10% compared to the same period last
year, maintaining the step change in sales order levels against the
prior year is the plan.
As noted above, our customers have a lot of options when it
comes to shopping for Warhammer online and are able to buy our
products both through our own web stores (reported in Online) and
through those of independent retailers (reported in Trade).
The board has signed off on the first phase of the web store
upgrade. The capital investment is c.GBP6 million. To date we have
spent GBP0.3 million.
Asia
We continue to make some good progress, hampered a little by the
process of toy safety certification. We had our first external
audit which was passed. Various delays have resulted in a decision
to move our new release schedule by c. 10 weeks to allow us to
catch up. Not great for our customers in Asia, however, without the
accreditation our long term growth would be threatened by legal
restrictions. The work on the new Warhammer café store in Shanghai
has also been pragmatically paused to ensure it gets off to the
best possible start. Like all of our other stores, it will be run
as a profitable store. We are hopeful about opening a new café
style store in Tokyo in 2022. We have in the period, increased RRPs
by circa 25%, aligning with our global pricing strategy.
Risks and uncertainties
The board has overall responsibility for ensuring risk is
appropriately managed across the Group and has carried out a robust
assessment of the principal risks to the business. The top four
strategic risks to the Group are regularly reviewed by the board.
The principal strategic risks identified in 2021/22 are discussed
below. These risks are not intended to be an extensive analysis of
all risks that may arise but more importantly are the ones which we
believe could cause business interruption in the period ahead.
-- Digital selling strategy - as sales through our online
channel are over 20% of sales, it is now more important than ever
that we have a robust plan in place which ensures we are making
product available to our customers in a manner consistent with
modern consumer expectations/behaviour. We have approved and
started the development work on our new online store. We are also
investing in the support functions to ensure it is delivered on
time.
-- IT strategy and delivery - with a number of significant
business projects in play, all of which are dependent on IT
support, there is a requirement for a robust IT strategy which
enables us to deliver key strategic projects as well as supporting
day to day activities. We are keeping the structure of our global
IT team under review to ensure the IT support needs of the business
can be delivered.
-- Media - whilst this remains an area for future growth, it is
imperative that exploitation of our IP through media channels does
no harm to our core business. Our IP steering team meets every
month to discuss ongoing and future exploitation, to ensure that
all use of our IP, through all channels, is approved, correct and
consistent. They are fully supported by our in-house legal team who
will act when needed.
-- Social responsibility - we don't intend to 'greenwash' or to
be 'politically correct'. We believe we are already good corporate
citizens and we have been making some good progress quietly in the
background. We are looking for ways we can support global
initiatives including climate change, diversity and equality. We
have recruited a senior manager to document a realistic plan to
make some progress, forever.
Our biggest risk is senior management becoming complacent. I
will continue to do my best to make sure it does not happen.
We consider that COVID-19 is not a specific risk that we can
mitigate against, but we are managing our response to it alongside
our operational risks. We also do not consider that we have
material solvency or liquidity risks.
Outlook
We have proven once again that the Warhammer hobby creates
exciting experiences and allows people around the world to come
together and have some fun. We continue to focus on making the best
miniatures in the world and to document and deliver an exciting
operational plan.
I'm mindful of the uncertainty caused by COVID-19 and the
expectation of more growth given our recent performance. To help
inform shareholders and followers of Games Workshop as best we can,
we will continue to provide regular updates to the market. We are
pleased to confirm that we continue to trade in line with
expectations and look forward to providing a further update to the
market in due course.
Finally, I'm once again immensely proud of the global teams'
performance, the ongoing support of our customers and those unsung
heroes that keep us safe and well, thank you.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources, in
light of the level of cash generation, to continue in operational
existence for at least twelve months from the date of approval of
the condensed consolidated interim financial information. For this
reason, they have adopted the going concern basis in preparing this
condensed consolidated interim financial information.
Statement of directors' responsibilities
The directors confirm that this condensed consolidated interim
financial information has been prepared in accordance with IAS 34,
'Interim Financial Reporting', as adopted by the United Kingdom,
and that the interim management report herein includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely: an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of (I) the principal risks
and uncertainties for the remaining six months of the financial
year; (ii) material related party transactions in the first six
months and (iii) any material changes in the related party
transactions described in the last annual report. There have been
the following changes to the board since the annual report for the
year to 30 May 2021:
-- The resignation of Sally Matthews as non-executive director
and chair of the audit and risk committee from 28 November 2021.
