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KillagoreFaceslasha

GW's half-year report.

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Looks very positive , quite interesting that their Retail income % has dropped in comparison to last year (but is still substantially higher than their online sales)

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Reported sales grew by 54%

Sales in online shops up 71%

~180% increase in total profit

Incredible!

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29 minutes ago, PJetski said:

Reported sales grew by 54%

Sales in online shops up 71%

~180% increase in total profit

Incredible!

Usually means big investments. Not a bad thing ;) also there were rumours of same problems in the factories so big repair update costs could be a big factor 

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13 minutes ago, Kramer said:

Usually means big investments. Not a bad thing ;) also there were rumours of same problems in the factories so big repair update costs could be a big factor 

If the rumourmill is to be believed, GW are waiting for the electricity sub-station to be upgraded on the industrial park.  They've upgraded all of the machines to the point where there's not enough power to run any more! (queue image of Scotty from StarTrek running round shouting about not enough power)

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What's that you say, they had an awesome set of 6m results in the year when a new (and significantly so) edition of 40k got released, who knew!

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I hate these posts. I really don't understand the fetish to look at a company's revenue.

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A positive review of GW's financial situation? Time to post your favorite 'GW hater rationalizations'! My favorite so far are(and these are all REAL):

It's only because they stop manufacturing kits that are sold out to save money!(understanding neither business nor the report)

AoS only SEEMS like it's selling well because people buy AoS kits for -commenter's pet game that no one's ever heard of-!

This is all bullstuff! Last few years financials were basically the same! (proceeds to give full year reports in response to this half year report)

HAHA I found one small area of the financials that aren't 100% fantastic(as far as I interpret it) they must be about to collapse!

It's cause of the toddler's buying primaris while REAL MEN keep buying second ed metal marines off ebay!(lololololololol)

It's cause marines are obsolete now!(...ignoring that primaris are actually terrible compared to vanillas on the table)

 

 

Honorable mention to a clearly sarcastic comment on BoLS that fooled just a ton of people and was pretty hilarious to follow.

 

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6 minutes ago, Keldaur said:

I hate these posts. I really don't understand the fetish to look at a company's revenue.

Plenty of people actually invest in GW and in this particular case it's actually relevant to the community at large: GW did a complete 180 in customer relations in the past few years. They went from basically the most hated company in tabletop gaming to a bro that still makes mistakes sometimes. Following the financials just makes sense after that because it tells you whether or not their community outreach matters. If they did all this stuff(GHB chapter approved, awesome new models, 8th ed 40k being the most balanced edition in a long long time, warhammer TV and Facebook, etc) and profits DECLINED it would be the end of those programs.

 

But since profits SKYROCKETED we're much more likely to see GW double down on the community involvement. Following the financials gives fantastic clues about the direction GW is headed in and is actually a very interesting case study for industry as a whole. 

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Not really, it doesn't tell you much rather than post-rationalizations withouth any sense. GW did a complete 180 in customer relations also years ago, it was at their zenit when the revenue and growth was great,  and i am sure you remember it. The only thing you can conclude from here is that GW has earned good money this year (a 40k edition and dexes, shadespire, necromunda release in a very short span of time too), what path they are following afterwards is theirs to choose, and it wouldn't be the first time a company which has successes runs away from their community for extra profits.

But if it helps you to feel like they will go in the right direction because revenue was great, good for you.

Edited by Keldaur
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11 minutes ago, Keldaur said:

Not really, it doesn't tell you much rather than post-rationalizations withouth any sense. GW did a complete 180 in customer relations also years ago, it was at their zenit when the revenue and growth was great,  and i am sure you remember it. The only thing you can conclude from here is that GW has earned good money this year (a 40k edition and dexes, shadespire, necromunda release in a very short span of time too), what path they are following afterwards is theirs to choose, and it wouldn't be the first time a company which has successes runs away from their community for extra profits.

But if it helps you to feel like they will go in the right direction because revenue was great, good for you.

