TIDMGAW
RNS Number : 0164Z
Games Workshop Group PLC
09 January 2024
GAMES WORKSHOP GROUP PLC
9 January 2024
HALF-YEARLY REPORT
Games Workshop Group PLC ('Games Workshop' or the 'Group')
announces its half-yearly results for the 26 week period to 26
November 2023.
Highlights:
26 weeks to 26 weeks to
26 November 2023 27 November 2022
-------------------------------------- ----------------- -----------------
Core revenue GBP235.6m GBP212.3m
Licensing revenue GBP12.1m GBP14.3m
Revenue GBP247.7m GBP226.6m
Revenue at constant currency GBP254.9m GBP226.6m
Core operating profit GBP83.4m GBP70.7m
Core operating profit at constant GBP87.8m GBP70.7m
currency
Licensing operating profit GBP11.1m GBP12.9m
Licensing operating profit at GBP11.5m GBP12.9m
constant currency
Operating profit GBP94.5m GBP83.6m
Profit before taxation GBP95.2m GBP83.6m
Net increase in cash - pre-dividends GBP85.3m GBP68.1m
paid
Earnings per share 216.9p 202.4p
Dividends per share declared and
paid in the period 195p 165p
Kevin Rountree, CEO of Games Workshop, said:
"Games Workshop and the Warhammer hobby are in great shape. We
continue to perform well during challenging economic times,
delivering record group revenue, profit and dividends in the
period. Morale is good at Games Workshop and our hobbyists are
having fun too."
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.warhammer.com
See the glossary on page 20 for details on the alternative
performance measures (APMs) used by the Group. Where appropriate, a
reconciliation between an APM and its closest statutory equivalent
is provided.
This announcement contains inside information for the purposes
of the Market Abuse Regulation (EU) no. 596/2014 (including as it
forms part of the laws of England and Wales by virtue of the
European Union (Withdrawal) Act 2018) ('MAR'). Upon the publication
of this announcement, such information will no longer constitute
inside information. Ross Matthews, the Company's General Counsel
and Company Secretary, is the person responsible for making the
notification for the purposes of Article 17 of MAR.
FIRST HALF HIGHLIGHTS
26 weeks to 26 November 2023 and 27 November 2022:
Revenue and operating profit at actual rates
Core Licensing Total
-------------------- ---------------- --------------------- ----------------
2023 2022 2023 2022 2023 2022
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ------- ---------- --------- ------- -------
Trade 136.1 120.9 - - 136.1 120.9
Retail 54.7 48.7 - - 54.7 48.7
Online 44.8 42.7 - - 44.8 42.7
Licensing - - 12.1 14.3 12.1 14.3
-------------------- ------- ------- ---------- --------- ------- -------
Revenue 235.6 212.3 12.1 14.3 247.7 226.6
Cost of sales (72.1) (76.0) - - (72.1) (76.0)
-------------------- ------- ------- ---------- --------- ------- -------
Gross profit 163.5 136.3 12.1 14.3 175.6 150.6
-------------------- ------- ------- ---------- --------- ------- -------
Operating expenses (80.1) (65.6) (1.0) (1.4) 81.1 (67.0)
-------------------- ------- ------- ---------- --------- ------- -------
Operating profit 83.4 70.7 11.1 12.9 94.5 83.6
-------------------- ------- ------- ---------- --------- ------- -------
Revenue and operating profit at constant currency
Core Licensing Total
-------------------- ---------------- --------------------- ----------------
2023 2022 2023 2022 2023 2022
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ------- ---------- --------- ------- -------
Trade 140.3 120.9 - - 140.3 120.9
Retail 56.5 48.7 - - 56.5 48.7
Online 45.6 42.7 - - 45.6 42.7
Licensing - - 12.5 14.3 12.5 14.3
-------------------- ------- ------- ---------- --------- ------- -------
Revenue 242.4 212.3 12.5 14.3 254.9 226.6
Cost of sales (73.0) (76.0) - - (73.0) (76.0)
-------------------- ------- ------- ---------- --------- ------- -------
Gross profit 169.4 136.3 12.5 14.3 181.9 150.6
-------------------- ------- ------- ---------- --------- ------- -------
Operating expenses (81.6) (65.6) (1.0) (1.4) (82.6) (67.0)
-------------------- ------- ------- ---------- --------- ------- -------
Operating profit 87.8 70.7 11.5 12.9 99.3 83.6
-------------------- ------- ------- ---------- --------- ------- -------
Foreign exchange rates
Our currency exposures are the euro and US dollar:
euro US dollar
2023 2022 2023 2022
Rate used for the balance
sheet at the period end 1.15 1.16 1.26 1.21
Average rate used for earnings 1.16 1.17 1.25 1.18
INTERIM MANAGEMENT REPORT
Games Workshop and the Warhammer hobby are in great shape.
Strategy
We have remained focused on delivering our strategic goal - 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.
This relentless focus from all in our vertically integrated
business, continues to deliver record results. We continue to work
tirelessly as a team to ensure we deliver our operational plans,
surprising and delighting our fans.
It's worth noting that we have increased our cash buffer in the
period to GBP75 million in line with the current three month cash
cost of running Games Workshop - on a rainy day we'd prefer to be
able to look after ourselves. Our job is to run the business under
all scenarios.
Licensing - we own what we believe is some of the best under
exploited intellectual property ('IP') globally. In the period
reported, we have continued to patiently seek partners that can
help us fulfil this potential. We will continue to grant licences
to carefully chosen partners that respect the need for us to have
complete ownership of our unique IP, to ensure no harm is done to
the core business: a key risk we highlight every year. We will
ensure we do everything we can to make the day to day IP approval
process seamless. This process now rests within our Warhammer
Studio; with the experts who understand our ambitions and have the
IP knowledge.
Update
A solid six month period, successfully delivering the plans we
set ourselves at the start of the year; with core revenue growth in
all channels and in all major countries. We have improved our core
gross margin and managed our operating expenses well, only allowing
essential investments. These record results are driven by the
launch of a significant number of new products across all of our
IPs and the ongoing performance of products we launched in previous
periods. We have delivered sales growth at constant currency rates,
every month in line with our ambitious plan. Our June 2023 sales
performance set a new benchmark for sales in one month driven by
sales of our new Warhammer 40,000 core set.
