When a company says “broadly in line” with expectations, it usually means “a bit below”
Games Workshop Group PLC (LSE:GAW), the fantasy and science fiction-themed miniatures gaming company, said sales in December were broadly in line with its expectations.
Revenue in the six months to the end of November 2021 rose to £191.5mln from £186.6mln in the same period of 2020. The company had indicated a month ago revenue would be not less than £190mln. Had exchange rates remained from a year earlier, revenues this time around would have been £198.8mln.
Profit before tax of £88.2mln was down from £92.0mln the year before but comfortably met the company’s guidance of profits of at least £86mln.
Operating profit on a constant currency basis improved to £94.2mln from £92.0mln the previous year but using actual exchange rates slipped to £88.5mln.
The company, which had already declared dividends of 100p in respect of the current fiscal year, declared another dividend, of 65p, taking the amount for the year to date to 165p.
“We are pleased to confirm that we continue to trade in line with expectations and look forward to providing a further update to the market in due course,” said Kevin Rountree, the chief executive officer of Games Workshop.
“Our profit before tax is down £3.4 million; however, excluding foreign exchange movements and increased carriage costs and paying our staff more (a good thing!), our net core business profits are broadly in line with last year’s record performance. When we say the core business, we are referring to our business that focuses on realising our intellectual properties as miniatures and supporting products, excluding licensing,” Rountree said.
“In the short term, some of our global freight and raw material suppliers have been passing some cost increases on to us – we will be working hard over the period ahead to ensure they are fair. The negative impact of these on our gross margin is about 3%. To date, the discount we offer our trade accounts and our global RRPs [recommended retail prices] have not significantly changed, pragmatically this is under constant review,” Rountree said.
Read More: Games Workshop Group PLC traded “broadly in line” with expectations