Games Workshop Group — Core revenue growth offsets licensing decline

Games Workshop Group (LSE: GAW)

Currency in GBP

Last close As at 26/01/2023

GBP91.45

−185.00 (−1.98%)

Market capitalisation

GBP3,070m

Research: Consumer

Games Workshop Group — Core revenue growth offsets licensing decline

Games Workshop Group’s (GAW’s) record H123 results included strong revenue recovery in Retail as COVID-19 restrictions eased, foreign exchange gains, offset by some negative effects, specifically from Russia and China, and flat sales in the key North American market. The lower reported profit reflects the well-known external cost pressures and investment to support future revenue growth, partially offset by good cost control. Our profit estimates are unchanged but we increase our dividend estimate. The recent strong share price performance takes the prospective FY23e multiple (23.9x) to between its recent long-run average (17.2x) and peak multiples (over 30x).

Russell Pointon

Written by

Russell Pointon

Director, Consumer

Consumer

Games Workshop Group

Core revenue growth offsets licensing decline

H123 results

Consumer goods

12 January 2023

Price

£93.25

Market cap

£3,069m

Net cash (£m) at 20 November 2022 (excluding lease liabilities)

85.2

Shares in issue

32.9m

Free float (%)

99

Code

GAW

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

43.0

93.9

173.1

Rel (local)

38.4

72.1

174.4

52-week high/low

935p

223p

Business description

Games Workshop is a leading international specialist designer, manufacturer and multi-channel retailer of miniatures, scenery, artwork and fiction for tabletop miniature games set in its fantasy Warhammer worlds.

Next events

FY23 trading update

June 2023

Analysts

Russell Pointon

+44 (0)20 3077 5700

Milo Bussell

+44 (0)20 3077 5700

Games Workshop Group is a research client of Edison Investment Research Limited

Games Workshop Group’s (GAW’s) record H123 results included strong revenue recovery in Retail as COVID-19 restrictions eased, foreign exchange gains, offset by some negative effects, specifically from Russia and China, and flat sales in the key North American market. The lower reported profit reflects the well-known external cost pressures and investment to support future revenue growth, partially offset by good cost control. Our profit estimates are unchanged but we increase our dividend estimate. The recent strong share price performance takes the prospective FY23e multiple (23.9x) to between its recent long-run average (17.2x) and peak multiples (over 30x).

Year
end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

05/21

369.6

150.9

370.5

235.0

25.2

2.5

05/22

414.8

156.5

390.6

235.0

23.9

2.5

05/23e

447.0

160.4

389.6

320.0

23.9

3.4

05/24e

461.1

169.2

384.5

320.0

24.3

3.4

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

H123: Forex benefit, cost inflation and investment

Reported H123 revenue of £226.6m (+7% y-o-y) and PBT of £83.6m (-5% y-o-y) compare with figures provided in the December 2022 trading update of ‘not less than’ £224m and £83m, respectively. Practically all of the revenue growth was due to foreign exchange gains, with growth in core revenue (constant currency +4% yo-y) being offset by lower licensing revenue (constant currency -37%) against a tough comparative from H122. Profits declined due to external cost inflation and ongoing internal investment. A significant improvement in cash flow generation, mainly due to more favourable working capital, has provided handsome rewards for shareholders; a fourth dividend, 130p/share, for the year has been declared, with the results taking the cumulative total for the year to 295p/share.

Profit estimates unchanged

We upgraded our revenue estimates for FY23 and FY24 following the December 2022 trading update, but held our profit estimates. We further upgrade our FY23 revenue estimates to reflect better growth in core revenue in H123, continued sterling weakness and a minor reduction to licensing revenue, but retain our profit estimates. External cost pressures, such as freight and materials, are easing, as is the benefit from sterling weakness. Our forecasts include a higher corporation tax charge (increases to 25% from 19% in April 2023).