We have made significant progress on our other strategic
priorities including, as promised, a reduction in our carbon
footprint; we are ahead of the milestones presented in the 2023
annual report. It's worth noting that we don't need to incentivise
our great staff at Games Workshop with bonuses to do this - they
believe it's the right thing to do. It's on all job specs as part
of the day job, including my own.
Our staff and their team efforts are critical to our ongoing
success. We thank them all for their ongoing support and their
focus on delivering their department's goals. We also thank some of
them for their resilience - our ongoing IT integration projects can
at times test anyone's patience. Removing 20 year old legacy
systems, launching a new online store and maintaining service
levels as we deliver the highest volumes ever at our East Midlands
Gateway ('EMG') warehouse, was never going to be easy. I am very
proud of the team's efforts to date. We thank our impacted
customers (less than 5%) for their significant patience too.
We've not had many people retire from Games Workshop. During the
period, John Blanche stepped down from his job as art director in
our design studio. He is a creative genius, and we thank him for
sharing his enormous talents and enthusiasm with us for nearly 40
years. We all wish him well. He leaves us with a well invested and
talented Warhammer Studio.
Also, after 27 years with the Group and nine years on the board,
Rachel Tongue has informed the board that she does not propose to
offer herself for re-election as chief financial officer at the
next AGM in September 2024. Rachel will continue in her role,
working as an integral part of my team to ensure a smooth transfer
of responsibilities to her successor. Rachel is amazing and she
will be missed enormously.
We thank Rachel for championing our business model and our
culture, her incredible hard work and dedication and her endless
commitment to ensuring we continue to improve every year. She has
played a huge part in helping to deliver our ongoing success, we
all wish her well for the future.
Rachel will step down from the board at the 2024 AGM and will
leave the Group in January 2025. We will be commencing a search for
her successor immediately.
Performance
Sales for the month of December are in line with our
expectations.
At actual exchange rates:
-- Core revenue growth - revenue growth (+11.0%) continues
across Retail (+12.3%) and Trade (+12.6%) and Online (+4.9%).
-- Core gross margin has increased from 64.2% to 69.4%, mainly
due to a reduction of inventory provision charges and a reduction
in carriage costs.
%
Gross margin at November 2022 64.2
Inventory provision +2.2
Logistics +2.1
Materials +0.5
Design +0.3
Production and other -0.1
Gross margin before animation 69.2
Animation +0.2
------------------------------- -----
Gross margin at November
2023 69.4
------------------------------- -----
-- Core operating expenses - up GBP14.5 million to GBP80.1 million.
GBPm
Core operating expenses at
November 2022 65.6
Staff costs +4.3
Group Profit Share Scheme +3.0
Major project expenditure +3.8
IT and software support expenses +0.8
Other +2.6
---------------------------------- -----
Core operating expenses at
November 2023 80.1
---------------------------------- -----
-- Core operating profit - up GBP12.7 million to GBP83.4 million
and profit to sales ratio is up 2.1% to 35.4%.
-- Major projects - to date GBP4.3 million of operating expenses
(2022/23: GBP4.5 million; GBP4.0 million of capital investment and
GBP0.5 million of operating expenses) spent on projects in the
first half, including investment in the new webstore.
-- Returns to shareholders - we have declared GBP64.2 million in
dividends during the period (2022/23: GBP54.2 million).
-- Foreign exchange differences - 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 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.
-- Cash generated from operations - GBP116.9 million (2022/23:
GBP104.7 million). Included within this are working capital
movements relating to an increase in inventory purchases of GBP4.4
million (higher volumes) and an increase in trade and other
receivables of GBP7.4 million (correlated to higher trade sales and
digital income). There was also an increase in advance payments by
trade and online customers of GBP6.7 million. The advance payments
relate to made to order products and a recent change in the
preorder window for new release products. These orders will have
been taken and paid for but not yet despatched and so not yet
recognised as revenue.
GBPm
Cash and cash equivalents
at May 2023 90.2
Cash generated from operations +116.9
Share issue and interest income +3.6
Lease payments -6.3
Product development -7.0
Purchase of capital assets -6.6
Tax paid -15.3
Dividends paid -64.2
--------------------------------- -------
Cash and cash equivalents
at November 2023 111.3
--------------------------------- -------
We are not planning any share buybacks or acquisitions.
Review of the period
Revenue
Core revenue
Reported core revenue grew by 11.0% to GBP235.6 million for the
period. On a constant currency basis, sales were up by 14.2% to
GBP242.4 million; split by channel this comprised: Trade GBP140.3
million (2022/23: GBP120.9 million), Retail GBP56.5 million
(2022/23: GBP48.7 million) and Online GBP45.6 million (2022/23:
GBP42.7 million).
Trade
Trade grew by 12.6% at actual rates, 16.0% at constant currency
rates. 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, Barcelona, Sydney, Tokyo,
Shanghai, Singapore, Hong Kong, and Kuala Lumpur. In the period,
our net number of trade outlets globally increased by c.500
accounts to c.7,000 (not including 2,000+ major chain outlets
stocking some key recruitment products).
Organic sales growth, particularly geographical spread in our
smaller export countries, is an area of focus in the period ahead.
The Warhammer hobby continues to spread globally.
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.
Retail
Retail grew by 12.3% at actual rates, 16.0% at constant currency
rates. Our stores have performed well during the period, with 81%
of our stores delivering like for like growth in the reported
period. 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 is also at
record sales levels: our new structure, which includes four new
territory managers, has been implemented well. Retail thrives when
we all help our store managers deliver a consistent performance,
these results highlight how well the teams are working together.
Globally we opened, including relocations, 14 stores (our plan is
c.30 new stores for the full year). After closing five stores, our
net total number of stores at the end of the period is 535.
