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Games Workshop to repay UK gov furlough payments


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Actually even in the Kirby era GW operated with no loans over their heads. There's also been some confusion and there are thoughts that some payments (management bonuses and amounts to share holders) can't be paid/raised/adjusted until after the government handouts are paid back. There's some confusion most likely because many firms aren't in a position to pay them back yet, whilst those who could are still likely hedging their bets against not having too. 

 

GW is taking a very positive step both morally and financially - using good times to clear a debt over their heads and move on. Very in keeping with their general mode of operation - their lack of debt and thus lack of fear of rising loan interest rates has helped save them many times over because when the sales take a downturn; they aren't left with a huge loan repayment ontop of operating costs. 

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6 minutes ago, El Syf said:

Just so I understand clearly; the money firms have been receiving to make furlough payments has to be paid back at some point?

Or are you referring to the other financial assistance on offer to companies?

In the UK at least, the furlough money is a grant, not a loan, and as such is not repayable. GW (and The Spectator spits) are doing it out of what must assumedly be a sense of civic duty or an eye for good publicity.

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Yeah the UK is a grant, I believe the idea being that repayment will basically come through taxes. GW might be trying to lead the way (esp since they are now quite a big playeron the stock market for the UK) in terms of encouraging more bigger firms to repay the grant when possible. The idea being that in a years time if the big-names have repayed or started repaying, then it will help lower the tax increases which in turn stimulates the economy. 

 

In theory if enough big firms put money back into the system then the tax only has to increase to cover smaller firms who likely were harder hit or are not as robust at recovery. 

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Yes. Entirely optional to pay back and suggests they are in a healthy position.  The spectator are the only company I know to be paying it back in the UK. Ikea are doing the same in other countries.

It does depend a lot on sector though, I can’t see many restaurant chains having the ability to do so.

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Aye and the tourism industry in general won't be paying back this year - but if many firms who can do and if they setup a culture of paying back then, when other firms can (in a year or two) it should really help governments and the economy in general. Of course it won't recoup all the costs involved, but it will at least help tackle some of the costs in a direct manner. 

 

Again companies should be wanting to do this as anything which reduces the paid costs means that taxes should be lower and that means more money in the consumer's pocket to spend on products. 

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sort of.

Furlough is a grant as has been said that has conditions attached to it, but it WILL be paid back.  The UK gov. have yet to confirm how that payback will happen but it's widely accepted that this will come through taxes when the economy recovers from the pandemic.

It's not free money in any way.  It's a life support system to try and mitigate having to lay off staff - which is the biggest overhead a company faces, by paying their salaries or a chunk of.  However, the longer this goes on means that it's still no guarantee that a job is safe unfortunately.

I've been furloughed and now I'm under threat of redundency so it was no guarantee.

Its done with the best of intentions, in the hope it will mitigate casualties and it's truly honourable that GW have said you know what... we're good.  you can hav ethe cash back. Many cash rich companies won't be that honourable, taking this opportunity to cut heads, people and restructure using the excuse of C-19 as their get out of jail card.

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Although some people claim The Spectator is "far right" (an exaggeration - much like the way The Guardian or BBC are accused of being"far left"), it does have a classic liberal (i.e. libertarian) and economically right-wing leaning (so, traditional Tories, basically)

As a result, keeping government aid would probably not align too well with its stated principles or, more crucially, those of its readership.

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I'm not sure if it is correct but I have read in another thread that GW can't pay dividents on shares or make bonus payment as long as they have furlough payments from the goverment.

So paying back the furlough payments is most likely an act for their shareholders.

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24 minutes ago, Overread said:

I believe the furlough isn't tied to bonuses/dividends; that's government bailouts for companies. 

At least in germany it was a big topic that in April and May that companies that give dividents shouldn't get government bailouts. I don't know if it was carried out that way in the end

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12 minutes ago, EMMachine said:

At least in germany it was a big topic that in April and May that companies that give dividents shouldn't get government bailouts. I don't know if it was carried out that way in the end

It could well have been a condition imposed.  Using tax payer money to pay shareholders was never going to go down well.

I would also suspect from an analyst point of view this very open and public move would be a good way of boosting your share price in the current market.

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Think this is absolutely fantastic for GW to be doing.  That's in addition to topping up their staff to 100% wage too (furlough only paid 80% up to a set value).  My interpretation is this is GW pre-empting that furlough payback may be related to company profits (so a supplemental corporation tax).  Hopefully more places follow this example.  From a hobby perspective, it does show that GW is in a healthy position as a business!

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