Valuation: Recent re-rating

The share price has performed well since the start of Q322 as the wider market has recovered, and with a notable boost provided by the announcement of an agreement in principle with Amazon to develop film and television content. The prospective FY23e P/E multiple of 23.9x is above the post FY17 average multiple, but below peak multiples of over 30x. Our discounted cash flow (DCF)-based valuation has increased to £102/share (£100/share previously).

H123 results: Retail recovery, forex gains, cost inflation

On a reported basis, GAW’s revenue grew by c 7% to £226.6m, while operating profit declined by c 6% to £83.6m, and PBT declined by c 5% to £83.6m. There were quite divergent trends in the key reported revenue lines, and the previously flagged external cost inflation and investment to support future growth negatively affected profitability.

The new release indicates that management was aiming for a slightly better out-turn than reported, which was affected by lower growth in North America than expected, albeit its revenue was flat in constant currency and had a tough comparative. Also, management highlights that new IT systems and other projects are taking longer to complete and at higher cost than expected.

Exhibit 1: Summary financials

£m

H122

H222

FY22

H123

Revenue

211.6

203.2

414.8

226.6

Constant currency growth y-o-y

6.4%

N/D

13.3%

0.0%

Core revenue

191.5

195.3

386.8

212.3

Constant currency growth y-o-y

6.4%

N/D

10.8%

4.0%

- Trade

108.1

106.2

214.3

120.9

Constant currency growth y-o-y

8.5%

N/D

12.0%

3.4%

- Retail

41.9

45.3

87.2

48.7

Constant currency growth y-o-y

17.3%

N/D

24.6%

9.8%

- Online

41.5

43.8

85.3

42.7

Constant currency growth y-o-y

(7.0%)

N/D

(2.7%)

(0.5%)

Licensing revenue

20.1

7.9

28.0

14.3

Constant currency growth y-o-y

N/D

N/D

66.3%

(37.3%)

Gross profit

151.4

136.0

287.4

150.6

Gross margin

71.6%

66.9%

69.3%

66.5%

Core gross profit

131.3

128.1

259.4

136.3

Gross margin

68.6%

65.6%

67.1%

64.2%

Licensing gross profit

20.1

7.9

28.0

14.3

Gross margin

100.0%

100.0%

100.0%

100.0%

Operating income

88.5

68.6

157.1

83.6

Margin

41.8%

33.8%

37.9%

36.9%

Constant currency growth y-o-y

2.4%

0.0%

6.5%

(14.5%)

Core operating income

69.7

62

131.7

70.7

Margin

36.4%

31.7%

34.0%

33.3%

Constant currency growth y-o-y

N/D

N/D

N/D

(7.5%)

Licensing operating income

18.8

6.6

25.4

12.9

Margin

93.5%

83.5%

90.7%

90.2%

Constant currency growth y-o-y

N/D

N/D

64.0%

(40.4%)

Source: Games Workshop, Edison Investment Research

With around three-quarters of revenue earned overseas, GAW was a key beneficiary of sterling weakness, particularly against the US dollar, which appreciated by c 14% from an average of $/£1.37 in H122 to $/£1.18 in H123. At a current exchange rate of $/£1.22 it remains supportive for FY23 results, given the average exchange rate for the prior year was $/£1.34.

Excluding all currency gains, total revenue was flat versus the prior year. This included steady core revenue growth of 4%, following 6% growth in the comparative period, while licensing revenue declined by c 37% against a very tough comparative from H122 when the reported revenue of £20.1m was higher than GAW had reported in any prior full financial year. The average retail recommended price increase for core during H122 was broadly the same as last year. This is typically c 3%, implying small underlying volume growth for core revenue.

Within core revenue, GAW’s most significant revenue stream, Trade, grew by c 3% at constant currency so that reported revenue was £120.9m. Growth was helped by the addition of new accounts, but was negatively affected by slowing order rates in North America and the bedding in of new processes and systems in Memphis which affected distribution; reduced sales in China (£1m) due to COVID-19, albeit not as bad as management forecast; and the loss of sales in Russia (£2m in H123). Management is optimistic about performance improving in North America as the integration issues fade.