Online
Online grew by 4.9% at actual rates, 6.8% at constant currency
rates. In October we launched our new online store, there were some
teething issues but no showstoppers, once again a great team effort
from the staff involved. We have spent GBP10.8 million on this new
online solution; we don't expect any significant additional
investment in the years ahead.
We remain focused on joined-up customer experiences across all
core sales channels.
Licensing revenue
Licensing revenue from royalty income decreased in the period by
GBP2.2 million to GBP12.1 million (at constant currency, a decrease
of GBP1.8 million to GBP12.5 million). This was partly due to a
reduction of GBP1.1 million in guarantee income on multi-year
contracts signed in the period. Guarantee income in the period was
GBP6.2 million (2022/23: GBP7.3 million). This income was
recognised in full at the inception of the contracts following
assessment of the performance obligations of the contracts.
Reported income is split as follows: 47% PC and console games, 33%
mobile and 20% other.
Total revenue
Total revenue has increased by 9.3% to GBP247.7 million at
actual rates, at constant currency total revenue increased by
12.4%.
Design
We design, make, and sell miniatures and related products under
a number of brands and sub-brands. We have originated and are in
control of a number of strong, globally recognised brands with
their own identities, associations and logos.
Our key consumer facing brand is 'Warhammer' - this unites all
aspects of the Warhammer hobby - collecting, building, painting,
playing, reading, watching, gaming etc. in the worlds of
Warhammer.
We have two main universes/settings - our dark, gritty fantasy
sci-fi universe, which encompasses 'Warhammer 40,000', 'Warhammer
The Horus Heresy' and 'Necromunda', and our unique fantasy setting
that includes 'Warhammer Age of Sigmar', 'Blood Bowl' (albeit a
tongue in cheek parody) and, the soon to be released, 'Warhammer
The Old World'.
IP and design studio payroll costs increased by GBP1.0 million
to GBP8.5 million in the period; as a percentage of core revenue
they have increased by 0.1% to 3.6%. The total number of jobs in
our Warhammer Studio is 310.
Manufacturing
We continue to manufacture all of our core products at our three
factories in Nottingham. Work on improving efficiencies has negated
the need for the purchase of any additional manufacturing equipment
during the period and allowed numerous manufacturing output records
to be broken. As part of our longer term capacity planning, we are
exploring options for Factory 4 on the site next to Factory 2.
Our total manufacturing headcount has increased slightly during
the period with the total number of jobs in our factories now
standing at 361. An increase in temporary staff cost and the annual
pay rise has increased manufacturing payroll costs by GBP0.7
million to GBP6.0 million; 2.5% of core revenue in both
periods.
Warehousing
UK
Project work on our new warehouse management solution at our EMG
location has been completed with the site now processing all UK and
European customer orders (across all sales channels) as well as
international freight to our global hubs. As highlighted earlier
there are still some systems integration problems to resolve as
part of replacing our core, 20 years old, legacy systems that the
new warehouse management system interfaces to. This project
internally is called SIP (Systems Improvement Programme). We don't
expect to be fully optimised until this programme of work is
delivered nor do we expect this to impact sales significantly; it
may cause service levels to fall short at times for some customers.
We will do everything we can to minimise this impact.
The original Eurohub warehouse at our HQ in Nottingham has now
been reconfigured to serve as our dedicated component warehouse
supplying our three factories. It's working well, to agreed KPIs
and milestones.
North America
Additional robotics have been purchased (increasing from 45 to
70 robots) to further increase pick capacity. IT systems here are
less complex than those at EMG (although both warehouses are using
the same technology and robotics solutions), and they are meeting
agreed KPIs and milestones.
Australia
In October we signed an eight year lease for a new facility in
Australia, not far from our current site, which after over 20 years
was no longer big enough. The new site is planned to be operational
in April 2025.
Europe
We continue to review options for improving service levels to
Continental Europe.
Total warehousing costs have increased by GBP0.9 million to
GBP12.9 million at actual rates; as a percentage of core revenue
they have decreased from 5.7% to 5.5%.
Service centres
IT - The team is starting to make some progress. The launch of
our new web store was a key morale boosting milestone for them, and
me too. The goal remains the same: our IT systems and
infrastructure adapt and scale with the business as we grow. We
will continue to invest in the team in the period ahead. In early
2024 I hope to sign off, with full board support, the SIP project
highlighting the IT investment plan for the next two/three years.
More on that in the 2024 annual report.
Customer service - We aim to resolve all queries within 24
hours, however, due to the exceptional volume of queries associated
with the launches of our new webstore and warehouse management
system, we have not achieved the high levels we set ourselves. The
current average is three days.
Total support services operating expenses, excluding marketing
costs, have increased by GBP2.5 million to GBP15.9 million at
actual rates; as a percentage of core revenue they have increased
from 6.3% to 6.7% in line with our operational plan.
Customer focused
Our stores
The staff in our retail stores work cheerfully and relentlessly
to offer great customer service and recruit ever more customers
into the Warhammer hobby. Our stores continue to be the best place
to start your hobby journey with us.
My Warhammer
Registrations for this single login continue to grow at pace and
we have 576,000 active users at the period end (2022/23: 346,000)
up 66% on prior year. Active users are defined as someone who has
engaged with us online in 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.
Warhammer Community
Our news and blog site continues to go from strength to
strength. We have seen good growth in the number of hobbyists
enjoying our articles and news stories. Warhammer Community is the
hub for our marketing activities and plays a vital role in
delivering hobby news and information every day of the year.
Email
Our email campaigns continue to be one of our most effective
methods of communication. Subscriber numbers, (defined as the
number of people who opened one of our emails in the last six
months) were 570,000 (2022/23: 476,000) at the period end. We
continue to look for more ways to surprise and delight our loyal
fans and bring new customers into the Warhammer hobby.
Warhammer+
Launched in August 2021, it continues to delight and entertain a
growing subscriber base. Our subscriber numbers are
169,000 at the period end (2022/23: 115,000).
External events/social media
Warhammer events and gaming conventions engaged with customers
and recruited new ones across North America and Europe. 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. Social media has an important role in
making customers aware of the breadth of the Warhammer hobby, as
well as the products we sell.