The recruitment process for a non-executive director is
underway.
-- The retirement of Nick Donaldson as non-executive director from 31 May 2021.
A list of all current directors is maintained on the investor
relations website at investor.games-workshop.com.
By order of the board
Kevin Rountree
CEO
Rachel Tongue
CFO
CONSOLIDATED INCOME STATEMENT
Six months Six months
Notes to to
28 November 29 November Year to
2021 2020 30 May 2021
GBPm GBPm GBPm
------------------------------------ -------- -------------- -------------- -------------
Revenue 2 191.5 186.8 353.2
Cost of sales (60.2) (45.7) (96.3)
------------------------------------ -------- -------------- -------------- -------------
Gross profit 131.3 141.1 256.9
Operating expenses 2 (62.9) (57.8) (121.5)
Other operating income - royalties
receivable 20.1 8.7 16.3
------------------------------------ -------- -------------- -------------- -------------
Operating profit 2 88.5 92.0 151.7
Finance income 0.1 0.1 0.2
Finance costs (0.4) (0.5) (1.0)
------------------------------------ -------- -------------- -------------- -------------
Profit before taxation 4 88.2 91.6 150.9
Income tax expense 5 (17.0) (17.7) (28.9)
------------------------------------ -------- -------------- -------------- -------------
Profit attributable to owners
of the parent 71.2 73.9 122.0
------------------------------------ -------- -------------- -------------- -------------
Basic earnings per ordinary
share 6 217.2p 226.1p 372.7p
Diluted earnings per ordinary
share 6 216.6p 224.0p 370.5p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE
Six months Six months
to to
28 November 29 November Year to
2021 2020 30 May 2021
GBPm GBPm GBPm
--------------------------------------------- -------------- -------------- -------------
Profit attributable to owners of
the parent 71.2 73.9 122.0
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations 1.8 (1.6) (3.1)
--------------------------------------------- -------------- -------------- -------------
Other comprehensive income/(expense)
for the period 1.8 (1.6) (3.1)
--------------------------------------------- -------------- -------------- -------------
Total comprehensive income attributable
to owners of the parent 73.0 72.3 118.9
--------------------------------------------- -------------- -------------- -------------
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED BALANCE SHEET
Restated
28 November 29 November
Notes 2021 2020 30 May 2021
GBPm GBPm GBPm
----------------------------------- -------- ------------ ------------- ------------
Non-current assets
Goodwill 1.4 1.4 1.4
Other intangible assets 8 25.7 20.3 23.7
Property, plant and equipment 9 52.9 42.2 49.8
Right-of-use assets 10 46.4 49.7 46.0
Deferred tax assets 10.0 8.9 10.1
Trade and other receivables 11 15.2 7.1 6.3
----------------------------------- -------- ------------ ------------- ------------
151.6 129.6 137.3
----------------------------------- -------- ------------ ------------- ------------
Current assets
Inventories 33.8 19.6 27.5
Trade and other receivables 11 53.5 25.5 30.6
Current tax assets 0.1 0.3 1.1
Cash and cash equivalents 88.6 96.5 85.2
----------------------------------- -------- ------------ ------------- ------------
176.0 141.9 144.4
----------------------------------- -------- ------------ ------------- ------------
Total assets 327.6 271.5 281.7
----------------------------------- -------- ------------ ------------- ------------
Current liabilities
Lease liabilities (8.1) (8.8) (8.6)
Trade and other payables (42.7) (31.7) (35.4)
Current tax liabilities (0.4) (4.5) (0.1)
Provisions for other liabilities
and charges (0.6) (0.5) (0.6)
----------------------------------- -------- ------------ ------------- ------------
(51.8) (45.5) (44.7)
----------------------------------- -------- ------------ ------------- ------------
Net current assets 124.2 96.4 99.7
----------------------------------- -------- ------------ ------------- ------------
Non-current liabilities
Lease liabilities (39.5) (41.4) (38.4)
Other non-current liabilities (0.6) (0.6) (0.6)
Provisions for other liabilities
and charges (1.8) (1.8) (1.7)
----------------------------------- -------- ------------ ------------- ------------
(41.9) (43.8) (40.7)
----------------------------------- -------- ------------ ------------- ------------
Net assets 233.9 182.2 196.3
----------------------------------- -------- ------------ ------------- ------------
Capital and reserves
Called up share capital 1.6 1.6 1.6
Share premium account 16.3 14.4 14.5
Other reserves 3.9 3.6 2.1
Retained earnings 212.1 162.6 178.1
----------------------------------- -------- ------------ ------------- ------------
Total equity 233.9 182.2 196.3
----------------------------------- -------- ------------ ------------- ------------
Comparative financial information for right-of-use assets,
non-current lease liabilities and current lease liabilities has
been restated. See note 10 for further information.
