Thursday, January 15, 2015

A Look At GW's Half Year Result

GW released their half year result overnight and it is currently causing some "noise" on forums, blogs and news sites.

At a headline level they generated a GBP 6.3 million profit down from GBP 7.7 million for a similar period last year. This was achieved against falling revenues of 6.5% of which about half was due to currency fluctuations.

Now everybody is currently a business expert and financial analyst and are pulling apart the numbers and expousing their views. I'm neither so I won't try and sell you as to whether this is a good result, poor result or whether GW are going gangbusters or taking their last breath. Suggest you click on the link and have a read if interested.

What I thought I would do though is highlight a couple of things in the report that opened my eyes a bit.

Firstly, GW retail operations (company branded stores) operated at a loss of GBP 1.3 million for the six month period. This despite the move to an increasing number of one man stores. This made me think and so I went and looked in their annual report to see how many stores they had. As a May 2014 they had 414 retail outlets of various size. Over the period they had a net 4 closures - opened 12, closed 16 - so as at 30 November there were 410 outlets. These outlets generated sales of GBP 23.7 million. This equates to approximately NZD 47.4 million (USD 36.9 million). Breaking this down, that means sales revenue on a per store basis were GBP 57,800 (USD 90,000 and NZD 115,600) for the six month period. On a weekly basis this means that the average GW Hobby Centre has sales of GBP 2,223 / USD 3,462 / NZD 4,446. Assuming the average shop is open six days a week (mix of 5 for one man operations and 7 for multi-staff stores) then that means daily sales of GBP 370/USD 577/NZD 741.

This was a little bit of an eye-openner.

Secondly, despite spending GBP 4 million on their new web store sales were largely stagnant (read slightly down) through that avenue despite the release of 40k 7th Ed at start of period and End Times at the end.

Thirdly, under "Trade" they say "This channel showed growth in North America, Australia and the UK, offset by larger declines in non-strategic accounts and magazine sales. The net effect was a decline of 5.1%". I'm guessing from this we can assume the sales of White Dwarf Weekly and Warhammer Visions have not been stellar and would appear to have significantly underperformed its predecessor.

So a few interesting titbits there to digest.


  1. What I find interesting is the continued statement it's the guys on the ground that hold the secret to GW's continued success, even though the age range of their customers is continuing to increase globally, so all the stores are failing to recruit. BTW direct sales from stores are attributed to the website not the store, even if delivered to store. So the stores may be selling somewhat more than that.

  2. Nice analysis Pete @ $741 per day the average store can't be breaking even or at least must be only just getting there relying on seasonal boosts to get over the line. I wonder how local stores in NZ do by comparison?

  3. That was my thoughts. Manager, rent, cost of product (and ancilliary costs) don't look like it leaves much.