News Column

Games Workshop's Annual Profit Drops On Revenue Fall, Restructuring

July 29, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Games Workshop Group PLC reported a huge drop in profits and failed to pay a dividend in its last financial year after posting a significant fall in revenue which it said was due to business restructuring.

The maker of miniature figures and gaming sets posted a pretax profit of GBP12.4 million for the financial year to June 1, compared with GBP21.4 million a year earlier, on the back of lower volumes and sales. During the year, the group also booked GBP4.5 million in exceptional costs associated with its restructuring.

Revenue for the year fell by 8.2% on a reported basis to GBP123.5 million, down from GBP134.6 million the prior year, hit by declining sales in most of its markets.

The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.

"Next year, internally, there will be some disruption remaining from the big reorganisation we have just made and from the one man store programme. Nevertheless I still believe we should be growing by opening new stores; particularly in North America and Germany," said Chairman and Acting Chief Executive Officer Tom Kirby in a statement.

The games retailer did not declare a dividend for the year, compared with last year when it declared a dividend of 58 pence per share.

"Beyond next year, the business ought to be able to increase sales (single digit growth, not more) for many years and to provide owners with a steady flow of dividends... Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares," said Kirby.

Games Workshop said that it expects to benefit from the more focused selling operation and lower cost base, although profits will remain under pressure while it implements these changes.

Games Workshop shares were down 2.7% at 588.88 pence Tuesday morning.

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Source: Alliance News

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