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 30 May 2021 and 31 May 2021 1.6 14.5 2.1 178.1 196.3
Profit for the six months to
28 November 2021 - - - 71.2 71.2
Exchange differences on translation
of foreign operations - - 1.8 - 1.8
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - 1.8 71.2 73.0
Transactions with owners:
Share-based payments - - - 0.6 0.6
Shares issued under employee
sharesave scheme - 1.8 - - 1.8
Deferred tax charge relating
to share options - - - (0.4) (0.4)
Current tax credit relating to
exercised share options - - - 0.3 0.3
Dividends paid to Company shareholders - - - (37.7) (37.7)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 1.8 - (37.2) (35.4)
---------------------------------------- --------- --------- ---------- ---------- --------
At 28 November 2021 1.6 16.3 3.9 212.1 233.9
---------------------------------------- --------- --------- ---------- ---------- --------
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 31 May 2020 and 1 June 2020 1.6 13.1 5.2 113.8 133.7
Profit for the six months to
29 November 2020 - - - 73.9 73.9
Exchange differences on translation
of foreign operations - - (1.6) - (1.6)
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - (1.6) 73.9 72.3
Transactions with owners:
Share-based payments - - - 0.5 0.5
Shares issued under employee
sharesave scheme - 1.3 - - 1.3
Deferred tax charge relating
to share options - - - (0.3) (0.3)
Current tax credit relating to
exercised share options - - - 0.8 0.8
Dividends paid to Company shareholders - - - (26.1) (26.1)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 1.3 - (25.1) (23.8)
---------------------------------------- --------- --------- ---------- ---------- --------
At 29 November 2020 1.6 14.4 3.6 162.6 182.2
---------------------------------------- --------- --------- ---------- ---------- --------
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 31 May 2020 and 1 June 2020 1.6 13.1 5.2 113.8 133.7
Profit for the year to 30 May
2021 - - - 122.0 122.0
Exchange differences on translation
of foreign operations - - (3.1) - (3.1)
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - (3.1) 122.0 118.9
Transactions with owners:
Share-based payments - - - 1.2 1.2
Shares issued under employee
sharesave scheme - 1.4 - - 1.4
Deferred tax credit relating
to share options - - - 0.1 0.1
Current tax credit relating to
exercised share options - - - 1.5 1.5
Dividends paid to Company shareholders - - - (60.5) (60.5)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 1.4 - (57.7) (56.3)
---------------------------------------- --------- --------- ---------- ---------- --------
At 30 May 2021 1.6 14.5 2.1 178.1 196.3
---------------------------------------- --------- --------- ---------- ---------- --------
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months
to to
Notes 28 November 29 November Year to
2021 2020 30 May 2021
GBPm GBPm GBPm
---------------------------------------- -------- ------------- --------------------- -------------
Cash flows from operating activities
Cash generated from operations 7 76.5 100.0 164.8
UK corporation tax paid (15.3) (13.3) (28.8)
Overseas tax paid (0.5) (2.4) (3.3)
---------------------------------------- -------- ------------- --------------------- -------------
Net cash generated from operating
activities 60.7 84.3 132.7
---------------------------------------- -------- ------------- --------------------- -------------
Cash flows from investing activities
Purchases of property, plant and
equipment (8.8) (5.2) (17.4)
Purchases of other intangible
assets (1.3) (1.2) (2.9)
Expenditure on product development (5.4) (4.3) (9.7)
Interest received 0.1 0.1 0.2
---------------------------------------- -------- ------------- --------------------- -------------
Net cash used in investing activities (15.4) (10.6) (29.8)
---------------------------------------- -------- ------------- --------------------- -------------
Cash flows from financing activities
Proceeds from issue of ordinary
share capital 1.8 1.4 1.4
Repayment of principal under leases (5.7) (5.3) (10.9)
Dividends paid to Company shareholders (37.7) (26.1) (60.5)
---------------------------------------- -------- ------------- --------------------- -------------
Net cash used in financing activities (41.6) (30.0) (70.0)
---------------------------------------- -------- ------------- --------------------- -------------
Net increase in cash and cash
equivalents 3.7 43.7 32.9
Opening cash and cash equivalents 85.2 52.9 52.9
Effects of foreign exchange rates
on cash and cash equivalents (0.3) (0.1) (0.6)
---------------------------------------- -------- ------------- --------------------- -------------
Closing cash and cash equivalents 88.6 96.5 85.2
---------------------------------------- -------- ------------- --------------------- -------------
The following notes form an integral part of this condensed
consolidated interim financial information.
