TIDMGAW
RNS Number : 1615M
Games Workshop Group PLC
10 January 2023
GAMES WORKSHOP GROUP PLC
10 January 2023
HALF-YEARLY REPORT
Games Workshop Group PLC ('Games Workshop' or the 'Group')
announces its half-yearly results for the 26 week period to 27
November 2022.
Highlights:
26 weeks to 26 weeks to
27 November 2022 28 November 2021
--------------------------------------- ----------------- -----------------
Core revenue GBP212.3m GBP191.5m
Licensing revenue GBP14.3m GBP20.1m
Revenue GBP226.6m GBP211.6m
Revenue at constant currency GBP211.7m GBP211.6m
Core operating profit GBP70.7m GBP69.7m
Licensing operating profit GBP12.9m GBP18.8m
Operating profit GBP83.6m GBP88.5m
Operating profit at constant currency GBP75.7m GBP88.5m
Profit before taxation GBP83.6m GBP88.2m
Net increase in cash - pre-dividends GBP68.1m GBP41.4m
paid
Earnings per share 202.4p 217.2p
Dividends per share declared in
the period 165p 100p
Dividends per share paid in the
period 165p 115p
Kevin Rountree, CEO of Games Workshop, said:
"Games Workshop and the Warhammer hobby are in great shape.
Another rewarding and successful period for the global team with
core sales for the six months of over GBP200 million for the first
time. We will continue to focus on making the best miniatures in
the world, sign new licensing contracts with partners to exploit
our IP outside of our core business and support our staff. I'm so
proud of their considerable hard work and commitment, thank you
all."
For further information, please
contact:
Games Workshop Group PLC investorrelations@gwplc.com
Kevin Rountree, CEO
Rachel Tongue, CFO
Investor relations website investor.games-workshop.com
General website www.games-workshop.com
See the glossary on page 84 of the 2022 annual report for
details on the alternative performance measures.
FIRST HALF HIGHLIGHTS
26 weeks to 27 November 2022 and 28 November 2021:
Revenue and operating profit at actual rates
Core Licensing Total
-------------------- ---------------- -------------- ----------------
2022 2021 2022 2021 2022 2021
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ------- ------ ------ ------- -------
Trade 120.9 108.1 - - 120.9 108.1
Retail 48.7 41.9 - - 48.7 41.9
Online 42.7 41.5 - - 42.7 41.5
Licensing - - 14.3 20.1 14.3 20.1
-------------------- ------- ------- ------ ------ ------- -------
Revenue 212.3 191.5 14.3 20.1 226.6 211.6
Cost of sales (76.0) (60.2) - - (76.0) (60.2)
-------------------- ------- ------- ------ ------ ------- -------
Gross profit 136.3 131.3 14.3 20.1 150.6 151.4
-------------------- ------- ------- ------ ------ ------- -------
Operating expenses (65.6) (61.6) (1.4) (1.3) (67.0) (62.9)
-------------------- ------- ------- ------ ------ ------- -------
Operating profit 70.7 69.7 12.9 18.8 83.6 88.5
-------------------- ------- ------- ------ ------ ------- -------
Revenue and operating profit at constant currency
Core Licensing Total
-------------------- ---------------- -------------- ----------------
2022 2021 2022 2021 2022 2021
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ------- ------ ------ ------- -------
Trade 111.8 108.1 - - 111.8 108.1
Retail 46.0 41.9 - - 46.0 41.9
Online 41.3 41.5 - - 41.3 41.5
Licensing - - 12.6 20.1 12.6 20.1
-------------------- ------- ------- ------ ------ ------- -------
Revenue 199.1 191.5 12.6 20.1 211.7 211.6
Cost of sales (71.4) (60.2) - - (71.4) (60.2)
-------------------- ------- ------- ------ ------ ------- -------
Gross profit 127.7 131.3 12.6 20.1 140.3 151.4
-------------------- ------- ------- ------ ------ ------- -------
Operating expenses (63.2) (61.6) (1.4) (1.3) (64.6) (62.9)
-------------------- ------- ------- ------ ------ ------- -------
Operating profit 64.5 69.7 11.2 18.8 75.7 88.5
-------------------- ------- ------- ------ ------ ------- -------
Foreign exchange rates
Our currency exposures are the euro and US dollar:
euro US dollar
2022 2021 2022 2021
Rate used for the balance
sheet at the period end 1.16 1.18 1.21 1.33
Average rate used for earnings 1.17 1.17 1.18 1.37
INTERIM MANAGEMENT REPORT
Games Workshop and the Warhammer hobby are in great shape.
Strategy
The half year feels like a good time to remind everyone what
Games Workshop is aiming for and achieving:
-- We are committed to the continuous development of our
intellectual property ('IP') and making the Warhammer hobby and our
business ever better.
-- We are committed to our core strategy (and it has not
changed): to make the best fantasy miniatures in the world, to
engage and inspire our customers, and to sell our products globally
at a profit. We intend to do this forever. Our decisions are
focused on long-term success, not short-term gains.
-- We are committed to exploiting our IP outside of our core
business, globally through licensing agreements.
We measure our long-term success by seeking a high return on
investment. In the short term, we measure our success on our
ability to grow sales whilst maintaining our core operating profit
margins. The way we go about implementing this strategy is to
recruit the best staff we can. We look for those with the
appropriate attitude and behaviour a given job requires, and for
those who are aligned with our principles and who are quality
obsessed.
Update
The global team has delivered another record half year sales
performance led by a great recovery in all channels in Australia,
Canada and the UK. We have added an additional 119 trade outlets in
North America and although our global online sales in constant
currency have declined slightly (in line with our forecasts) our
core engagement online metrics continue to grow.
We set ourselves a higher sales growth goal, so whilst this is a
record number, it isn't where we wanted to be, particularly in the
US, which was flat, at constant currency, against a record year
last year. We are working as a senior team to improve our joined up
plan in the US. Our current level of global sales is relatively new
to us, so we are rapidly changing and learning as we go: managing
and forecasting new release products for our broad range, at our
highest ever volumes, is a reasonable challenge. We are working
even harder on range management processes to ensure our whole offer
gets its due attention at all times: as a team we need to scale
with a little more nous.
Our global projects continue to be delayed - it remains an
ongoing challenge to integrate new IT systems when we are still
heavily reliant on working with our legacy IT systems. Finishing
these projects and upgrading our systems continue to be a key area
of focus. We are making some progress but it's costing us more time
and money - we will remain cost conscious.
Our operating costs have been managed exceptionally well and are
in line with our internal targets but our core gross margin at
actual rates is 4.3% down (see below). We continue to face external
cost pressures so we are managing the ones in our control
appropriately.
We know that ongoing success is built on our investment in our
global team, especially in our design studios: they will always
design the best miniatures. During the period that has continued.