This whole paragraph is as grammatically broken as it is factually incorrect. GW started the 180 in customer relations AFTER the incredibly botched release of Age of Sigmar almost tanked the company AFTER years of stagnant growth, I'm sure you'd remember it if you had bothered to look at the financials at the time. 

And yes, it doesn't give you a perfect road-map of GW going forward but it HAS indicated that the things they are doing currently are working, so we're likely to see more of it. Doesn't mean it will guarantee another increase in profits, it's just a hint at policy for the near future.

But hey, if keeping your head in the sand, staying ignorant, and straight making things up makes you feel better, good for you.

Edited by BURF1
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52 minutes ago, Keldaur said:

I hate these posts. I really don't understand the fetish to look at a company's revenue.

This is a post that deliberately adopts an antagonistic viewpoint in direct contrast to those held by the larger majority, contributing nothing substantial while directly attempting to garner replies in the form of a circular argument which will go nowhere and resolve nothing, other than leaving a bad taste in the replier's mouth.


Otherwise commonly referred to as "bait"

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7 minutes ago, Malfunct Bot said:

This is a post that deliberately adopts an antagonistic viewpoint in direct contrast to those held by the larger majority, contributing nothing substantial while directly attempting to garner replies in the form of a circular argument which will go nowhere and resolve nothing, other than leaving a bad taste in the replier's mouth.


Otherwise commonly referred to as "bait"

Because when you create a post every response should be positive, otherwise it is a bait or trollpost. Got it.

 

22 minutes ago, BURF1 said:

This whole paragraph is as grammatically broken as it is factually incorrect. GW started the 180 in customer relations AFTER the incredibly botched release of Age of Sigmar almost tanked the company AFTER years of stagnant growth, I'm sure you'd remember it if you had bothered to look at the financials at the time. 

And yes, it doesn't give you a perfect road-map of GW going forward but it HAS indicated that the things they are doing currently are working, so we're likely to see more of it. Doesn't mean it will guarantee another increase in profits, it's just a hint at policy for the near future.

But hey, if keeping your head in the sand, staying ignorant, and straight making things up makes you feel better, good for you.

I am sure it is grammatically broken. But no, i am speaking way before that second turn around. When it actually stopped doing a lot of events and having contact with the community ('ard boyz, rogue traders, that didn't exist, ever ...) . You would remember it if you bothered to read my broken english in good faith rather than contempt. Good thing you need to resort to ad hominems against somebody with broken english because you can't make your point stand out by itself ;)

Edited by Keldaur
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Just want to remind people to be nice to each other.

To me GW have done well, recognised customer engagement is good and plan to carry on doing so. That’s the key message here 😉

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It's funny that people who were predicting doom 3 years ago based on low growth are now explaining why *good* financial reports are even more evidence that GW are on the verge of collapse. Armchair economists all, with armchairs made of salt.

For me, the interest in the financials is 2 fold.

1st, It's interesting to see how and where (in terms of channels) the company makes its' money.

2nd, I agree with previous commenters that it's brilliant news that the company's fortunes changed for the better *after* they began to make efforts to be the company that people wanted.

We have specialist games back, and they've have gone far harder into social media and community engagement than (afaik) any vaguely comparable company has managed... and they're making money doing it!

I'm sure there will be any number of "AoS is trash" and "Primaris are for idiots" explanations elsewhere, but the company is doing very well while also being much nicer.

Whodathunk?

 

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They also did great to get well known youtubers like the Yogscast involved in warhammer, that also pulled quite a lot of people in I think.

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It' s great that GW had a fantastisc 6 months. Hopefully this means that 2018 will bring even more beautiful miniatures than 2017! Great hobby times!

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In previous statements they’ve invested into operations and systems, which appears to be starting to pay off. 

I’d love to see a breakdown into products and regions... but I don’t think I’ll ever see that day. 

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Tzeentch rules as always. GW has changed and, of course, it brought them success. This is what happens when you follow the Architect of Fates ^_^ when they started making really nice minis with right proportions and anatomy instead of balls with legs and hands calling them "dwarves" (sorry, but not really. They were just balls), they started climbing up. Professionals instead of "hobbyists" do wonders, really.

