A tale of two pastimes: Hornby and Games Workshop
Article Plan
Games Workshop
Games Workshop and Hornby both presented trade statements that highlighted strong Christmas season results while also indicating potential economic challenges.
Games Workshop (GAW), a company that makes miniature wargames best known for its Warhammer series, stated that core sales for the six months ending on November 27 surpassed £200 million for the first time and increased 11% compared to the same period last year. Pretax profit decreased 5.2% to £83.6 million at the same time.
The company also increased its payout, from 65p per share to 130p per share, bringing the total payment for FY23 to 295p per share.
Despite being down about 26% from its most recent peak in September 2021, the price of GAW shares has increased more than 10 times since 2017. Even yet, the company's shares have increased 53% from their September 2022 low, and bulls are seeking to retake the 2021 high of around 12,000p. Games Workshop will want to build on its 2022 comeback in 2023 with momentum on its side and a newly inked contract with Amazon to launch a Warhammer-based series. As the business recorded flat sales in North America during the period year-over-year, the 119 recently opened trade stores in the US should aid in achieving that objective.
Games Workshop also stated that it is committed to using license agreements to internationally leverage its intellectual property outside of its main business. Net cash inflows from licensing at that time were £13.4m, more than double the £6.2m in 2021. Investors are particularly interested in GAW's licensing business.
However, Games Workshop cautioned that external factors could hinder the execution of its business plan. These included lingering Covid-19 effects in China and Japan, increasing hiring costs in the UK due to Brexit, and a £2 million loss in net revenue from sales in Russia as a result of the war in Ukraine.
Trading in the afternoon saw a 4.6% decline in GAW shares.
Hornby
There has been a worse time for Hornby (HRN), a producer of models and collectibles, notably Scalextric racing kits. Its shares fell 17.24% as a result of the firm expressing worry about its full-year forecast owing to elements associated with the UK's cost of living problem. To year's end, Hornby predicted a small underlying loss before tax.
On the plus side, sales over the Christmas season outperformed those during the same period last year, and total group sales for the FY thus far have outperformed those during the same period last year by 6%. Sales made directly to consumers increased by 44% over the previous year. Hornby cited pricing rises, greater product availability, and investments in e-commerce platforms as the causes of the improvement.
In addition, Hornby is introducing a brand-new train control system that connects through Bluetooth to smartphones or tablets and is intended to displace existing market-standard solutions. Ahead of the debut of its 2023 product line, the business said that its order book was still solid.
Some may wonder if the model/miniatures sub-sector will be able to withstand long-term competition from higher-tech hobby alternatives in light of the fact that the larger retail industry will be reporting full-year results this month. Will Hornby's model railroads, Airfix kits, and Scalextric survive the 2020s and beyond? Games Workshop's licensing approach attempts to combine its IP with emerging digital forms of entertainment. It is difficult to respond given that nostalgia for the 1980s and 1990s has become a self-sustaining business, and we wouldn't be shocked if models continue to be well-liked for many years to come.
Was This Article Helpful?
Click on a star to rate it!
Thank you for your vote!
Average Rating: 4.8/5 Votes: 46
Be the first to rate this post!
Latest Posts
The Hydration Equation: Are You Drinking Enough Water?
Navigating Family Dynamics: Tips for Handling Conflict and Communication