Our core average return on capital employed, averaged over a 12
month period, has remained in our target range at 112% at November
2022 compared to 118% at May 2022.
We are very confident in the Warhammer hobby, and our business
model and its resilience.
External factors impacting the delivery of our commercial
plan
We are staying positive - so I'll just simply list the impacts
of Covid-19, Brexit and the horrendous war in Ukraine (our
heartfelt thoughts go out to all) here to note.
Covid-19 - We are still operating with additional safety
measures in China and Japan and elsewhere our staff who ask to wear
face coverings can. We continue to actively encourage our staff to
do the right thing for themselves and their colleagues; having the
Covid-19 vaccines is top of the list, and we mandate they follow
all local government guidelines. The lost sales from China of
c.GBP1 million for the last six months are not as bad as we
forecast. Some of our retail countries have only fully opened in
the period reported so their performance is not yet a fair
like-for-like.
Brexit - Brexit has added extra costs but we now see these as
the new cost of doing business, so we are managing what's in our
control to improve our margins. To mitigate staff recruitment gaps,
especially those with language skills in the UK based European
Trade team, in November we opened a new trade sales office in
Barcelona. At the period end we had an outstanding GBP12 million of
VAT receivable from the French tax authorities. We expect to
receive this imminently.
War in Ukraine - half year c.GBP2 million lost in net revenue
from trade sales in Russia.
Performance
Sales for the month of December are in line with our
expectations.
On a constant currency basis:
-- Core sales growth - sales growth (+4.0%) continues across
Retail (+9.8%) and Trade (+3.4%) with a small decline in Online
(-0.5%).
-- Core gross margin - down 4.5% to 64.1% in the period with
increasing volumes, offset by materials increases (+GBP2.5 million,
1.9% of core sales) and carriage cost increases (+GBP2.8 million,
1.2% of core sales) both due to external pressures. There were
increased staff costs of GBP1.0 million, 0.2% of core sales in the
design studio (investment in pay grades and increased headcount,
+20 new jobs in the period) and the incremental cost of our new
facilities (+GBP1.0 million, 0.5% of core sales). Investment in
inventory, to ensure we meet customer demand, has also resulted in
additional inventory provisioning of GBP1.2 million, 0.4% of core
sales. Our average RRP increase during the period was broadly the
same as last year.
-- Core cost to sales ratio - at 29.5% (excluding group profit
share) (2021: 28.6%) our operating expenses are under control and
increased mainly due to increases in staff costs (3% annual pay
rise and increases in headcount, +24).
-- Core operating profit - down GBP5.2 million to GBP64.5
million and profit to sales ratio is down 4.0% to 32.4%.
At actual exchange rates:
-- Net cash generated from operating activities - GBP104.7
million (2021: GBP76.5 million). Core operating profit of GBP70.7
million (2021: GBP69.7 million) includes non-cash movements
(amortisation and depreciation) of GBP19.6 million (2021: GBP16.4
million). Core working capital has reduced by GBP1.0 million since
May 2022 (2021: GBP15.8 million increase) and licensing net cash
inflows in the period were GBP13.4 million (2021: GBP6.2
million).
-- Major projects - to date GBP4.5 million spend on projects in
the first half, including warehouse and factory investment and
investment in the new webstore.
-- Returns to shareholders - we have declared GBP54.2 million in
dividends during the period (2021: GBP32.8 million).
-- Foreign exchange differences - the impact on reported
operating profits is a gain of GBP6.7 million. We don't actively
manage foreign exchange rates and we will continue to report the
impact on our results.
Cash generation - we have continued to:
-- Maintain an appropriate balance sheet to ensure we can
maintain our current level of profits and can withstand any
short-term setbacks.
-- Provide for the safe ongoing operation of our global business in an ethical way.
-- Fund our own growth - reinvest to grow sustainably and deliver our strategy.
-- Pay regular dividends to our shareholders - we return any
'truly surplus' cash as dividends as and when we have excess
cash.
We are not planning any share buybacks or acquisitions.
Key priorities
We have made some good progress with our key priorities. Each of
these is designed to ensure we deliver our exciting operational
plan and continue to engage and inspire our loyal customers.
Employees
Our performance, as ever, was driven by a great team effort.
With sales in the period growing at a slower rate than costs at
constant currency, we have continued to only recruit essential new
jobs or where we need to back-fill positions. It's a principle on
how we have run the business rather than a concern. We have
continued to support lifelong learning and training to develop the
skills needed to enable all our staff to be successful.
We have continued to develop orderly succession plans for both
the board and senior management. We continue in our commitment to
diversity and inclusion at Games Workshop.
We are committed to ensuring that all staff are paid fairly for
the job they perform and to rewarding our staff for their
considerable contribution. We always manage the business for the
long term and aim to get the right mix of annual pay rises and
variable cash rewards. From June we paid a standard 3% pay rise,
with some staff receiving a pay rise of up to 10% to benchmark
their pay to market rates. We share our success with our staff too
via the group profit share scheme.
In line with our group profit share scheme, payments in cash to
staff are GBP4.5 million (2021: GBP6.9 million). Total dividends
declared in the period reported were 165 pence per share, GBP54.2
million (2021: 100 pence per share, GBP32.8 million).
Customer focused
We have continued to be customer focused, increasing the amount
of fan content we celebrate on social media and providing focus to
the conversation around rules and game balance. Our goal remains to
reach, engage and inspire Warhammer fans everywhere and the team
has continued to develop the tools and processes needed to make
sure we can reach more people and provide them with the content and
information they need to get the most from Warhammer.
Social responsibility and sustainability
We have continued to focus on staff wellbeing, diversity and
inclusion. We are in the process of rolling out a new wellbeing
platform across Games Workshop which will provide all staff
globally with access to a wide range of support, advice and
information. We have continued to review our internal processes and
training to ensure that we always remain free from bias and any
form of discrimination.
Climate change has enormous implications for society. We
acknowledge that fully - sustainability is a necessity at Games
Workshop. We continue to develop and expand our 'sustainability
action list' which aligns our approach of just doing the right
thing with better external reporting. The action list focuses our
efforts on where we can make the biggest difference. Immediate
focal points include well thought through and deliverable site
waste reduction and extending our sustainable packaging
initiatives. More details on our progress towards TCFD and a
science-based target will be included in our 2023 annual report. It
is worth noting that the majority of our carbon footprint is in
scope 3, with a particular emphasis on emissions from purchased
goods and services (71% of our reported CO2 emissions in 2021/22).
We are working with our partners to document how we can reduce
these levels, now and as we grow, to mitigate or reduce any
impact.