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On 1/12/2018 at 12:15 AM, Keldaur said:

I hate these posts. I really don't understand the fetish to look at a company's revenue.

 

I understand where you're coming from, but as someone coming from a finance background (and in fact that's why I can afford to play Warhammer), it's not the revenue, it's the financial report itself, which is full of great info.  As these documents are required by law for tax purposes, they give you a truer representation than just hype.

For example, one issue that came up was concerns about GW's production capabilities.  It was a legit concern for me as a player because it took 2 months for my order to come in at my Warhammer Store.  Then I heard there were issues with the electric grid, etc.  Well,  these reports don't give you the bill readings, but it DOES tell you of investments.

It says GW just purchased 4,948,000 pounds worth of investment in property, plant and equipment.  Some of that is replacing old equipment, but you look at their overall physical assets, GW actually gradually decreased their facilities (maybe due to cost-efficiencies, it's not necessarily a bad thing) for a decade.  Back in 2008, they had 26 million pounds of property, plant, equipment, compared to 22 million just last May.  The number did go up a little before the launch of Age of Sigmar.  Since then, in just the last 6 months, it's now at about 25 million (remember some of the investment was to replace old equipment), close to what it was 10 years ago, and this is just during this half-year.

TL;DR - for those of you concerned GW is just cutting costs, it's obviously not, and you can tell how much effort they're putting into it.  Considering they had about 26 million pounds' worth of equipment at their peak, and in just the last 6 months they invested another 5 mil, that's pretty substantial in a short time.

And there's more...

 

On 1/12/2018 at 12:53 AM, BURF1 said:

GW started the 180 in customer relations AFTER the incredibly botched release of Age of Sigmar almost tanked the company AFTER years of stagnant growth, I'm sure you'd remember it if you had bothered to look at the financials at the time. 

And yes, it doesn't give you a perfect road-map of GW going forward but it HAS indicated that the things they are doing currently are working, so we're likely to see more of it. Doesn't mean it will guarantee another increase in profits, it's just a hint at policy for the near future.

 

This was EXACTLY one of the most interesting things from looking at GW financials over the long-term.  It's not just money, it's time.

With a product launch like Age of Sigmar, you expect that sales spike.  It didn't come when AoS initially came out, it was like delayed until the General's Handbook and Season of War campaign.  And when we looked at how GW segments their revenue, we saw the largest growth came from the Trade (i.e. FLGS) and Retail (i.e. Warhammer Stores) of 30+%, whereas Mail Order growth at that time had still impressive but much smaller growth of less than 10%.  Well, with Season of War being a store-based campaign, it kind of seemed obvious, but it was clear Place & Promotion were the drivers during the summer event.

When I saw that, about 1 year ago, there were already rumours of 8th ed 40k coming, but I told everyone around me there was ABSOLUTELY going to be a 40k summer event similar to the Season of War.  Of course, turned out I was right, with the Konor Campaign.

TL;DR - instead of relying on rumours, the GW CEO telegraphs some of his moves in the financials, not in any comments.

And on that note...

 

23 hours ago, MrCharisma said:

I’d love to see a breakdown into products and regions... but I don’t think I’ll ever see that day. 

 

It turns out they do break down by continents but only in the full-year reports.  It's something fun to read over a lunch break with an Excel open, here's 10 years of reports:

https://investor.games-workshop.com/annual-reports-and-half-year-results/

It's funny because though they don't normally break down by product line, they let slip roughly how much sell-in of Blood Bowl they had during launch at FLGS, just to give you a rough idea.  They accidentally reveal a little more than they intend to every once in a while.

Right now, they still bring down by their channels.  As mentioned above, at the macroscopic level GW looks at, and the results were very interesting in this report.  I already said last year, they saw huge growth in FLGS and their own Warhammer Stores.  This year:

 

Overall growth: 53% (or 54% due to currency fluctuations)

Trade (i.e. FLGS) growth: 63%

Retail (i.e. Warhammer Stores) growth: 35%

Mail Order growth: 71% (as mentioned above)

 

Isn't that discrepancy interesting?  I'm fascinated by it.  Last year, both the physical stores that represent Trade and Retail increased at a very similar rate of 30+% each while Mail Order grew less than 10%.  These 6 months, it's a very different picture.  I've got 2 different theories, and it might be both, but I find it very curious.