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The Company is a limited liability company, incorporated and
domiciled in the United Kingdom. The address of its registered
office is Willow Road, Lenton, Nottingham, NG7 2WS.
The Company has its listing on the London Stock Exchange.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
May 2021 were approved by the board of directors on 26 July 2021
and have been delivered to the Registrar of Companies. The report
of the auditor on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under either section 498 (2) or section 498 (3) of the Companies
Act 2006.
This condensed consolidated interim financial information has
not been audited or reviewed pursuant to the Auditing Practices
Board guidance on 'Review of Interim Financial Information' and
does not include all of the information required for full annual
financial statements.
This condensed consolidated interim financial information for
the six months ended 28 November 2021 has been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and with IAS 34, 'Interim Financial
Reporting' as adopted by the United Kingdom. The condensed
consolidated interim financial information should be read in
conjunction with the annual financial statements for the year ended
30 May 2021 which have been prepared in accordance with IFRSs as
adopted by the United Kingdom.
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they have adopted the going concern basis in preparing
this condensed consolidated interim financial information.
This condensed consolidated interim financial information was
approved for issue on 11 January 2022.
This condensed consolidated interim financial information is
available to shareholders and members of the public on the
Company's website at investor.games-workshop.com.
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, revenues and expenses. Actual
results may differ from these estimates.
In preparing this condensed consolidated interim financial
information, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 30 May
2021.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 May 2021, as
described in those financial statements.
The Group considers that there are no new accounting standards,
amendments or interpretations issued by the IASB, but not yet
applicable, which have had, or are expected to have a significant
effect on the financial statements.
2. Segment information
As Games Workshop is a vertically integrated business,
management assesses the performance of sales channels and
manufacturing and distribution channels separately. Segment
information for the periods ending 30 May 2021 and 29 November 2020
has been restated to better reflect the structure of the Group.
Manufacturing costs previously reported within the 'Design to
manufacture' segment are now combined with the 'Merchandising and
logistics' segment to create the 'Design, merchandising and
logistics' segment. Costs previously reported within the 'Media and
entertainment' segment are now included within the 'Licensing'
segment. The segments previously reported as 'Group' and
'Operations and support' have been combined into a single segment;
'Group, operations and support'. At 28 November 2021, the Group is
organised as follows:
- Sales channels: these channels sell product to external
customers, through the Group's network of retail stores,
independent retailers and online via the global web stores. The
sales channels have been aggregated into segments where they sell
products of a similar nature, have similar production processes,
similar customers, similar distribution methods, and if they are
affected by similar economic factors. The segments are as
follows:
- Trade: this sales channel sells globally to independent
retailers, agents and distributors. It also includes the Group's
magazine newsstand business and the distributor sales from the
Group's publishing business (Black Library).
- Retail: this includes sales through the Group's retail stores,
the Group's visitor centre in Nottingham and global
exhibitions.
- Online: this includes sales through the Group's global web
stores and digital product sales through external affiliates and
subscription sales through digital platforms.
- Design, manufacturing and logistics: this includes the design
studio (that creates all of the IP and the associated miniatures,
artwork, games and publications), the production facilities, the
warehouses, logistics costs and charges for inventory provisions.