Retail continued its strong recovery as COVID-19 restrictions continued to ease, with c 10% constant currency growth in H123, following 17% in H122. To indicate the scale of the recovery, Retail’s revenue of £48.7m is ahead of any prior set of interim results (prior peak of £45.8m in H120), albeit there is some currency benefit in these figures of £2.7m versus the prior interim period. By geography, management highlights particular strength in the UK, with record sales, while North America was flat on a constant currency basis given a tough comparative.

At constant currency, Online revenue declined marginally, by 0.5%, to £42.7m, likely reflecting channel switching as customers have more options to purchase as COVID-19 restrictions reduce.

As licensing revenue has a gross margin of 100%, the total reported gross margin (66.5% in H123 versus 71.6% in H122) is significantly affected by the relative performance of licensing and core revenue given the latter’s gross margin is much lower, at 64.1% in H123. Management highlights a number of external cost pressures (materials and carriage costs) and internal investment (headcount and facilities) to support future revenue growth that have affected core gross margin, which declined by 450bp from 68.6% in H122. These represented 410bp of the core gross margin decline at constant currency (material costs 1.9%, carriage costs 1.2%, staff costs 0.5%, new facilities 0.5%) and there was a higher inventory provision, 0.4% of core sales, taking the total gross margin decline from these items to 450bp. The former should fade as a negative influence on gross margin as external cost inflation eases, but management continues to invest for the long term in staff and facilities.

The decline in core’s gross margin was mitigated by lower operating expenses relative to revenue during the period, restricting the core operating margin decline to 310bp, ie reducing to 33.3% from 36.4% in H122. This was helped by a lower relative profit share scheme charge, the lower cost was equivalent to 150bp of core revenue.

Balance sheet and cash flow

A significant improvement in operating cash flow, coupled with lower investment in fixed and intangible assets, led to a very healthy increase in free cash flow in the period, all on an absolute basis and relative to revenue.

Operating cash flow increased by £25.7m y-o-y to £86.4m in H123, which reflects a combination of lower reported operating profit offset by a marked positive £29.9m swing in working capital investment from an outflow in H122 to an inflow of £1.5m in H123. Working capital has been helped by a reduction in core investment and higher licensing inflows. The resulting free cash flow before interest of £71.6m (£45.2m H122) has been used to fund dividend payments of £54.2m in the period. With the results release management has declared a further dividend of 130p/share, taking the year-to-date total, including the three dividends previously declared, to 295p/share, already well ahead of the 235p/share declared in both FY21 and FY22, and our prior forecast for FY23 of 235p/share.

At the period end, the closing cash balance of £85.2m increased versus the end-FY22 position of £71.4m, but was below the £88.6m reported at the end of H122. The period-end leases of £49.5m reduce the net cash position including leases to £35.7m.

Amazon: Content development opportunity

In December 2022, GAW announced it had reached an agreement in principle with Amazon to develop GAW’s intellectual property into film and television productions and for Games Workshop to grant associated merchandising rights. Historically, GAW has focused on animation, therefore the content in the potential deal would likely be very different to that. At the time, management indicated it makes no change to forecasts for the current financial year.

There was no further detail in the interim results press release about the potential deal.

Forecasts: Profit estimates unchanged

We increase our revenue estimates for FY23 by just under 2% to £447m, from £439m previously, but retain our prior profit estimates for FY23 and FY24.

The upgrade to revenue reflects the slightly better out-turn for core revenue in H123 results and implies lower core revenue growth for the remainder of the year (c 6%) as the benefit from sterling weakness reduces. Our estimate for licensing revenue reduces modestly to £28.6m from £29.2m previously.

We include a higher corporate tax rate in FY23, recognising the increase in the standard corporate tax rate to 25% from April 2023.

