not as good as they are painted?

Those of us who remember () as a small business run by two hobbyists from the back of a van have to blink twice when we see the company featured in the FTSE 250.

Founded in 1975 by Ian Livingstone CBE and Steve Jackson, its initial mission was to bring the wildly successful Dungeons & Dragons (D&D) fantasy role-playing (FRP) game to Britain’s shores but it really started to carve out its own niche when it developed Warhammer, a tabletop miniatures wargame based on a world not a million miles away from the world of D&D.

Hard to believe that it is 40 years since Steve Jackson and I opened our first Games Workshop retail shop in April 1978 in a little side street in West London. The queue outside was inspiring! pic.twitter.com/SlyOfgEqHZ

— Ian Livingstone (@ian_livingstone) April 28, 2018

Over a period of several decades, it slowly grew, its stores operating as a kind of creche for pre-teens – the quid pro quo being Mum or Dad would drop off Irving or Daniella for a couple of hours for an afternoon session of dice rolling and tape measuring and then come back and succumb to pester power for that new model of a Dark Elf with the really cool jagged terbutje (usually passed on the left-hand side, as my gaming group invariably used to quip).

As well as selling (nothing but) its own products in its own stores, it also supplied independent games shops and if there were many complaints in the gaming hobby about a Games Workshop outlet always mysteriously appearing in the same town as a shop that was shifting a lot of Warhammer and Warhammer 40k stock, well, that’s business.

The business really seemed to fly, however, when the company took the controversial decision to turn many of its shops into one-man operations (which meant the end of the creche) and to focus more on selling directly (if you’ll forgive the use of an adverb) to consumers.

The decision not to license its intellectual property to Blizzard Entertainment, who went on to create the phenomenally successful World of Warcraft computer game, was probably a big mistake but generally, the Games Workshop war machine has enjoyed many successes.

Painting toy soldiers is a great lockdown activity

The global pandemic did not slow it down; if anything, it provided a boost, as evidenced by the shares hitting a new high at the end of 2020, rising from 6,105p at the end of 2019 to 11,200p. At the end of 2016, you could have got the shares at around £7, which barely covers the cost of an Ork (no, that’s not a typo).

Over that time (well, mid-2016 to mid-2020), the market capitalisation of the company has risen from 1.4 times annual turnover to more than 10 times that.

The price/earnings ratio has soared from 11.9 to 53.4 while the dividend yield has slumped from 9.0 to 0.6.

Remember, these ratios are from mid-2020; the shares have risen by a quarter since then.

OK, the ratios are not the sort of bonkers metrics you can find for Tesla but has the valuation, as today’s near 7%…