This includes adjustments for the profit in stock arising from
inter-segment sales.
- Group, operations and support: this includes the Company's
overheads, support services (marketing, IT, accounting, payroll,
personnel, procurement, legal, health and safety, customer services
and credit control) to activities across the Group and undertakes
strategic projects.
- Licensing: this is royalty income earned from third party
licensees after deducting associated licensing costs, including the
development of licensed media.
The chief operating decision-maker assesses the performance of
each segment based on operating profit, excluding share option
charges recognised under IFRS 2, 'Share-based payment', charges in
respect of the Group's profit share scheme and the discretionary
payment to employees. This has been reconciled to the Group's total
profit before taxation below.
The segment information reported to the executive directors for
the periods included in this financial information is as
follows:
Six months Six months Year ended
to to 30 May
28 November 29 November 2021
2021 2020 GBPm
GBPm GBPm
---------------------------------- ----------------- ----------------- ------------------------
Trade 108.1 104.0 194.8
Retail 41.9 36.9 70.7
Online 41.5 45.9 87.7
Total external revenue 191.5 186.8 353.2
---------------------------------- ----------------- ----------------- ------------------------
For information, we analyse external revenue further below:
Restated Restated
Six months Six months Year ended
to to 30 May
28 November 29 November 2021
2021 2020 GBPm
GBPm GBPm
-------------------------------------- -------------- ------------------------- ------------------------
Trade
UK and Continental Europe 44.8 45.9 82.3
North America 47.8 44.6 85.4
Australia and New Zealand 5.7 5.2 10.2
Asia 5.1 4.3 9.0
Rest of world 3.7 2.7 5.6
Black Library 1.0 1.3 2.3
Total Trade 108.1 104.0 194.8
-------------------------------------- -------------- ------------------------- ------------------------
Retail
UK 11.8 7.5 13.3
Continental Europe 9.5 9.8 16.4
North America 16.2 12.9 28.2
Australia and New Zealand 3.2 5.4 10.3
Asia 1.2 1.3 2.5
Total Retail 41.9 36.9 70.7
-------------------------------------- -------------- ------------------------- ------------------------
Online
UK 9.3 11.6 22.2
Continental Europe 8.6 9.4 18.0
North America 14.4 16.2 30.6
Australia and New Zealand 2.5 3.2 5.5
Asia 0.2 0.3 0.5
Rest of world 0.7 0.7 1.3
Digital and apps 5.8 4.5 9.6
Total Online 41.5 45.9 87.7
-------------------------------------- -------------- ------------------------- ------------------------
Total external revenue 191.5 186.8 353.2
-------------------------------------- -------------- ------------------------- ------------------------
Operating expenses by segment are regularly reviewed by the
executive directors and are provided below:
Restated Restated
Six months Six months Year ended
to to 30 May
28 November 29 November 2021
2021 2020 GBPm
GBPm GBPm
--------------------------------------------- -------------- ------------- -----------------------
Trade 4.9 5.3 9.1
Retail 25.7 25.5 50.2
Online 4.6 3.6 7.5
Design, manufacturing and logistics 1.7 1.9 4.0
Group, operations and support 17.2 14.1 35.0
Licensing 1.3 0.6 1.3
Total segment operating expenses 55.4 51.0 107.1
Share-based payment charge 0.6 0.5 1.2
Profit share scheme and discretionary
payment charge 6.9 6.3 13.2
Total group operating expenses 62.9 57.8 121.5
--------------------------------------------- -------------- ------------- -----------------------
Total segment operating profit is as follows and is reconciled
to profit before taxation below:
Restated Restated
Six months Six months Year ended
to to 30 May 2021
28 November 29 November GBPm
2021 2020
GBPm GBPm
------------------------------------------- -------------- ------------- ------------------------
Trade 3.5 3.4 6.4
Retail 1.6 1.4 2.8
Online 1.4 1.5 2.6
Design, manufacturing and logistics 88.6 98.6 175.3
Group, operations and support (17.9) (14.2) (36.0)
Licensing 18.8 8.1 15.0
------------------------------------------- -------------- ------------- ------------------------
Total segment operating profit 96.0 98.8 166.1
Share-based payment charge (0.6) (0.5) (1.2)
Profit share scheme and discretionary
payment charge (6.9) (6.3) (13.2)
Total group operating profit 88.5 92.0 151.7
Finance income 0.1 0.1 0.2
Finance costs (0.4) (0.5) (1.0)
------------------------------------------- -------------- ------------- ------------------------
Profit before taxation 88.2 91.6 150.9
------------------------------------------- -------------- ------------- ------------------------
3. Dividends
A dividend of GBP16.4 million (50 pence per share), declared in
the prior period was paid in the six months to 28 November 2021.