Total marketing operating expenses have increased by GBP1.7
million to GBP4.2 million; as a percentage of core sales they have
increased from 1.2% to 1.8% in line with our operational plan.
Capital investment
In manufacturing, we have invested GBP3.8 million in tooling and
GBP0.6 million in facilities and equipment. We have invested GBP0.6
million on shop fits in new and existing stores and GBP0.4 million
on the Lenton site as well as GBP0.8 million in warehouse
facilities, racking, IT systems and computer equipment.
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
As we announced on 18 December 2023, we have signed a contract
with Amazon Content Services LLC for the prospective development by
Amazon of Warhammer 40,000 universe into films and television
series. We remain confident we will bring the worlds of Warhammer
to the screen like you have never seen before.
Games Workshop and Amazon will work together for a period of 12
months to agree creative guidelines for the films and television
series to be developed by Amazon. The agreement will only proceed
once the creative guidelines are mutually agreed between Games
Workshop and Amazon.
Video games
During the period, our licensing partners launched two new video
games; Warhammer Age of Sigmar: Realms of Ruin , a real time
strategy PC/console game and Warhammer 40,000: Warpforge , a
collectible card PC/mobile game. We also saw revenue from
established games Darktide, Tacticus and Total War: Warhammer 3
that continued to perform well, often years after launch, through a
mixture of added content and continued marketing. Licensing income
during the period is down; it is, as usual, driven by the success
of game launches and the levels of guarantees booked in the
period.
Risks and uncertainties
The board has overall responsibility for ensuring risk is
appropriately managed across the Group. Our operational risks,
including emerging risks, are identified, and monitored through
discussions at regular risks meetings of the senior management
team. These meetings are coordinated by the internal audit function
and assess the impact of each operational risk as well as
identifying new emerging risks and mitigating actions required.
The key strategic risks to the Group are regularly reviewed by
the board. The principal strategic risks identified in 2023/24 are
discussed below. These risks are not intended to be an extensive
analysis of all risks that may arise but more importantly are the
ones which we believe could cause business interruption.
-- 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. We expect to need to spend more money investing
in our systems as we continue our upgrades to our legacy
platforms.
-- Media - whilst this remains an area for future growth, it is
imperative that exploitation of our IP through media channels does
no harm to our core business. Our IP steering team meets every
month to discuss ongoing and future exploitation, to ensure that
all use of our IP, through all channels, is approved, correct and
consistent. It is fully supported by our in-house legal team who
will act when needed. The operational board meets quarterly to
review progress and current status of all licensing projects.
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
period; (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 no changes to the board since the annual report
for the 52 week period to 28 May 2023.
A list of all current directors is maintained on the investor
relations website at investor.games-workshop.com.
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.
Staff training and development
We care passionately about our global team. We have ambitious
long-term plans, but we also run the business with only the
resources we need. We will continue to recruit essential new jobs
or where we need to back-fill positions. Like last year, many of
these recruits will be in order to scale - in our factories and
warehouse facilities as well as in our support functions, mainly
IT.
We will continue to support lifelong learning and training to
develop the skills needed to enable all our staff to be successful
including offering apprenticeship opportunities for on the job
training. We are also more active in developing orderly succession
plans of both the board and senior management.
Customer focused
We continue to be customer focused - engaging better with our
existing customers and reaching new audiences with the Warhammer
hobby.
In Asia, our Warhammer cafe store in Tokyo recently celebrated
its first year anniversary - it was great fun, we are delighted
with the store and the progress we are making here. We continue to
build our hobby base in Japan and also China, and it's good to see
sales levels are now back to record levels.
Globally we are seeing encouraging performance from our
distribution and trade partners in growing emerging markets: sales
to Mexico, Thailand and closer to home in Switzerland, are at
record levels. It would be great to see some Warhammer stores in
these locations too...
Social responsibility
We have a clear plan and agreed priorities. We have recently
refreshed our equal opportunities training and our global
unconscious bias training. We continue in our commitment to
diversity and inclusion at Games Workshop. We have recently asked
staff to allow us to collect their ethnicity information, with
which over time we will be able to track trends.
Sustainability - climate change
We have made significant progress towards our scope 1 and 2
carbon emissions reduction target. We have switched our Memphis
warehouse electricity supply to a certified renewable source and
are working to secure renewables for our North American and
European retail stores in the rest of this year. We remain focused
on minimising energy usage and material resources, and with
processing any unavoidable waste sustainably. We are on track to
achieve our stated 55% reduction in scope 1 and 2 CO(2) emissions
significantly ahead of our 2032 target, a detailed update on
progress will be given in the 2024 annual report.
Outlook
We continue to perform well during challenging economic times,
delivering record group revenue, profit and dividends in the
period. Morale is good at Games Workshop and our hobbyists are
having fun too.
