Online continues to drive growth at Games Workshop over the summer

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Games Workshop this week showed how online has helped its business continue to grow over the summer. It said its online and trade channels both helped to drive a “healthy” rise in sales over the summer that beat board expectations. 

Estimated sales came in at about £90m in the three months to August 30 – 15.4% up on the £78m reported at the same time last year. Operating profit for the quarter is expected to reach £45m, 60.7% up from £28m a year earlier, while royalty income is set to grow by 50% to £3m from £2m last time. 

“This,” said Games Workshop in a pre-AGM trading statement, “has been driven by healthy growth in our online and trade channels. However, our retail [store] channel is still recovering from the Covid-19 closures earlier in 2020. The longer-term impact on the group as a result of the ongoing pandemic is still unknown.”

It said that while sales were currently ahead of the previous year, it was still early in the year.

Games Workshop, a Top350 retailer in RXUK Top500 research, will issue a 50p per share dividend as part of company policy to distribute “truly surplus cash”. 

During the Covid-19 pandemic Games Workshop took the approach of fully closing the business – from its factory to its online business and its stores – for around six weeks before reopening gradually once its operations were Covid-secure, and once its shops were permitted to reopen from the middle of June. Nonetheless, in July it reported what it described as its best set of full-year results in its history, reflecting a strong lockdown appetite for its Warhammer game and related merchandise. 

Commenting on the figures reported this week, Global Data retail analyst Alex Hardy, said: “While other retailers have used online to mitigate the damage of store closures, Games Workshop is one of the few that has been able to grow despite Covid-19 related restrictions. It has capitalised on the need in lockdown to indulge in hobbies, and fantasy gaming has proved an idea form of much needed escapism for many, with a strong online community helping to drive sales.

“Games Workshop’s cost-conscious strategy, which includes not spending money on prime offices or shopping locations or mass market advertising, has been critical to its profitability over the period.”

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