Dividends of GBP13.1 million (40 pence per share) and GBP8.2
million (25 pence per share) were also declared and paid in the six
months to 28 November 2021. A further dividend of GBP11.5 million
(35 pence per share) was declared on 18 November 2021 and was paid
on 5 January 2022.
Dividends of GBP9.8 million (30 pence per share) and GBP16.3
million (50 pence per share) were declared and paid in the six
months to 29 November 2020. A further dividend of GBP19.7 million
(60 pence per share) was declared on 7 December 2020 and was paid
on 25 January 2021.
4. Profit before taxation
Profit before taxation is stated
after charging/(crediting): Six months Six months Year ended
to to 30 May 2021
28 November 29 November GBPm
2021 2020
GBPm GBPm
--------------------------------------- --------------- --------------- ---------------
Depreciation
- Owned property, plant and equipment 5.7 4.3 9.2
- Right-of-use assets 5.5 5.4 11.0
Amortisation 4.2 2.8 6.0
Impairment of computer software - - 0.4
Redundancy costs and compensation
for loss of office 0.3 0.5 1.2
Inventory provision creation 3.2 0.9 0.9
Reversal of inventory provisions - (0.8) -
--------------------------------------- --------------- --------------- ---------------
5. Tax
The taxation charge for the six months to 28 November 2021 is
based on an estimate of the full year effective rate of 19.3%
(2020: 19.3%). While we continue to expect a rate above that for a
business with activities based solely in the UK due to higher
overseas tax rates, it will be offset by increased elimination of
inter group profit at those same rates.
6. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the parent by the weighted average number
of ordinary shares in issue throughout the relevant period.
Six months Six months Year ended
to to 30 May 2021
28 November 29 November
2021 2020
------------------------------------- ------------- ------------- ------------------------
Profit attributable to owners of
the parent (GBPm) 71.2 73.9 122.0
------------------------------------- ------------- ------------- ------------------------
Weighted average number of ordinary
shares in issue (thousands) 32,786 32,691 32,733
------------------------------------- ------------- ------------- ------------------------
Basic earnings per share (pence
per share) 217.2 226.1 372.7
------------------------------------- ------------- ------------- ------------------------
Diluted earnings per share
The calculation of diluted earnings per share has been based on
the profit attributable to owners of the parent and the weighted
average number of shares in issue throughout the relevant period,
adjusted for the dilution effect of share options outstanding at
the period end.
Six months Six months Year ended
to to 30 May 2021
28 November 29 November
2021 2020
------------------------------------------ ------------- ------------- ------------------------
Profit attributable to owners of
the parent (GBPm) 71.2 73.9 122.0
------------------------------------------ ------------- ------------- ------------------------
Weighted average number of ordinary
shares in issue (thousands) 32,786 32,691 32,733
Adjustment for share options (thousands) 79 297 194
------------------------------------------ ------------- ------------- ------------------------
Weighted average number of ordinary
shares for diluted earnings per
share (thousands) 32,865 32,988 32,927
------------------------------------------ ------------- ------------- ------------------------
Diluted earnings per share (pence
per share) 216.6 224.0 370.5
------------------------------------------ ------------- ------------- ------------------------
7. Reconciliation of profit to net cash from operating activities
Six months to Six months Year ended
28 November 2021 to 30 May 2021
GBPm 29 November GBPm
2020
GBPm
--------------------------------------------------- ------------- ------------------------
Operating profit 88.5 92.0 151.7
Depreciation of property, plant
and equipment 5.7 4.3 9.2
Depreciation of right-of-use assets 5.5 5.4 11.0
Impairment of intangible assets - - 0.4
Loss on disposal of property, plant
and equipment 0.1 0.2 -
Loss on disposal of intangible
assets 0.3 - 0.1
Amortisation of capitalised development
costs 3.5 2.2 4.8
Amortisation of other intangibles 0.7 0.6 1.2
Share-based payments 0.6 0.5 1.2
Changes in working capital:
-(Increase)/decrease in inventories (6.6) 1.5 (6.2)
