Games Workshop Reports Record Financial Results in Annual Report
Why we think this is very good
The financial results are exceptionally strong across all key metrics. Revenue has grown significantly, with core revenue up 14.2% and licensing revenue surging by 69.4%. More importantly, profitability has improved substantially, with operating profit up 29.5% and basic EPS increasing by 29.7%. The company has also strengthened its cash position and improved its margins. While there are some potential risks, such as new tariffs and an ongoing IT systems replacement project, these don't overshadow the overall positive performance. The outlook remains optimistic, with the company focused on continued operational improvements and innovation. However, the high valuation suggests that much of this good news may already be reflected in the share price, which could limit short-term upside potential.
Key Points
- Core revenue up 14.2% to £565.0m
- Licensing revenue increased 69.4% to £52.5m
- Total operating profit up 29.5% to £261.3m
- Basic EPS rose 29.7% to 594.9p
- Cash and cash equivalents increased to £132.6m from £107.6m
- Core operating profit margin improved from 35.3% to 37.5%
- Potential £12m impact from new tariffs in 2025/26
- Ongoing IT systems replacement project
- High valuation with P/E ratio of about 25.7
Summary
Games Workshop has delivered an exceptional performance in its annual results. Core revenue grew by 14.2% to £565.0m, while licensing revenue surged by 69.4% to £52.5m. Importantly, operating profit increased by 29.5% to £261.3m, and basic EPS rose by 29.7% to 594.9p. The company's cash position strengthened, with cash and cash equivalents increasing to £132.6m from £107.6m. Margins also improved, with the core operating profit margin rising from 35.3% to 37.5%. The company remains focused on operational improvements and innovation, although it notes potential challenges from new tariffs. Despite the strong performance, the high valuation (P/E ratio of about 25.7) suggests much of the good news may already be priced in.