By order of the board
Kevin Rountree
CEO
Rachel Tongue
CFO
9 January 2024
CONSOLIDATED INCOME STATEMENT
26 weeks
Notes 26 weeks to to 52 weeks
26 November 27 November to
2023 2022 28 May 2023
GBPm GBPm GBPm
------------------------------- -------- -------------- -------------- -------------
Core revenue 235.6 212.3 445.4
Licensing revenue 12.1 14.3 25.4
------------------------------- -------- -------------- -------------- -------------
Revenue 2 247.7 226.6 470.8
Cost of sales (72.1) (76.0) (149.2)
------------------------------- -------- -------------- -------------- -------------
Core gross profit 163.5 136.3 296.2
Licensing gross profit 12.1 14.3 25.4
------------------------------- -------- -------------- -------------- -------------
Gross profit 175.6 150.6 321.6
Operating expenses 2 (81.1) (67.0) (151.4)
------------------------------- -------- -------------- -------------- -------------
Core operating profit 83.4 70.7 148.2
Licensing operating profit 11.1 12.9 22.0
------------------------------- -------- -------------- -------------- -------------
Operating profit 2 94.5 83.6 170.2
Finance income 1.2 0.4 1.3
Finance costs (0.5) (0.4) (0.9)
------------------------------- -------- -------------- -------------- -------------
Profit before taxation 3 95.2 83.6 170.6
Income tax expense 4 (23.8) (17.1) (35.9)
------------------------------- -------- -------------- -------------- -------------
Profit attributable to owners
of the parent 71.4 66.5 134.7
------------------------------- -------- -------------- -------------- -------------
Basic earnings per ordinary
share 5 216.9p 202.4p 409.7p
Diluted earnings per ordinary
share 5 216.3p 202.3p 409.4p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE
26 weeks
to 26 weeks to 52 weeks
26 November 27 November to
2023 2022 28 May 2023
GBPm GBPm GBPm
--------------------------------------------- -------------- ------------- -------------
Profit attributable to owners of
the parent 71.4 66.5 134.7
Other comprehensive income/(expense)
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations (0.1) 0.6 (1.5)
--------------------------------------------- -------------- ------------- -------------
Other comprehensive (expense)/income
for the period (0.1) 0.6 (1.5)
--------------------------------------------- -------------- ------------- -------------
Total comprehensive income attributable
to owners of the parent 71.3 67.1 133.2
--------------------------------------------- -------------- ------------- -------------
CONSOLIDATED BALANCE SHEET
26 November 27 November
Notes 2023 2022 28 May 2023
GBPm GBPm GBPm
---------------------------------- -------- ------------ -------------- ------------
Non-current assets
Goodwill 1.4 1.4 1.4
Other intangible assets 8 22.9 26.8 21.2
Property, plant and equipment 9 54.8 55.0 55.7
Right-of-use assets 10 47.5 48.4 48.9
Deferred tax assets 12.5 18.5 12.0
Other non-current receivables 11 16.0 16.4 13.6
---------------------------------- -------- ------------ -------------- ------------
155.1 166.5 152.8
---------------------------------- -------- ------------ -------------- ------------
Current assets
Inventories 36.3 31.8 33.0
Trade and other receivables 12 41.4 52.7 36.3
Current tax assets 5.3 4.3 14.5
Cash and cash equivalents 111.3 85.2 90.2
---------------------------------- -------- ------------ -------------- ------------
194.3 174.0 174.0
---------------------------------- -------- ------------ -------------- ------------
Total assets 349.4 340.5 326.8
---------------------------------- -------- ------------ -------------- ------------
Current liabilities
Lease liabilities (10.0) (9.7) (9.9)
Trade and other payables 13 (50.6) (37.0) (37.0)
Current tax liabilities (0.1) (0.1) (0.4)
Provisions for other liabilities
and charges (0.8) (0.9) (0.9)
---------------------------------- -------- ------------ -------------- ------------
(61.5) (47.7) (48.2)
---------------------------------- -------- ------------ -------------- ------------
Net current assets 132.8 126.3 125.8
---------------------------------- -------- ------------ -------------- ------------
Non-current liabilities
Lease liabilities (38.6) (39.8) (40.0)
Deferred tax liabilities (1.4) (0.4) (0.5)
Other non-current liabilities (0.7) (0.5) (1.4)
Provisions for other liabilities
and charges (1.7) (1.7) (1.6)
---------------------------------- -------- ------------ -------------- ------------
(42.4) (42.4) (43.5)
---------------------------------- -------- ------------ -------------- ------------
Net assets 245.5 250.4 235.1
---------------------------------- -------- ------------ -------------- ------------
Capital and reserves
Called up share capital 1.6 1.6 1.6
Share premium account 21.3 18.6 18.9
Other reserves 1.3 3.5 1.4
Retained earnings 221.3 226.7 213.2
---------------------------------- -------- ------------ -------------- ------------
Total equity 245.5 250.4 235.1
---------------------------------- -------- ------------ -------------- ------------
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 28 May 2023 and 29 May 2023 1.6 18.9 1.4 213.2 235.1
Profit for the 26 weeks to 26
November 2023 - - - 71.4 71.4
Exchange differences on translation
of foreign operations - - (0.1) - (0.1)
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the period - - (0.1) 71.4 71.3
Transactions with owners:
Share-based payments - - - 0.7 0.7
Shares issued under employee
sharesave scheme - 2.4 - - 2.4
Deferred tax credit relating
to share options - - - 0.2 0.2
Dividends paid to Company shareholders - - - (64.2) (64.2)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 2.4 - (63.3) (60.9)
---------------------------------------- --------- --------- ---------- ---------- --------
At 26 November 2023 1.6 21.3 1.3 221.3 245.5
---------------------------------------- --------- --------- ---------- ---------- --------
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 29 May 2022 and 30 May 2022 1.6 16.3 2.9 213.9 234.7
Profit for the 52 weeks to 28
May 2023 - - - 134.7 134.7
Exchange differences on translation
of foreign operations - - (1.5) - (1.5)
---------------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income for
the period - - (1.5) 134.7 133.2
Transactions with owners:
Share-based payments - - - 1.0 1.0
Shares issued under employee
sharesave scheme - 2.6 - - 2.6
Deferred tax charge relating
to share options - - - (0.2) (0.2)
Current tax credit relating
to exercised share options - - - 0.3 0.3
Dividends paid to Company shareholders - - - (136.5) (136.5)
---------------------------------------- --------- --------- ---------- ---------- --------
Total transactions with owners - 2.6 - (135.4) (132.8)
---------------------------------------- --------- --------- ---------- ---------- --------
At 28 May 2023 1.6 18.9 1.4 213.2 235.1
---------------------------------------- --------- --------- ---------- ---------- --------
CONSOLIDATED CASH FLOW STATEMENT
26 weeks 26 weeks
Notes to to 52 weeks
26 November 27 November to
2023 2022 28 May 2023
GBPm GBPm GBPm
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from operating activities
Cash generated from operations 7 116.9 104.7 231.7
UK corporation tax paid (14.6) (14.6) (31.3)
Overseas tax paid (0.7) (3.7) (7.7)
---------------------------------------- -------- ------------- -------------- -------------
Net cash generated from operating
activities 101.6 86.4 192.7
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from investing activities
Purchases of property, plant
and equipment (6.4) (7.4) (14.8)
Purchases of other intangible
assets (0.2) (0.4) (0.4)
Expenditure on product development (7.0) (7.0) (13.1)
Interest received 1.2 0.4 1.2
---------------------------------------- -------- ------------- -------------- -------------
Net cash used in investing activities (12.4) (14.4) (27.1)
---------------------------------------- -------- ------------- -------------- -------------
Cash flows from financing activities
Proceeds from issue of ordinary
share capital 2.4 2.3 2.6
Repayment of principal under
leases (5.8) (5.8) (11.8)
Lease interest paid (0.5) (0.4) (0.9)
Dividends paid to Company shareholders (64.2) (54.2) (136.5)
---------------------------------------- -------- ------------- -------------- -------------
Net cash used in financing activities (68.1) (58.1) (146.6)
---------------------------------------- -------- ------------- -------------- -------------
Net increase in cash and cash
equivalents 21.1 13.9 19.0
Opening cash and cash equivalents 90.2 71.4 71.4
Effects of foreign exchange rates
on cash and cash equivalents - (0.1) (0.2)
---------------------------------------- -------- ------------- -------------- -------------
Closing cash and cash equivalents 111.3 85.2 90.2
---------------------------------------- -------- ------------- -------------- -------------
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 28 May 2023 were approved by the board of directors on
24 July 2023 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 26 November 2023 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 28 May 2023 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 9 January 2024.