Video game partners
We are always looking to add more quality long-term video game
partners to help us reach even more fans of our IP. It's been an
exciting period, with launches for 22/23 so far including Immortal
Empires mode for Total War: Warhammer III, Chaos Gate, Darktide and
Tacticus for mobile. Blood Bowl 3 launches in February 2023.
Review of the period
More Warhammer. More Often - core business
Core revenue
Reported core revenue grew by 10.9% to GBP212.3 million for the
period. On a constant currency basis, sales were up by 4% from
GBP191.5 million to GBP199.1 million; split by channel this
comprised: Trade GBP111.8 million (2021: GBP108.1 million), Retail
GBP46.0 million (2021: GBP41.9 million) and Online GBP41.3 million
(2021: GBP41.5 million).
Trade
Trade grew by 11.8% at actual rates, 3.4% at constant currency
rates, despite the loss of sales to Russia and reduced sales in
China. At constant currency, sales in North America were flat
compared to last year; although we have the highest number of
accounts ever, slow ordering rates amongst our wider retailer base
in North America have resulted in a lacklustre performance. We
expect an improvement in the second half. The bulk of our sales to
independent retailers are made via our telesales teams talking
directly to our trade accounts. Our telesales teams strive to
deliver excellent service from their locations in Memphis,
Nottingham, Sydney, Tokyo, Shanghai, Singapore, Hong Kong and Kuala
Lumpur. In the period, our net number of trade outlets globally
increased by c.80 accounts to 6,300 (not including +1,000 major
chain outlets stocking some key recruitment products).
It's worth noting that a large number of independent retailers
also sell our products online, meaning our customers have more
choice than ever about where to buy Warhammer. It's also worth
reminding you that our success with our independents is not
completely in our control. The viability of these stores is
completely dependent on the store owner and their choices on what
to sell. Most are reliant on a mix of product lines to maintain
that viability e.g. collectible cards and board games.
To address Brexit related staff vacancies in the trade team that
supports our European trade accounts in their local language, we
have opened a new sales office in Barcelona. When fully staffed it
will have c.45 staff. Our team in North America and our much
smaller teams in Australia and Asia are running at normal staffing
levels.
Retail
Our stores have performed well during the period. We are
benefitting in Australia and Continental Europe from being fully
open following Covid-19 restrictions being removed and our store
managers being allowed to offer our full retail experience. The
recovery of retail in Australia has been great to see (they now
have to keep the momentum going) and our recent addition of a new
regional retail manager in Canada is helping us as well. The UK is
recording record sales levels, including both Warhammer World at
our Nottingham HQ and our UK high footfall store on Tottenham Court
Road in London. North America retail was flat at constant currency
rates, with higher than normal comparatives in the prior period.
They delivered like-for-like growth in the last three months.
Globally we opened, including relocations, 5 stores (our plan is
c.20 new stores for the full year). After closing 6 stores, our net
total number of stores at the end of the period is 517.
Retail operating expenses, excluding events, have increased by
GBP3.6 million at actual rates and GBP2.4 million at constant
currency. At constant currency the main increase relates to staff
costs (+GBP1.1 million), we ensure we pay the right salary to
retail staff in each territory. The majority of our stores are
profitable (38 stores are not, 2021: 34 stores).
Online
Sales from Online grew by 2.9% at actual rates but fell by 0.5%
at constant currency rates compared to the same period last year.
Online sales fell across most territories (except North America),
which is in line with our commercial plan given the targeted
recovery of retail. We are seeing an increase in both our direct
through trade (orders from independent accounts for our extended
range, made on our online store) and our direct through retail
offers (orders on in store terminals for product not sold in our
stores) as our customers have a lot of options when it comes to
shopping for Warhammer. As noted above, both independent retailers
and our own stores have seen the benefit of increased in-store
customer experience post Covid-19 restrictions ending, particularly
in Australia and Continental Europe.
We are investing in a new platform for our webstore and to date
we have spent GBP4.9 million. The launch of the new webstore is
delayed due to needing more time given the complex nature of the
project. I'm disappointed with progress to date so we have some
ground to make up - we have tentatively rescheduled for a go live
date in the summer of 2023.
We remain focused on joined-up customer experiences across all
sales channels.
Design
We design, make and sell miniatures and related products under a
number of brands and sub-brands, which denote setting, tone and
product type, the key ones being:
-- Warhammer 40,000 - our most popular and recognisable brand is a space fantasy setting.
-- Warhammer: Age of Sigmar - our unique fantasy setting.
-- Horus Heresy - an offshoot of Warhammer 40,000, the Horus
Heresy brand is presented as a 'fictional history' of that universe
- launched successfully in the period reported.
The release of Warhammer: The Horus Heresy - Age of Darkness box
set in June was enthusiastically received by both existing and new
Horus Heresy collectors and marks a step change in our development
and output for this rich and popular IP. The rest of the period saw
significant releases for all our main IPs including new miniatures
and environments for WarCry and Kill Team (our Warhammer: Age of
Sigmar and Warhammer 40,000 skirmish games), new Contrast and Shade
paints for all hobbyists and a completely new race for Warhammer
40,000 - The Leagues of Votann. We remain focused on providing our
customers with a rich depth of choice of the best miniatures in the
world.
We have created 20 jobs in the period, taking our total number
of jobs in our design studio to 304. IP and design studio payroll
costs increased by GBP1.0 million to GBP6.2 million in the period;
as a percentage of core sales they have increased by 0.2% to
2.9%.
Warehouses
Warehousing projects in North America and the UK have
progressed, albeit more slowly than planned, largely due to the
complexity of robustly integrating new technology with legacy Games
Workshop systems. However, we remain confident in our technology
and equipment choices.
North America
The bedding in of new systems and processes in our Memphis
facility has enabled us to maintain a significant improvement in
the speed with which we dispatch orders to customers. The
integration complications will continue to cause us some
operational delays, however, we are confident we can meet our
target service levels with our customers.
UK - East Midlands Gateway (EMG)
Our new warehouse now directly fulfils all stock for our retail
stores across the UK and Continental Europe. Whilst the start up
was bumpy, service to these stores is now reliable. Distribution
activity for all UK and European trade accounts and online
customers will transition to EMG (from the original Eurohub
warehouse in Nottingham) in Spring 2023, approximately six months
later than planned.
UK - Nottingham
Much of the work to reconfigure and repurpose the original
Eurohub warehouse to become our primary component warehouse has
been completed. Transition of the component operation between EMG
and Eurohub is on track to be completed before the end of this
financial year.
Our major investment in warehousing, for the near term, will be
completed this financial year.
Total warehousing costs have increased by GBP2.5 million to
GBP12.2 million at actual rates; as a percentage of core sales they
have increased from 5.1% to 5.7%. This reflects the investment in
facilities and equipment in North America and UK warehouses as well
as external cost pressures on utilities and consumable costs.