Now, this is an AoS forum, but a huge driver of growth for the 6 months represented here really happen to coincide with 8th ed 40k.  Conventional wisdom suggests then Retail, with its most dedicated sales staff and fan base, should've seen the highest growth, as many people have to "upgrade" all their rulebooks and codices.  It's the opposite.

(Remember, this is overall revenue, not profitability, so it's not like they just rented out super expensive locations or anything.  This is just sales growth.)

I'll leave that here for your own thoughts, but it's not just the revenue or profitability that is interesting, but these little glitches in the Matrix that can be very telling.

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I completely forgot to mention the most pertinent thing regarding AoS from this report, but you probably already know, especially if you got handed a Malign Portents "Painting Competition" leaflet in your Warhammer Store (i.e. Month 1 buy a Start Collecting boxset, Month 2 buy a matching Harbinger, Month 3 buy even more).

It's that there will be a summer AoS event I believe, similar to Season of War or Konor Campaign, later this year.  So it's time to muster armies for that if anything.

Here's my reasoning, and I'm guessing again I'm stating the obvious, is that this has been a time of incredible growth for GW, that definitely related to sales spikes from major new updates for all players (i.e. General's Handbook 1 was the initial spike for AoS, 8th ed 40k for this half-year).  Companies want to maintain a steady course as best they can.  It's NOT just "I want more money," but it's also "I want to keep affording to pay these new staff I hired due to new demand, I want to pay upkeep for this new equipment I invested in."

It's hard work to maintain this high level, much less grow.  So just to maintain, GW needs to continue all the activities that worked in the past, then to grow they need to bet on new offerings that will hopefully sell on top of that.  The analogy I'm thinking of is playing against the same opponent in Warhammer.  You played the 1st game, you found some units were very successful, you noticed you lost some units, but you still won.  Now it's a new game against him again with the same factions, so it's starting from scratch, but you're probably going to keep the successful units from the 1st game, while maybe trying some other newer units, based on what you learned from your last game.

The summer event is just ONE of the successful things GW wants to keep, I think, as well as the things you already know about, the next Blood Bowl season, the next Necromunda season, more army books, that's all business as usual, but just wanted to cite the summer campaign especially so you guys have time to prepare.

(If I were to present a really crazy idea, I'd say they might re-introduce Talisman next year, either in the Feb-March timeframe.  If they were really clever and their current sales is going really well due to, say, Malign Portents...they might actually NOT re-release Talisman for awhile ironically.  Because they anticipate Talisman will be pretty popular, like how the 40k spin-off Shadow War: Armageddon sold out in 15 minutes, they might want to save that release to bail them out at a bad time.)

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1 hour ago, N1SB said:

It's that there will be a summer AoS event I believe, similar to Season of War or Konor Campaign, later this year.  So it's time to muster armies for that if anything.

I feel a bit like I'm stealing the jam from your doughnut with my next sentance.  GW have revealed that the summer campaign is going to be part of Malign Portents, which is why they're doing the army build/paint competition during January ~ March :)  The summer events are awesome though, I participated in Season of War (painting and gaming - what's not to like), but sadly didn't mange to do Fate of Konor as nowhere near me was accepting results :(

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:D I offer you my whole doughnut.  Seriously, has the event already been confirmed? 

Despite being mainly a 40k player, I actually participated in Season of War and missed Fate of Konor.  After Season of War, I actually painted a miniature to commemorate one particular battle, it was week 4 with the dueling champions scenario.  I'm eager to continue Forging a Narrative with that.

I'm eager to see if we get more news on Talisman soon.  I do NOT know, but it's one of the things I'm watching out for.

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Nothing has been confirmed yet, but if you look at the website (https://malignportents.com/) they are doing a lot of investment in getting people up to speed with the background (two stories a week) and trying to build it up. It's safe to assume there will be a summer event around this ;) 

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