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 28
May 2023.
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 28 May
2023, 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. Share-based
payment charges and Group Profit Share Scheme charges to employees
have all been included in core operating expenses.
At 26 November 2023. Games Workshop has two segments, core and
licensing:
- Core: the core segment includes all revenue and expenditure
relating to the design, manufacture and sales of our fantasy
miniatures and related products. It also includes the revenue and
expenditure related to Warhammer+.
- 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 Warhammer Studio (which creates 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;
and
- Group: this includes the Company's overheads.
The chief operating decision-maker, identified as the executive
directors, assesses the performance of each segment based on
segmental operating profit. 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 26 November 2023 and 27 November 2022:
Core Licensing Total
---------------------------------- ---------------- ------------------ ----------------
2023 2022 2023 2022 2023 2022
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------- ------- -------- -------- ------- -------
Trade 136.1 120.9 - - 136.1 120.9
Retail 54.7 48.7 - - 54.7 48.7
Online 44.8 42.7 - - 44.8 42.7
Licensing - - 12.1 14.3 12.1 14.3
---------------------------------- ------- ------- -------- -------- ------- -------
Revenue 235.6 212.3 12.1 14.3 247.7 226.6
---------------------------------- ------- ------- -------- -------- ------- -------
Cost of sales (72.1) (76.0) - - (72.1) (76.0)
---------------------------------- ------- ------- -------- -------- ------- -------
Gross profit 163.5 136.3 12.1 14.3 175.6 150.6
---------------------------------- ------- ------- -------- -------- ------- -------
Trade (6.5) (5.6) - - (6.5) (5.6)
Retail (32.8) (30.1) - - (32.8) (30.1)
Online (6.8) (5.0) - - (6.8) (5.0)
Design, manufacturing, logistics
and operations (24.0) (18.0) - - (24.0) (18.0)
Licensing - - (1.0) (1.4) (1.0) (1.4)
Group (1.8) (1.9) - - (1.8) (1.9)
Share-based payment charge (0.7) (0.5) - - (0.7) (0.5)
Group Profit Share Scheme (7.5) (4.5) - - (7.5) (4.5)
---------------------------------- ------- ------- -------- -------- ------- -------
Operating expenses (80.1) (65.6) (1.0) (1.4) (81.1) (67.0)
---------------------------------- ------- ------- -------- -------- ------- -------
Operating profit 83.4 70.7 11.1 12.9 94.5 83.6
---------------------------------- ------- ------- -------- -------- ------- -------
Finance income 1.2 0.4 - - 1.2 0.4
Finance costs (0.5) (0.4) - - (0.5) (0.4)
---------------------------------- ------- ------- -------- -------- ------- -------
Profit before tax 84.1 70.7 11.1 12.9 95.2 83.6
---------------------------------- ------- ------- -------- -------- ------- -------
52 weeks to 28 May 2023:
Core Licensing Total
---------------------------------- -------- ---------- --------
GBPm GBPm GBPm
---------------------------------- -------- ---------- --------
Trade 248.0 - 248.0
Retail 106.4 - 106.4
Online 91.0 - 91.0
Licensing - 25.4 25.4
---------------------------------- -------- ---------- --------
Revenue 445.4 25.4 470.8
---------------------------------- -------- ---------- --------
Cost of sales (149.2) - (149.2)
---------------------------------- -------- ---------- --------
Gross profit 296.2 25.4 321.6
---------------------------------- -------- ---------- --------
Trade (11.8) - (11.8)
Retail (61.7) - (61.7)
Online (15.6) - (15.6)
Design, manufacturing, logistics
and operations (41.4) - (41.4)
Licensing - (3.4) (3.4)
Group (4.9) - (4.9)
Share-based payment charge (1.0) - (1.0)
Group Profit Share Scheme (11.6) - (11.6)
---------------------------------- -------- ---------- --------
Operating expenses (148.0) (3.4) (151.4)
---------------------------------- -------- ---------- --------
Operating profit 148.2 22.0 170.2
---------------------------------- -------- ---------- --------
Finance income 1.3 - 1.3
Finance costs (0.9) - (0.9)
---------------------------------- -------- ---------- --------
Profit before tax 148.6 22.0 170.6
---------------------------------- -------- ---------- --------
For information, we analyse core external revenue further
below:
26 weeks 26 weeks 52 weeks
to to to
26 November 27 November 28 May
2023 2022 2023
GBPm GBPm GBPm
----------------------------- ------------- ------------- ---------
Trade
UK and Continental Europe 58.0 50.9 105.0
North America 59.3 55.6 112.8
Australia and New Zealand 8.1 7.5 14.3
Asia 7.3 4.5 10.4
Rest of world 2.2 1.5 3.4
Black Library 1.2 0.9 2.1
Total Trade 136.1 120.9 248.0
----------------------------- ------------- ------------- ---------
Retail
UK 16.3 14.4 32.1
Continental Europe 11.0 9.7 21.1
North America 21.6 18.9 41.0
Australia and New Zealand 4.2 4.7 9.4
Asia 1.6 1.0 2.8
Total Retail 54.7 48.7 106.4
----------------------------- ------------- ------------- ---------
Online
UK 8.7 7.0 16.2
Continental Europe 7.1 7.2 15.6
North America 16.3 17.1 35.7
Australia and New Zealand 2.1 2.3 4.1
Asia 0.3 0.2 0.6
Rest of world 0.4 0.5 1.0
Digital 9.9 8.4 17.8
Total Online 44.8 42.7 91.0
----------------------------- ------------- ------------- ---------
Total core external revenue 235.6 212.3 445.4
----------------------------- ------------- ------------- ---------
3. Profit before taxation
26 weeks
to 26 weeks to 52 weeks
26 November 27 November to
2023 2022 28 May 2023
GBPm GBPm GBPm
--------------------------------------- -------------- -------------- --------------
Profit before taxation is stated
after charging:
Depreciation:
- Owned property, plant and equipment 7.0 6.8 13.7
- Right-of-use assets
Amortisation: 5.9 5.9 11.9
- Owned computer software 0.8 0.8 1.8
- Development costs 4.7 5.4 12.1
Impairment of computer software - - 0.7