Factories
We continue to manufacture all of our core products at our three
factories in Nottingham. Our manufacturing facilities and
capabilities at these sites have continued to expand with the
installation of more machinery. Combined Factories 1 and 2 now
operate 46 injection moulding machines (+8 on this time last year).
Our third Nottingham factory dedicated to paint production is fully
operational including a new paint filling and bottling line.
Our total manufacturing headcount has reduced slightly during
the period with the total number of jobs in our factories now
standing at 415. A reduction in temporary staff cost, netted
against the annual pay rise, reduced manufacturing payroll costs by
GBP1.0 million to GBP5.3 million; reducing to 2.5% from 3.3% of
core sales at actual rates.
Services
IT - we've highlighted above the challenges our relatively new
global head of IT is dealing with. The team is starting to make
some progress. They are feeling part of the solution and the
broader team rather than a support function. The goal remains the
same: our IT systems and infrastructure adapt and scale with the
business as we grow - they're currently holding us back. We will
continue to invest in the team in the period ahead, the senior IT
team must spend this investment wisely
Customer service - saw a sustained higher than normal volume of
queries (mainly, 'where's my order?') as the new warehouse systems
bedded in. The international team responded with great spirit to
ensure our customers got great service despite the circumstances
and these queries have now returned to a more normal level.
Total support services operating expenses, excluding marketing
costs, have increased by GBP0.5 million to GBP13.5 million at
actual rates; as a percentage of core sales they have decreased
from 6.8% to 6.4% in line with our operational plan. Other
operating expenses relating to design, manufacturing and logistics
increased by GBP0.2 million to GBP2.0 million at actual rates.
Marketing
Community
Warhammer-community.com remains the cornerstone of our online
presence. This blog and news site is used regularly by Warhammer
fans, consistently seeing over 100,000 visits every day, and is on
track to continue growing this year. Our social channels continue
to go from strength-to-strength and we now have an engaged
following of 1.9 million across all our social channels.
'My Warhammer' registrations continue to grow at pace and have
grown 22% over the last six months. My Warhammer is a central part
of our customer journey, enabling us to tailor our marketing
communications to what our customers are most interested in. We now
have 718,000 linked accounts.
Warhammer+
Launched in August 2021, it continues to delight and entertain a
growing subscriber base. Warhammer+ shows and animations have now
been viewed over 5 million times. Revenue is GBP3.0 million in the
period and associated development costs of GBP2.4 million. Our
subscriber numbers are 115,000.
Email
Our email campaigns continue to be one of our most effective
methods of communication. The team has worked hard to understand
our customers and develop the tools to ensure we're talking to them
about the parts of Warhammer they value most. In the six month
period, subscribers increased to just under 1 million. We continue
to look for more ways to surprise and delight our loyal fans and
bring new customers into the Warhammer hobby.
Marketing costs increased by GBP0.4 million to GBP3.8 million;
as a percentage of core sales, costs have remained flat at 1.8%.
These exclude the costs related to delivering Warhammer+ and its
content.
Events
Warhammer events and gaming conventions engaged with customers
and recruited new ones across North America, Europe, Asia, and the
UK. In November, we announced the re-launch of UK Warhammer Fest
which will deliver a celebration to around 10,000 Warhammer fans
over the 2023 April/May bank holiday weekend in Manchester. We look
forward to more events that inspire our customers, recruit new
ones, and give Warhammer fans across the world the opportunity to
meet up with each other.
Capital investment
In manufacturing we have invested GBP3.3 million in tooling and
GBP0.6m in facilities and equipment. In warehousing we have spent
GBP1.2 million in the period on facilities, racking and IT
systems.
More Warhammer. More Often - licensing business
Our strategy is to exploit the value of our IP beyond our core
tabletop business, leveraging multiple categories and markets
globally. We intend to ensure Warhammer's place as one of the top
fantasy IPs globally. The main areas of focus are:
Media
We have not signed any contracts in the period reported. We have
agreed, in principle, to explore opportunities to exploit our IP
with Amazon Studios. We announced this in December 2022 after the
half year period. We have nothing more to say at this stage. We
will keep you informed. We remain confident we will bring the
worlds of Warhammer to the screen like you have never seen
before.
Video games
During the period our licensing partners launched four new
games; three PC/console and one mobile. We also saw revenue from
established games that continued to perform well, many years after
launch, through a mixture of added content and continued marketing.
A particular launch of note was the highly anticipated
Darktide.
Licensing revenue
Licensing revenue from royalty income decreased in the period by
GBP5.8 million to GBP14.3 million. This was largely due to a high
level of guarantee income on multi-year contracts signed in the
period last year (2022: GBP7.3 million; 2021: GBP14.4 million).
This income is recognised in full at the inception of the contract
in line with IFRS 15 'Revenue from contracts with customers'
following assessment of the performance obligations of the
contract. We recognised one significant guarantee in the income
statement last year of GBP7.5 million. The cash is paid throughout
the lifetime of the licence. Reported income is split as follows:
83% PC and console games, 7% mobile and 10% other.
Risks and uncertainties
The board has overall responsibility for ensuring risk is
appropriately managed across the Group and has carried out a robust
assessment of the principal risks to the business. The top three
strategic risks to the Group are regularly reviewed by the board.
The principal strategic risks identified in 2022/23 are discussed
below. These risks are not intended to be an extensive analysis of
all risks that may arise.
-- IT strategy and delivery - with a number of significant
business projects in play, all of which are dependent on IT
support, there is a requirement for a robust IT strategy which
enables us to deliver key strategic projects as well as supporting
day to day activities. We are keeping the structure of our global
IT team under review to ensure the IT support needs of the business
can be delivered.
-- Media - it is imperative that exploitation of our IP through
media channels does no harm to our core business. Our creative
media director's primary job, with the support of our global IP and
product design director, is to ensure that any representation of
our IP is aligned to our IP guidelines and is approved, correct and
consistent. They are fully supported by our in-house legal team who
will act when needed.
-- Social responsibility - we do not intend to 'greenwash'. We
have operational plans in place for global initiatives including
climate change, diversity and equality. Our senior managers have
documented a realistic plan to ensure we make progress,
forever.
Our biggest risk is senior management becoming complacent. I
will continue to do my best to make sure it does not happen.
We do not consider that we have any material solvency or
liquidity risks.
Outlook
Another rewarding and successful period for the global team with
core sales for the six months of over GBP200 million for the first
time. We will continue to focus on making the best miniatures in
the world, sign new licensing contracts with partners to exploit
our IP outside of our core business and support our staff. I'm so
proud of their considerable hard work and commitment, thank you
all.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources, in
light of the level of cash generation, to continue in operational
existence for at least twelve months from the date of approval of
the condensed consolidated interim financial information. For this
reason, they have adopted the going concern basis in preparing this
condensed consolidated interim financial information.