-Increase in trade and other receivables (32.0) (5.9) (10.8)
-Increase in trade and other payables 10.0 0.2 3.1
-Increase/(decrease) in provisions 0.2 (1.0) (0.9)
------------------------------------------- ------- ------------- ------------------------
Net cash from operating activities 76.5 100.0 164.8
------------------------------------------- ------- ------------- ------------------------
8. Other intangible assets
28 November 29 November 30 May 2021
2021 2020 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ -----------------------
Net book value at beginning of
period 23.7 17.6 17.6
Additions 6.5 5.5 12.6
Disposals (0.3) - (0.1)
Amortisation charge (4.2) (2.8) (6.0)
Impairment - - (0.4)
Net book value at end of period 25.7 20.3 23.7
--------------------------------- ------------ ------------ -----------------------
9. Property, plant and equipment
28 November 29 November 30 May 2021
2021 2020 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ -----------------------
Net book value at beginning of
period 49.8 42.0 42.0
Additions 8.6 4.9 17.7
Disposals (0.1) - (0.1)
Exchange differences 0.3 (0.4) (0.6)
Depreciation charge (5.7) (4.3) (9.2)
Net book value at end of period 52.9 42.2 49.8
--------------------------------- ------------ ------------ -----------------------
10. Right-of-use assets
Restated Restated
28 November 29 November 30 May 2021
2021 2020 GBPm
GBPm GBPm
--------------------------------- -------------- -------------- -------------------------
Net book value at beginning of
period 46.0 36.8 36.8
Additions 5.2 19.1 23.0
Disposals - (0.2) (0.5)
Exchange differences 0.7 (0.6) (2.3)
Depreciation charge (5.5) (5.4) (11.0)
Net book value at end of period 46.4 49.7 46.0
--------------------------------- -------------- -------------- -------------------------
The comparative right-of-use assets and corresponding lease
liabilities have been restated to reflect the extension of the
lease on our warehouse in Memphis, US. The lease renewal was signed
in the year ending 31 May 2020 but was not recognised as an
addition under IFRS 16. Accordingly, a prior year adjustment was
made during the year ended 30 May 2021 to restate the 2020 balances
to their correct amounts. The impact of the adjustment was to
increase right-of-use assets by GBP4.9 million and increase current
lease liabilities by GBP0.2 million and non-current lease
liabilities by GBP4.7 million. The impact to the income statement
and cash flow statement is below GBP0.1million and has therefore
not been adjusted. There was no impact on any period prior to
2020.
11. Trade and other receivables
28 November 29 November 30 May 2021
2021 2020 GBPm
GBPm GBPm
----------------------------------- ------------ ------------ -----------------------
Trade receivables 11.4 10.7 7.8
Prepayments and accrued income 14.1 6.8 9.9
Other receivables 28.0 15.1 19.2
Total trade and other receivables 68.7 32.6 36.9
Non-current receivables:
Other receivables 15.2 7.1 6.3
----------------------------------- ------------ ------------ -----------------------
Non-current portion 15.2 7.1 6.3
----------------------------------- ------------ ------------ -----------------------
Current portion 53.5 25.5 30.6
----------------------------------- ------------ ------------ -----------------------
Included within prepayments and accrued income are contract
assets relating to uninvoiced royalty income amounting to GBP1.3
million (2020: GBP1.1 million).
Included within other receivables is invoiced royalty income of
GBP26.1 million (2020: GBP12.5 million) of which GBP13.7 million
(2020: GBP5.5 million) is non-current, being in respect of
guarantee instalments due in over one year. Also included in other
receivables is a VAT receivable of GBP15.5 million (2020: nil) in
respect of outstanding European VAT receipts following Brexit.
12. Seasonality
The Group's monthly sales profile demonstrates an element of
seasonality around the Christmas period which impacts sales in the
month of December.
13. Commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is GBP5.8 million (2020: GBP3.6 million).
14. Related party transactions
There were no material related-party transactions during the
period.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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IR DBGDBBGBDGDG
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