Impairment of development costs - - 2.9
Employee and agency staff costs
(excluding capitalised salary costs) 62.8 54.3 115.8
Cost of inventories included in
cost of sales 29.5 30.8 56.0
Inventory provision creation 2.3 4.2 8.0
Unrealised and realised exchange
losses/(gains) 0.3 (0.1) 0.2
Loss on disposal of intangible
assets - - 0.2
Redundancy costs and compensation
for loss of office 0.3 0.4 1.1
--------------------------------------- -------------- -------------- --------------
4. Tax
The taxation charge for the six months to 26 November 2023 is
based on an estimate of the full year effective rate of 25.0%
(2022/23: 20.5%). As the UK and overseas tax rates are now more
closely aligned, the impact of any higher overseas rates is
minimal. The increase from the prior year reflects the rate
increase to 25% on UK taxable profits from 1 April 2023
onwards.
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
26 November 27 November to
2023 2022 28 May 2023
----------------------------------- ------------- ------------- ---------------
Profit attributable to owners of
the parent (GBPm) 71.4 66.5 134.7
---------------------------------------- ------------- ----------------- -----------
Weighted average number of ordinary
shares in issue (thousands) 32,919 32,849 32,881
---------------------------------------- ------------- ----------------- -----------
Basic earnings per share (pence
per share) 216.9 202.4 409.7
---------------------------------------- ------------- ----------------- -----------
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
26 November 27 November to
2023 2022 28 May 2023
---------------------------------------- ------------- ------------- -------------
Profit attributable to owners of
the parent (GBPm) 71.4 66.5 134.7
--------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary
shares in issue (thousands) 32,919 32,849 32,881
Adjustment for share options (thousands) 93 15 17
--------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary
shares for diluted earnings per
share (thousands) 33,012 32,864 32,898
--------------------------------------------- ------------- ------------- -------------
Diluted earnings per share (pence
per share) 216.3 202.3 409.4
--------------------------------------------- ------------- ------------- -------------
6. Dividends
Dividends of GBP47.7 million (145 pence per share) and GBP16.5
million (50 pence per share) were declared and paid in the six
months to 26 November 2023.
Dividends of GBP14.8 million (45 pence per share), GBP9.8
million (30 pence per share) and GBP29.6 million (90 pence per
share) were declared and paid in the six months to 27 November
2022.
7. Reconciliation of profit to cash generated from operations
26 weeks
to 52 weeks
26 weeks to 27 November to
26 November 2023 2022 28 May 2023
GBPm GBPm GBPm
---------------------- ---------------------------- ------------- ----------------------
Profit before taxation 95.2 83.6 170.6
Finance income (1.2) (0.4) (1.3)
Finance costs 0.5 0.4 0.9
--------------------------- ---------------------------- ------------- ----------------------
Operating profit 94.5 83.6 170.2
Adjustments for:
Depreciation of property, plant
and equipment 7.0 6.8 13.7
Depreciation of right-of-use assets 5.9 5.9 11.9
Impairment of intangible assets - - 3.6
Loss on disposal of property, plant
and equipment - 0.2 0.1
Loss on disposal of right-of-use
assets - - 0.1
Loss on disposal of intangible
assets - - 0.2
Amortisation of capitalised development
costs 4.7 5.4 12.1
Amortisation of other intangibles 0.9 0.8 1.8
Share-based payments 0.7 0.5 1.0
Exchange movements 1.1 - (1.6)
Changes in working capital:
-(Increase)/decrease in inventories (4.4) 7.8 6.0
-(Increase)/decrease in trade and
other receivables (7.4) (10.2) 8.1
-Increase in trade and other payables 13.9 3.5 4.2
-Increase in provisions - 0.4 0.3
---------------------------------------------- --------- ------------- ----------------------
Cash generated from operations 116.9 104.7 231.7
---------------------------------------------- --------- ------------- ----------------------
8. Other intangible assets
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ ------------
Net book value at beginning of
period 21.2 25.6 25.6
Additions 7.2 7.4 13.5
Disposals - - (0.2)
Amortisation charge (5.5) (6.2) (13.9)
Impairment - - (3.6)
Reclassification - - (0.2)
Net book value at end of period 22.9 26.8 21.2
--------------------------------- ------------ ------------ ------------
9. Property, plant and equipment
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ ------------
Net book value at beginning of
period 55.7 55.0 55.0
Additions 6.2 6.8 14.2
Disposals - (0.2) (0.1)
Depreciation charge (7.0) (6.8) (13.7)
Exchange differences (0.1) 0.2 0.1
Reclassification - - 0.2
Net book value at end of period 54.8 55.0 55.7
--------------------------------- ------------ ------------ ------------
10. Right-of-use assets
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
--------------------------------- -------------- -------------- --------------
Net book value at beginning of
period 48.9 48.1 48.1
Additions 4.9 5.7 12.7
Disposals - (0.1) (0.1)
Depreciation charge (5.9) (5.9) (11.9)
Exchange differences (0.4) 0.6 0.1
Net book value at end of period 47.5 48.4 48.9
--------------------------------- -------------- -------------- --------------
11. Other non-current receivables
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
------------------------------------- ------------ ------------ ------------
Licensing receivables 14.3 14.9 12.6
Other receivables 1.7 1.5 1.0
------------------------------------- ------------ ------------ ------------
Total other non-current receivables 16.0 16.4 13.6
------------------------------------- ------------ ------------ ------------
Licensing receivables represents amounts in respect of guarantee
instalments due in over one year.
