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Rare sighting of Warhammer (well GW) in the boring, grown up real world...


JPjr
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Good news for the long term health of the game and war-games/roleplaying in general...

https://www.economist.com/britain/2018/10/06/britons-are-increasingly-turning-to-tabletop-games-for-entertainment?fsrc=scn/tw/te/bl/ed/britonsareincreasinglyturningtotabletopgamesforentertainmentnewmodelarmies

Who knows maybe post-Brexit the UK can transition to an entirely. plastic orc based economy, I mean it's as good as any other idea that's been floated so far.

 

Screen Shot 2018-10-10 at 18.42.45.png

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yeah, weirdly back in May when I first started thinking about getting back into I did look to see how the company was doing and noticed it's shares had been going gangbusters the past 12 months.

Someone's made some serious money, sadly I decided to sink my own ever dwindling funds directly into paint and plastic... ?

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I always told myself that if I win the lottery I'm buying stock in GW.  I might still do that, as I believe that tabletop gaming is one of the best hobbies that anyone can have.  Miniature wargaming in particular is a great hobby, and I go to great lengths to explain why that is to anyone who questions it.

I mean, when the recession hit in 2008, tabletop gaming as an industry was growing.  I don't have the data handy, but part of my masters degree work required an in depth study of the economics of the tabletop gaming hobby.  It's nice to see some new data on that!

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I think the growth will only continue, at least for quite a while. They're on a solid roll, and articles like that will garner more attention from investors, which will likely see them jump on the train, for however long, which in turn will push their stock further, which will create more interest.. And so on ;)

Don't take my word for it though. I don't know much about economics and stocks. Only a nifty hunch for cause and effect. 

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GW always paid out a high dividend to shareholders, it was one reason the Kirby era got very focused on the shareholders meetings; we'd see short term products introduced or products dropped to inflate the numbers just before the meeting. However they got so focused on cutting costs and boosting profits for the shareholders that htey lost sight of the customers.

When GW had a massive attitude change and then released a new 40K with every army having an index it was a roaring success. All those customers they'd been bleeding over the years returned in full force and the impact has been hard. On GW its been massive sales, on the other companies many have felt the pinch. When you consider how many Kickstarters made hundreds of thousands through to millions in funding alone it was clear that the wargame market has some serious money held up within it and that GW was letting it run through its fingers

 

Another aspect is the specialist games which in the past had appeared to be side projects run alongside main  ones; which meant many got dropped after a while because GW staff would be focused on the next big marine release and wouldn't pay attention to the specialist game. Right now GW appears keen to keep them around - heck Bloodbowl alone spawned 2 or 3 major lines in 3rd party companies and was holding events and tournaments for years without GW producing anything for it. I think also they've had a change in how much profit they consider to be viable - I think the Kirby era was always looking for those Golden Goose massive sales; whilst current era I think they are happier turning a smaller profit, but one that is continual on projects rather than all or nothing fits and stops. 

 

 

That said GW knows that this growth won't continue and they are planning to ease off. What they are in is an exceptional bubble - plus during times of stress hobbies often do well because people are less likely to save and more likely to entertain themselves (distract from the bad news all the time) and spend their disposable income. However they are also about the only major miniatures maker that is pushing into new markets; the childrens books, the computer games (yes many are small studio inhibited, but Dawn of War and Total War are big games with big markets) etc... They are pushing to reach out to expand their market - more I think to ensure that they've a solid new generation of gamers growing up rather than resting on a maturing market that will only reduce in time. 

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The only problem is it's probably Kirby who has benefitted from this more than anyone, he issued a bucketload of shares to him and his partner before stepping down. Not sure if it's still the case but when Rountree took over Kirby was still with the company just not in charge. Rountree deserves a medal on top of whatever bonus he (must have?) received for turning GW around, business wise and community wise.

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Overall GW shares are still a good buy due to the high dividends they've always paid out.

At some point that'll dry up for a year or two, so they can build a US or Far East factory, to streamline global distribution, but then it'll go back to paying out between 30 and 90p per share.

All in all, it looks like a good choice for your pension fund

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On 10/11/2018 at 11:22 AM, El Syf said:

The only problem is it's probably Kirby who has benefitted from this more than anyone, he issued a bucketload of shares to him and his partner before stepping down. Not sure if it's still the case but when Rountree took over Kirby was still with the company just not in charge. Rountree deserves a medal on top of whatever bonus he (must have?) received for turning GW around, business wise and community wise.

Reading the most recent financial statement, Tom Kirby is no longer on the board in any capacity anymore as the transition period where he was there in an advisory role finished.

On 10/11/2018 at 9:39 AM, Overread said:

GW always paid out a high dividend to shareholders, it was one reason the Kirby era got very focused on the shareholders meetings; we'd see short term products introduced or products dropped to inflate the numbers just before the meeting. However they got so focused on cutting costs and boosting profits for the shareholders that htey lost sight of the customers.

Oddly, as bad as it was for "the hobby" I actually think it helped GW to become a much leaner company for some things.  There was a big push on reducing costs which ultimately resulted in GW bringing most of their production in house which in turn meant that they were able to perfect their plastic production and get to the quality they are achieving now.  The customer & hobby did lose out, but that's firmly in the past now and as they say, every cloud has a silver lining :)

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18 hours ago, Arkiham said:

the £ bombing helped alot as over seas sales rocketed.

the fact brexit is a thing put a spanner into the economy and help gw at the same time. 

Thing is I don't know if that is true. Even though the £ went down, GW doesn't sell from the UK overseas and it doesn't allow its 3rd party stores to do so either. They region restrict sales and then set their own exchange rate value. So even though the £ went down in value the GW products overseas didn't reduce in price. In fact the only wing of GW that would have benefited was Foregeworld until very recently (where most of the international prices went way up). 

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A lot of stuff sold abroad is still made in the UK and then imported out to the rest of the world. A weak pound means manufacturing and UK logistics are low comparative to elsewhere in the world where trading is happening. The dollar has also been rising a lot since 2016 and the US is the biggest market. The UK and US are also keeping a stranglehold on interest rates and inflation has been fairly low over the past few years. All of this means that a box of space marines sold in the US today is worth more to the company in real terms than the same box might have been a few years ago. 

The pound is likely to start rising once a deal for Brexit is announced, which in principle should be before the end of 2018. However, the UK office for auditing has said that most businesses have not been correctly advised of the likely risks by government. There is also a strong potential for major trade disruption when the UK formerly exits the EU early next year. That could possibly result in significant loss to all UK businesses especially those exporting products. 

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