Statement of directors' responsibilities
The directors confirm that this condensed consolidated interim
financial information has been prepared in accordance with IAS 34,
'Interim Financial Reporting', as adopted by the United Kingdom,
and that the interim management report herein includes a fair
review of the information required by DTR 4.2.7 R and DTR 4.2.8 R,
namely: an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of (i) the principal risks
and uncertainties for the remaining six months of the financial
year; (ii) related party transactions in the first six months and
(iii) any changes in the related party transactions described in
the last annual report.
There have been the following changes to the board since the
annual report for the 52 week period to 29 May 2022:
-- Randal Casson was appointed as non-executive director with effect from 1 July 2022.
-- Elaine O'Donnell stepped down as non-executive chair from 1
January 2023, after she had served as a director for nine
years.
-- John Brewis was appointed as non-executive chair from 1 January 2023.
A list of all current directors is maintained on the investor
relations website at investor.games-workshop.com.
By order of the board
Kevin Rountree
CEO
Rachel Tongue
CFO
10 January 2023
CONSOLIDATED INCOME STATEMENT
Restated
Notes 26 weeks
26 weeks to to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
GBPm GBPm GBPm
------------------------------- -------- -------------- -------------- -------------
Core revenue 212.3 191.5 386.8
Licensing revenue 14.3 20.1 28.0
------------------------------- -------- -------------- -------------- -------------
Revenue 2 226.6 211.6 414.8
Cost of sales (76.0) (60.2) (127.4)
------------------------------- -------- -------------- -------------- -------------
Core gross profit 136.3 131.3 259.4
Licensing gross profit 14.3 20.1 28.0
------------------------------- -------- -------------- -------------- -------------
Gross profit 150.6 151.4 287.4
Operating expenses 2 (67.0) (62.9) (130.3)
------------------------------- -------- -------------- -------------- -------------
Core operating profit 70.7 69.7 131.7
Licensing operating profit 12.9 18.8 25.4
------------------------------- -------- -------------- -------------- -------------
Operating profit 2 83.6 88.5 157.1
Finance income 0.4 0.1 0.2
Finance costs (0.4) (0.4) (0.8)
------------------------------- -------- -------------- -------------- -------------
Profit before taxation 3 83.6 88.2 156.5
Income tax expense 4 (17.1) (17.0) (28.1)
------------------------------- -------- -------------- -------------- -------------
Profit attributable to owners
of the parent 66.5 71.2 128.4
------------------------------- -------- -------------- -------------- -------------
Basic earnings per ordinary
share 5 202.4p 217.2p 391.3p
Diluted earnings per ordinary
share 5 202.3p 216.6p 390.6p
Comparative financial information for revenue and gross profit
has been restated to reclassify licensing revenue, previously
included as royalties receivable, in other operating income.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE
Six months Six months
to to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
GBPm GBPm GBPm
--------------------------------------------- -------------- -------------- -------------
Profit attributable to owners of
the parent 66.5 71.2 128.4
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations 0.6 1.8 0.8
--------------------------------------------- -------------- -------------- -------------
Other comprehensive income for the
period 0.6 1.8 0.8
--------------------------------------------- -------------- -------------- -------------
Total comprehensive income attributable
to owners of the parent 67.1 73.0 129.2
--------------------------------------------- -------------- -------------- -------------
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED BALANCE SHEET
27 November 28 November
Notes 2022 2021 29 May 2022
GBPm GBPm GBPm
---------------------------------- -------- ------------ -------------- ------------
Non-current assets
Goodwill 1.4 1.4 1.4
Other intangible assets 8 26.8 25.7 25.6
Property, plant and equipment 9 55.0 52.9 55.0
Right-of-use assets 10 48.4 46.4 48.1
Deferred tax assets 18.5 10.0 17.8
Other non-current receivables 12 16.4 15.2 19.4
---------------------------------- -------- ------------ -------------- ------------
166.5 151.6 167.3
---------------------------------- -------- ------------ -------------- ------------
Current assets
Inventories 31.8 33.8 38.4
Trade and other receivables 11 52.7 53.5 39.6
Current tax assets 4.3 0.1 4.4
Cash and cash equivalents 85.2 88.6 71.4
---------------------------------- -------- ------------ -------------- ------------
174.0 176.0 153.8
---------------------------------- -------- ------------ -------------- ------------
Total assets 340.5 327.6 321.1
---------------------------------- -------- ------------ -------------- ------------
Current liabilities
Lease liabilities (9.7) (8.1) (9.2)
Trade and other payables (37.0) (42.7) (33.5)
Current tax liabilities (0.1) (0.4) (1.1)
Provisions for other liabilities
and charges (0.9) (0.6) (0.8)
---------------------------------- -------- ------------ -------------- ------------
(47.7) (51.8) (44.6)
---------------------------------- -------- ------------ -------------- ------------
Net current assets 126.3 124.2 109.2
---------------------------------- -------- ------------ -------------- ------------
Non-current liabilities
Lease liabilities (39.8) (39.5) (39.7)
Deferred tax liabilities (0.4) - -
Other non-current liabilities (0.5) (0.6) (0.6)
Provisions for other liabilities
and charges (1.7) (1.8) (1.5)
---------------------------------- -------- ------------ -------------- ------------
(42.4) (41.9) (41.8)
---------------------------------- -------- ------------ -------------- ------------
Net assets 250.4 233.9 234.7
---------------------------------- -------- ------------ -------------- ------------
Capital and reserves
Called up share capital 1.6 1.6 1.6
Share premium account 18.6 16.3 16.3
Other reserves 3.5 3.9 2.9
Retained earnings 226.7 212.1 213.9
---------------------------------- -------- ------------ -------------- ------------
Total equity 250.4 233.9 234.7
---------------------------------- -------- ------------ -------------- ------------
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 29 May 2022 and 30 May 2022 1.6 16.3 2.9 213.9 234.7
Profit for the 26 weeks to 27
November 2022 - - - 66.5 66.5
Exchange differences on translation
of foreign operations - - 0.6 - 0.6
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the period - - 0.6 66.5 67.1
Transactions with owners:
Share-based payments - - - 0.5 0.5
Shares issued under employee
sharesave scheme - 2.3 - - 2.3
Deferred tax charge relating
to share options - - - (0.2) (0.2)
Current tax credit relating
to exercised share options - - - 0.2 0.2
Dividends paid to Company shareholders - - - (54.2) (54.2)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 2.3 - (53.7) (51.3)
---------------------------------------- --------- --------- ---------- ---------- --------
At 27 November 2022 1.6 18.6 3.5 226.7 250.4
---------------------------------------- --------- --------- ---------- ---------- --------
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 30 May 2021 and 31 May 2021 1.6 14.5 2.1 178.1 196.3
Profit for the 26 weeks to 28
November 2021 - - - 71.2 71.2
Exchange differences on translation
of foreign operations - - 1.8 - 1.8
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - 1.8 71.2 73.0
Transactions with owners:
Share-based payments - - - 0.6 0.6
Shares issued under employee
sharesave scheme - 1.8 - - 1.8
Deferred tax charge relating
to share options - - - (0.4) (0.4)
Current tax credit relating
to exercised share options - - - 0.3 0.3
Dividends paid to Company shareholders - - - (37.7) (37.7)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 1.8 - (37.2) (35.4)
---------------------------------------- --------- --------- ---------- ---------- --------
At 28 November 2021 1.6 16.3 3.9 212.1 233.9
---------------------------------------- --------- --------- ---------- ---------- --------
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------- ---------- --------
At 30 May 2021 and 31 May 2021 1.6 14.5 2.1 178.1 196.3
Profit for the 52 weeks to 29
May 2022 - - - 128.4 128.4
Exchange differences on translation
of foreign operations - - 0.8 - 0.8
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - 0.8 128.4 129.2
Transactions with owners:
Share-based payments - - - 1.6 1.6
Shares issued under employee
sharesave scheme - 1.8 - - 1.8
Deferred tax charge relating
to share options - - - (1.4) (1.4)
Current tax credit relating
to exercised share options - - - 0.7 0.7
Dividends paid to Company shareholders - - - (93.5) (93.5)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 1.8 - (92.6) (90.8)
---------------------------------------- --------- --------- ---------- ---------- --------
At 29 May 2022 1.6 16.3 2.9 213.9 234.7
---------------------------------------- --------- --------- ---------- ---------- --------
The following notes form an integral part of this condensed
consolidated interim financial information.