12. Trade and other receivables
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
----------------------------------- ------------ ------------ ------------
Trade receivables 14.3 11.8 10.6
Prepayments and accrued income 12.1 14.7 9.3
Licensing receivables 10.5 10.3 11.3
Other receivables 4.5 15.9 5.1
Total trade and other receivables 41.4 52.7 36.3
----------------------------------- ------------ ------------ ------------
Included within licensing receivables is accrued income in
respect of unreported royalties of GBP1.9 million (2022/23: GBP2.2
million). In the previous period other receivables included a VAT
receivable of GBP11.6 million in respect of outstanding European
VAT receipts following Brexit. This has now been received in
full.
13. Trade and other payables
26 November 27 November 28 May 2023
2023 2022 GBPm
GBPm GBPm
--------------------------------- ------------ ------------ ------------
Trade payables 8.0 6.4 9.5
Other taxes and social security 3.0 3.3 3.5
Other payables 17.0 12.0 9.3
Accruals and deferred income 22.6 15.3 14.7
Total trade and other payables 50.6 37.0 37.0
--------------------------------- ------------ ------------ ------------
Included within accruals and deferred income is GBP8.6 million
of deferred income (2022/23: GBP1.9 million) due to an increase in
advance payments by trade and online customers. The advance
payments relate to made to order products and a recent change in
the preorder window for new release products.
14. Seasonality
The Group's monthly sales profile demonstrates an element of
seasonality around the Christmas period with increased sales in the
month of December.
15. Commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is GBP4.8 million (2022/23: GBP3.7 million), of
which GBP3.3 million (2022/23: GBP2.7 million) relates to tangible
fixed assets and GBP1.5 million (2022/23: GBP1.0 million) relates
to intangible fixed assets.
The Group has an additional commitment of GBP2.6 million
relating to the Australian warehouse lease where the Group has
entered into an agreement which creates an obligation but does not
yet have control of the underlying asset.
16. Related party transactions
There were no related party transactions during the period.
GLOSSARY
Alternative Performance Measures (APMs)
Closest
equivalent Reconciliation to closest IFRS measure
APM definitions IFRS measure where applicable
----------------------------- ------------------------ ----------------------------------------------
Revenue Core
Core revenue
revenue is
Direct reconciled
sales to
made revenue
of in
our note
core 2
products to
to the
external financial
customers, statements.
through
the
Group's
network
of
retail
stores,
independent
retailers
and
online
through
the
global
web
stores
Gross Core
Core profit gross
gross profit
profit is
Core reconciled
gross to
profit gross
is profit
core in
revenue note
less 2
all to
related the
cost financial
of statements.
sales
Operating Core
Core expenses operating
operating expenses
expenses are
Operating reconciled
expenses to
relating operating
to expenses
the in
core note
business 2
of to
selling the
directly financial
to statements.
external
customers
Operating Core
Core profit operating
operating profit
profit is
Core reconciled
operating to
profit operating
is profit
core in
revenue note
less 2
all to
related the
cost financial
of statements.
sales
and
operating
expenses
----------------------------- ------------------------ ----------------------------------------------
Revenue Licensing
Licensing revenue
revenue is
Income reconciled
relating to
to revenue
royalties in
earned note
from 2
third to
party the
licensees financial
statements.
Gross Licensing
Licensing profit gross
gross profit
profit is
Licensing reconciled
gross to
profit gross
is profit
licensing in
revenue note
less 2
any to
related the
cost financial
of statements.
sales
----------------------------- ------------------------ ----------------------------------------------
Operating Licensing
Licensing expenses operating
operating expenses
expenses are
Operating reconciled
expenses to
relating operating
to expenses
the in
licensing note
segments 2
to
the
financial
statements.
Operating Licensing
Licensing profit operating
operating profit
profit is
Licensing reconciled
operating to
profit operating
is profit
licensing in
revenue note
less 2
all to
related the
cost financial
of statements.
sales
and
operating
expenses
----------------------------- ------------------------ ----------------------------------------------
Revenue at constant Revenue These are calculated by converting underlying
currency revenue, core operating profit and licensing
operating profit amounts at local currency
values for the current period at the
prior period average exchange rate.
Core operating profit Operating
at constant currency profit
Licensing operating Operating
profit at constant currency profit
Amounts for current
and prior periods, stated
at a constant exchange
rate.
2023 2022
Actual Impact Constant Actual
of FX currency
GBPm GBPm GBPm GBPm
------- ------- ---------- -------
Revenue 247.7 7.2 254.9 226.6
Core operating profit 83.4 4.4 87.8 70.7
Licensing operating profit 11.1 0.4 11.5 12.9
-------------------------------------------------------------------------------------------------------
Cash generated - pre Net increase/(decrease) Net increase in cash-pre dividends paid
dividends paid in cash can be calculated by taking the net
Movement in cash in and cash increase/(decrease) in cash and cash
the period before any equivalents equivalents (2023/24: GBP21.1m, 2022/23:
payments of dividends GBP13.9m) and adding back the dividends
are taken into account which have been paid in the period (2023/24:
GBP64.2m, 2022/23: GBP54.2m).
----------------------------- ------------------------ ----------------------------------------------
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END
IR UPUWUGUPCPUR
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January 09, 2024 02:00 ET (07:00 GMT)
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