We said we'd break down the Games Workshop report when it dropped, and it just did. Core revenue came in at £626.8 million against guidance of "not less than" £625 million, and profit before tax hit £275.7 million against a £265 million floor. Both are all-time highs. The share price fell anyway. Here's what the finals show.
Quick refresher on where we left it. The trading update ahead of this report guided to core revenue of "not less than" £625 million for the year ended May 31st, up from £565 million, with profit before tax pegged at "not less than" £265 million against last year's £262.8 million. Because that was floor guidance, the finals could only move one way.
The Licensing Line
Licensing was expected to land around £30 million against last year's £52.5 million.
The final figure is £32.9 million, so it came in slightly ahead of what GW pointed to in May, but it's still a drop of roughly 37% year over year. The licensing operating profit fell further, from £49.5 million to £29.9 million.
The framing hasn't moved. GW still puts the decline down to the absence of another Space Marine 2, calling the fall in line with what it expected after that game launched in the prior year. It also notes the title keeps earning long after release.
The cash tells a similar story: receipts from licensees came in at £42.9 million against £57.0 million, with £5.9 million of that final payments from two licensees who had already given notice they were walking away.
One hit game explains a £19.6 million swing in that line, which makes licensing the least predictable money GW earns. The core business set a record in the same year and it made no difference to that.
Margins, Tariffs, And The Slate
Margins went the right way. Core gross margin improved to 71.1% from 69.5%, and core operating margin rose to 39.1% from 37.5%. Warehousing costs came down, while manufacturing costs went up on staff pay rises.
The number that stands out is tariffs: GW paid around £12 million in new US tariffs during the year, reclaimed £7.8 million of it after a Supreme Court ruling, and expects to pay roughly £13 million more in the coming year. That's a legitimate expense on top of a business that just posted record profits.
The slate is the part that should interest players most, and it's deep. Two games shipped during the year, Warhammer 40,000: Dawn of War - Definitive Edition and Warhammer 40,000: Mechanicus 2. Four more are announced: Deathmaster, Chaos Gate - Deathwatch, the mobile Boltgun Boom, and a Total War: Warhammer 40,000.
On screen, the Amazon deal for the 40K universe is moving forward, with GW saying only that it continues in line with the contract, and a new animated Deathwatch series has been greenlit for Amazon, written by John Orloff and animated by Blur. An Age of Sigmar episode for the second season of Secret Level is also close to being finished.
It's been a year since the first report, and none of it has a release date yet.
On the dividend, GW declared £4.85 a share across the year against £4.20 the year before, sticking to its habit of handing back cash it considers truly surplus. The amount actually paid out during the period was £160.1 million, down from £171.4 million, because declarations and payment dates fall in different weeks.
The core hobby did its job. New starter sets pulled fresh players into 40K, codex prices came DOWN by a third under the new softcover format, and the miniatures sold their way to a record year. At £626.8 million against £32.9 million of licensing, that's where nearly all the money comes from.
So which is it, a pause between paydays or the new baseline? On this year's evidence, £32.9 million is what a normal licensing year looks like for GW right now. Four announced games and two Amazon productions with no dates on any of them can't lift a single reporting year, and GW's own explanation is that the money follows the big releases.
The market read it the same way, marking the shares down about 3.5% on a day the company posted record revenue AND record profit.
Does the full report change how you read the licensing slump, or was the trading update already the whole story? For tabletop players, has any of this reached your gaming table?
Let us know in the comments below!
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