CONSOLIDATED CASH FLOW STATEMENT
26 weeks 26 weeks
Notes to to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
GBPm GBPm GBPm
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from operating activities
Cash generated from operations 7 104.7 76.5 159.2
UK corporation tax paid (14.6) (15.3) (34.0)
Overseas tax paid (3.7) (0.5) (3.7)
---------------------------------------- -------- ------------- -------------- -------------
Net cash generated from operating
activities 86.4 60.7 121.5
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from investing activities
Purchases of property, plant
and equipment (7.4) (8.8) (17.0)
Purchases of other intangible
assets (0.4) (1.3) (1.4)
Expenditure on product development (7.0) (5.4) (13.9)
Interest received 0.4 0.1 0.2
---------------------------------------- -------- ------------- -------------- -------------
Net cash used in investing activities (14.4) (15.4) (32.1)
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from financing activities
Proceeds from issue of ordinary
share capital 2.3 1.8 1.8
Repayment of principal under
leases (5.8) (5.3) (11.1)
Lease interest paid (0.4) (0.4) (0.8)
Dividends paid to Company shareholders (54.2) (37.7) (93.5)
---------------------------------------- -------- ------------- -------------- -------------
Net cash used in financing activities (58.1) (41.6) (103.6)
---------------------------------------- -------- ------------- -------------- -------------
Net increase/(decrease) in cash
and cash equivalents 13.9 3.7 (14.2)
Opening cash and cash equivalents 71.4 85.2 85.2
Effects of foreign exchange rates
on cash and cash equivalents (0.1) (0.3) 0.4
---------------------------------------- -------- ------------- -------------- -------------
Closing cash and cash equivalents 85.2 88.6 71.4
---------------------------------------- -------- ------------- -------------- -------------
The following notes form an integral part of this condensed
consolidated interim financial information.
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The Company is a limited liability company, incorporated and
domiciled in the United Kingdom. The address of its registered
office is Willow Road, Lenton, Nottingham, NG7 2WS.
The Company has its listing on the London Stock Exchange.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the 52 week
period ended 29 May 2022 were approved by the board of directors on
25 July 2022 and have been delivered to the Registrar of Companies.
The report of the auditor on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any
statement under either section 498 (2) or section 498 (3) of the
Companies Act 2006.
This condensed consolidated interim financial information has
not been audited or reviewed pursuant to the Auditing Practices
Board guidance on 'Review of Interim Financial Information' and
does not include all of the information required for full annual
financial statements.
This condensed consolidated interim financial information for
the 26 week period ended 27 November 2022 has been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and with IAS 34, 'Interim Financial
Reporting' as adopted by the United Kingdom. The condensed
consolidated interim financial information should be read in
conjunction with the annual financial statements for the 52 week
period ended 29 May 2022 which have been prepared in accordance
with IFRSs as adopted by the United Kingdom.
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they have adopted the going concern basis in preparing
this condensed consolidated interim financial information.
This condensed consolidated interim financial information was
approved for issue on 10 January 2023.
This condensed consolidated interim financial information is
available to shareholders and members of the public on the
Company's website at investor.games-workshop.com.
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, revenues and expenses. Actual
results may differ from these estimates.
In preparing this condensed consolidated interim financial
information, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the 52 week period ended 29
May 2022.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The accounting policies applied are consistent with those of the
annual financial statements for the 52 week period ended 29 May
2022, as described in those financial statements.
The Group considers that there are no new accounting standards,
amendments or interpretations issued by the IASB, but not yet
applicable, which have had, or are expected to have a significant
effect on the financial statements.
2. Segment information
As Games Workshop is a vertically integrated business,
management assesses the performance of sales channels and
manufacturing and distribution channels separately. Segment
information for the period ending 28 November 2021 has been
restated to better reflect the structure of the Group. Segments
have been split into core and licensing as described below. Costs
previously reported within 'Design to manufacture', 'Merchandising
and logistics', and 'Operations and support' have been combined to
create the 'Design, manufacture, logistics and operations' segment.
Share-based payment charges and profit share scheme charges were
previously included outside of segmental operating expenses, these
have now all been included in core operating expenses.
At 27 November 2022 Games Workshop has two segments, core and
licensing, as described below:
- Core: the core segment includes all revenue and expenditure
relating to the design, manufacture and sales of our fantasy
miniatures and related products.
- Licensing: the licensing segment includes all revenue and
expenditure relating to licences granted to external partners.
We provide further information on revenue and expenses within
the core segment below. The core segment has been divided into
channels as follows:
- Trade: this sales channel sells globally to independent
retailers, agents and distributors. It also includes the Group's
magazine newsstand business and the distributor sales from the
Group's publishing business (Black Library).
- Retail: this includes sales through the Group's retail stores,
the Group's visitor centre in Nottingham and global events.
- Online: this includes sales through the Group's global web
stores, our online subscription service (Warhammer+) and digital
sales through external affiliates.
- Design, manufacturing, logistics and operations, which
includes costs for:
- the design studios (which create all of the IP and the
associated miniatures, artwork, games and publications);
- the production facilities;
- the warehouses and logistics costs;
- charges for inventory provisions. This includes adjustments
for the profit in stock arising from inter-segment sales; and
- support services (marketing, IT, accounting, payroll,
personnel, procurement, legal, health and safety, customer services
and credit control) provided to activities across the Group;
- Group: this includes the Company's overheads.
The chief operating decision-maker assesses the performance of
each segment based on operating profit, excluding share option
charges recognised under IFRS 2, 'Share-based payment' and charges
in respect of the Group's profit share schemes. This has been
reconciled to the Group's total profit before taxation below.
The segment information reported to the executive directors for
the periods included in this financial information is as
follows:
26 weeks to 27 November 2022 and 28 November 2021:
Core Licensing Total
---------------------------------- ------------------ ------------------ ------------------
Restated Restated Restated
2022 2021 2022 2021 2022 2021
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------- --------- ------- --------- ------- ---------
Trade 120.9 108.1 - - 120.9 108.1
Retail 48.7 41.9 - - 48.7 41.9
Online 42.7 41.5 - - 42.7 41.5
Licensing - - 14.3 20.1 14.3 20.1
---------------------------------- ------- --------- ------- --------- ------- ---------
Revenue 212.3 191.5 14.3 20.1 226.6 211.6
Cost of sales (76.0) (60.2) - - (76.0) (60.2)
---------------------------------- ------- --------- ------- --------- ------- ---------
Gross profit 136.3 131.3 14.3 20.1 150.6 151.4
Trade (5.6) (4.9) - - (5.6) (4.9)
Retail (30.1) (25.7) - - (30.1) (25.7)
Online (5.0) (4.6) - - (5.0) (4.6)
Design, manufacturing, logistics
and operations (18.0) (17.4) - - (17.7) (17.4)
Licensing - - (1.4) (1.3) (1.4) (1.3)
Group (1.9) (1.5) - - (2.2) (1.5)
Share-based payment charge (0.5) (0.6) - - (0.5) (0.6)
Profit share scheme charge (4.5) (6.9) - - (4.5) (6.9)
---------------------------------- ------- --------- ------- --------- ------- ---------
Operating expenses (65.6) (61.6) (1.4) (1.3) (67.0) (62.9)
Operating profit 70.7 69.7 12.9 18.8 83.6 88.5
---------------------------------- ------- --------- ------- --------- ------- ---------
Finance income 0.4 0.1 - - 0.4 0.1
Finance costs (0.4) (0.4) - - (0.4) (0.4)
---------------------------------- ------- --------- ------- --------- ------- ---------
Profit before tax 70.7 69.4 12.9 18.8 83.6 88.2
---------------------------------- ------- --------- ------- --------- ------- ---------
2. Segment information continued
52 weeks to 29 May 2022:
Core Licensing Total
---------------------------------- -------- ---------- --------
2022 2022 2022
GBPm GBPm GBPm
---------------------------------- -------- ---------- --------
Trade 214.3 - 214.3
Retail 87.2 - 87.2
Online 85.3 - 85.3
Licensing - 28.0 28.0
---------------------------------- -------- ---------- --------
Revenue 386.8 28.0 414.8
Cost of sales (127.4) - (127.4)
---------------------------------- -------- ---------- --------
Gross profit 259.4 28.0 287.4
Trade (10.7) - (10.7)
Retail (52.4) - (52.4)
Online (11.7) - (11.7)
Design, manufacturing, logistics
and operations (37.6) - (37.6)
Licensing - (2.6) (2.6)
Group (3.8) - (3.8)
Share-based payment charge (1.6) - (1.6)
Profit share scheme charge (9.9) - (9.9)
---------------------------------- -------- ---------- --------
Operating expenses (127.7) (2.6) (130.3)
Operating profit 131.7 25.4 157.1
---------------------------------- -------- ---------- --------
Finance income 0.2 - 0.2
Finance costs (0.8) - (0.8)
---------------------------------- -------- ---------- --------
Profit before tax 131.1 25.4 156.5
---------------------------------- -------- ---------- --------
For information, we analyse core external revenue further
below:
26 weeks 26 weeks 52 weeks
to to to
27 November 28 November 29 May
2022 2021 2022
GBPm GBPm GBPm
----------------------------- ------------- ------------- ---------
Trade
UK and Continental Europe 50.9 44.8 90.4
North America 55.6 47.8 96.5
Australia and New Zealand 7.5 5.7 11.4
Asia 4.5 5.1 8.5
Rest of world 1.5 3.7 5.9
Black Library 0.9 1.0 1.6
Total Trade 120.9 108.1 214.3
----------------------------- ------------- ------------- ---------
Retail
UK 14.4 11.8 25.7
Continental Europe 9.7 9.5 18.5
North America 18.9 16.2 33.6
Australia and New Zealand 4.7 3.2 7.3
Asia 1.0 1.2 2.1
Total Retail 48.7 41.9 87.2
----------------------------- ------------- ------------- ---------
Online
UK 7.0 9.3 19.0
Continental Europe 7.2 8.6 16.3
North America 17.1 14.4 31.4
Australia and New Zealand 2.3 2.5 4.4
Asia 0.2 0.2 0.4
Rest of world 0.5 0.7 1.4
Digital and apps 8.4 5.8 12.4
Total Online 42.7 41.5 85.3
----------------------------- ------------- ------------- ---------
Total core external revenue 212.3 191.5 386.8
----------------------------- ------------- ------------- ---------
3. Profit before taxation
26 weeks
to 26 weeks to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
GBPm GBPm GBPm
--------------------------------------- -------------- -------------- --------------
Profit before taxation is stated
after charging:
Depreciation:
- Owned property, plant and equipment 6.8 5.7 11.7
- Right-of-use assets
Amortisation: 5.9 5.5 11.2
- Amortisation of capitalised
development costs 5.4 3.5 10.1
- Amortisation of other intangibles 0.8 0.7 1.6
Impairment of computer software - - 1.1
Impairment of development costs - - 0.2
Redundancy costs and compensation
for loss of office 0.4 0.3 0.6
Inventory provision creation 4.2 3.2 10.6
--------------------------------------- -------------- -------------- --------------
4. Tax
The taxation charge for the six months to 27 November 2022 is
based on an estimate of the full 52 week period effective rate of
20.5% (2021:19.3%). The increase reflects the UK corporation rate
increase on taxable profits after 1 April 2022 from 19% to 25%.
While we continue to expect a rate above that for a business with
activities based solely in the UK due to higher overseas tax rates,
the rate is lowered as a result of the increase in overseas profit
in inventory provisions together with the impact of super
deductions.
5. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the parent by the weighted average number
of ordinary shares in issue throughout the relevant period.
26 weeks 26 weeks
to to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
GBPm GBPm GBPm
----------------------------------- ------------- ------------- ---------------
Profit attributable to owners of
the parent (GBPm) 66.5 71.2 128.4
---------------------------------------- ------------- ----------------- -----------
Weighted average number of ordinary
shares in issue (thousands) 32,849 32,786 32,813
---------------------------------------- ------------- ----------------- -----------
Basic earnings per share (pence
per share) 202.4 217.2 391.3
---------------------------------------- ------------- ----------------- -----------
Diluted earnings per share
The calculation of diluted earnings per share has been based on
the profit attributable to owners of the parent and the weighted
average number of shares in issue throughout the relevant period,
adjusted for the dilution effect of share options outstanding at
the period end.
26 weeks 26 weeks
to to 52 weeks
27 November 28 November to
2022 2021 29 May 2022
---------------------------------------- ------------- ------------- -------------
Profit attributable to owners of
the parent (GBPm) 66.5 71.2 128.4
--------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary
shares in issue (thousands) 32,849 32,786 32,813
Adjustment for share options (thousands) 15 79 60
--------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary
shares for diluted earnings per
share (thousands) 32,864 32,865 32,873
--------------------------------------------- ------------- ------------- -------------
Diluted earnings per share (pence
per share) 202.3 216.6 390.6
--------------------------------------------- ------------- ------------- -------------
6. Dividends
Dividends of GBP14.8 million (45 pence per share), GBP9.8
million (30 pence per share) and GBP29.6m (90 pence per share) were
declared and paid in the six months to 27 November 2022.
A dividend of GBP16.4 million (50 pence per share), declared in
the 52 weeks ended 30 May 2021, was paid in the six months to 28
November 2021. Dividends of GBP13.1 million (40 pence per share)
and GBP8.2 million (25 pence per share) were also declared and paid
in the six months to 28 November 2021. A further dividend of
GBP11.5 million (35 pence per share) was declared on 18 November
2021 and was paid on 5 January 2022.
7. Reconciliation of profit to net cash from operating activities
26 weeks
to 52 weeks
26 weeks to 28 November to
27 November 2022 2021 29 May 2022
GBPm GBPm GBPm
---------------------- ------------------------------ ------------- ---------------
Profit before taxation 83.6 88.2 156.5
Finance income (0.4) (0.1) (0.2)
Finance costs 0.4 0.4 0.8
---------------------------- ------------------------------ ------------- -------------
Operating profit 83.6 88.5 157.1
Depreciation of property, plant
and equipment 6.8 5.7 11.7
Depreciation of right-of-use assets 5.9 5.5 11.2
Impairment of intangible assets - - 1.3
Loss on disposal of property, plant
and equipment 0.2 0.1 0.1
Loss on disposal of intangible
assets - 0.3 0.3
Amortisation of capitalised development
costs 5.4 3.5 10.1
Amortisation of other intangibles 0.8 0.7 1.6
Share-based payments 0.5 0.6 1.6
Changes in working capital:
-Decrease/(increase) in inventories 7.8 (6.6) (12.2)
-Increase in trade and other receivables (10.2) (32.0) (21.5)
-Increase/(decrease) in trade and
other payables 3.5 10.0 (2.1)
-Increase in provisions 0.4 0.2 -
----------------------------------------------- ----------- ------------- -------------
Net cash from operating activities 104.7 76.5 159.2
----------------------------------------------- ----------- ------------- -------------
8. Other intangible assets
27 November 28 November 29 May 2022
2022 2021 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ ------------
Net book value at beginning of
period 25.6 23.7 23.7
Additions 7.4 6.5 15.3
Disposals - (0.3) (0.3)
Amortisation charge (6.2) (4.2) (11.7)
Impairment - - (1.3)
Exchange differences - - 0.1
Reclassification - - (0.2)
Net book value at end of period 26.8 25.7 25.6
--------------------------------- ------------ ------------ ------------
9. Property, plant and equipment
27 November 28 November 29 May 2022
2022 2021 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ ------------
Net book value at beginning of
period 55.0 49.8 49.8
Additions 6.8 8.6 16.3
Disposals (0.2) (0.1) (0.1)
Depreciation charge (6.8) (5.7) (11.7)
Exchange differences 0.2 0.3 0.5
Reclassification - - 0.2
Net book value at end of period 55.0 52.9 55.0
--------------------------------- ------------ ------------ ------------
10. Right-of-use assets
27 November 28 November 29 May 2022
2022 2021 GBPm
GBPm GBPm
--------------------------------- -------------- -------------- --------------
Net book value at beginning of
period 48.1 46.0 46.0
Additions 5.7 5.2 11.9
Disposals (0.1) - -
Depreciation charge (5.9) (5.5) (11.2)
Exchange differences 0.6 0.7 1.4
Net book value at end of period 48.4 46.4 48.1
--------------------------------- -------------- -------------- --------------
11. Trade and other receivables
27 November 28 November 29 May 2022
2022 2021 GBPm
GBPm GBPm
----------------------------------- ------------ ------------ ------------
Trade receivables 11.8 11.4 8.6
Prepayments and accrued income 14.7 14.1 11.7
Licensing and other receivables 26.2 28.0 19.3
----------------------------------- ------------ ------------ ------------
Total trade and other receivables 52.7 53.5 39.6
----------------------------------- ------------ ------------ ------------
Included within prepayments and accrued income are contract
assets relating to uninvoiced royalty income amounting to GBP2.2
million (2021: GBP1.3 million).
Included within licensing and other receivables is invoiced
royalty income of GBP10.3 million (2021: GBP12.4 million). Also
included in other receivables is a VAT receivable of GBP11.6
million (2021: GBP15.5 million) in respect of outstanding European
VAT receipts following Brexit.
12. Other non-current receivables
27 November 28 November 29 May 2022
2022 2021 GBPm
GBPm GBPm
------------------------------------- ------------ ------------ ------------
Licensing and other receivables 16.4 15.2 19.4
------------------------------------- ------------ ------------ ------------
Total other non-current receivables 16.4 15.2 19.4
------------------------------------- ------------ ------------ ------------
Included within licensing and other receivables is invoiced
royalty income of GBP14.9 million (2021: GBP13.7 million), being in
respect of guarantee instalments due in over one year.
13. Seasonality
The Group's monthly sales profile demonstrates an element of
seasonality around the Christmas period with increased sales in the
month of December.
14. Commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is GBP3.7 million (2021: GBP5.8 million).
15. Related party transactions
There were no related-party transactions during the period.
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END
IR BCGDBDUGDGXC
(END) Dow Jones Newswires
January 10, 2023 02:00 ET (07:00 GMT)
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