Valuation: Recent re-rating

The share price has performed well since the start of the October as the wider stock market has recovered, and particularly so since the announcement of the agreement in principle with Amazon.

At £93.25, the P/E multiple for FY23e using our new estimates has increased to 23.9x, which is well above the average since FY17 of 17.2x, but well below the peak multiples of over 30x in FY20 and FY21.

Our DCF-based valuation increases to £102 (£100 previously) to reflect the H123 net cash position.

Exhibit 2: Financial summary

Year-end May

£m

 

2019

2020

2021

2021R

2022

2023e

2024e

 

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

Total revenues

 

 

256.6

269.7

353.2

369.6

414.8

447.0

461.1

- Core revenue

 

 

256.6

269.7

353.2

353.2

386.8

418.5

430.5

- Licensing revenue

 

 

0.0

0.0

0.0

16.3

28.0

28.6

30.7

Cost of sales

 

 

(83.3)

(89.1)

(96.3)

(96.4)

(127.4)

(146.5)

(139.9)

Gross profit

 

 

173.3

180.6

256.9

273.2

287.4

300.6

321.2

SG&A (expenses)

 

 

(103.4)

(107.4)

(121.5)

(121.5)

(130.3)

(136.7)

(146.9)

Other operating income/(expense)

 

 

11.4

16.8

16.3

15.0

25.4

25.8

27.6

EBITDA (excl royalties)

 

 

85.7

98.8

162.0

163.3

167.8

170.7

183.5

EBITDA

 

 

97.1

115.6

178.3

178.3

193.2

196.5

211.1

Depreciation and amortisation

 

 

(15.9)

(25.6)

(26.6)

(26.6)

(36.1)

(35.4)

(39.8)

Operating profit (before royalties and exceptionals)

 

 

69.8

73.2

135.4

136.7

131.7

135.3

143.7

Licensing

 

 

11.4

16.8

16.3

15.0

25.4

25.8

27.6

Reported operating profit

 

 

81.2

90.0

151.7

151.7

157.1

161.1

171.3

Finance income/(expense)

 

 

0.1

(0.6)

(0.8)

(0.8)

(0.6)

(0.7)

(2.0)

Reported PBT

 

 

81.3

89.4

150.9

150.9

156.5

160.4

169.2

Income tax expense (includes exceptionals)

 

 

(15.5)

(18.1)

(28.9)

(28.9)

(28.1)

(32.1)

(42.3)

Adjusted net income

 

 

65.8

71.3

122.0

122.0

128.4

128.3

126.9

Reported net income

 

 

65.8

71.3

122.0

122.0

128.4

128.3

126.9

WASC (m)

 

 

32.438

32.602

32.733

32.733

32.813

32.875

32.944

Diluted average number of shares (m)

 

 

32.785

32.736

32.927

32.927

32.873

32.935

33.004

Reported EPS (p)

 

 

202.9

218.7

372.7

372.7

391.3

390.3

385.2

Reported diluted EPS (p)

 

 

200.8

217.8

370.5

370.5

390.6

389.6

384.5

Adjusted diluted EPS (p)

 

 

200.8

217.8

370.5

370.5

390.6

389.6

384.5

DPS (p)

 

 

155.0

145.0

235.0

235.0

235.0

320.0

320.0

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

67.5%

67.0%

72.7%

73.9%

69.3%

67.2%

69.7%

EBITDA margin (excl royalties)

 

 

33.4%

36.6%

45.9%

44.2%

40.5%

38.2%

39.8%

EBITDA margin (incl royalties)

 

 

37.8%

42.9%

50.5%

48.2%

46.6%

43.9%

45.8%

Operating margin

 

 

31.6%

33.4%

43.0%

41.0%

37.9%

36.0%

37.1%

BALANCE SHEET

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

35.3

42.0

49.8

49.8

55.0

57.4

59.2

Right-of-use assets

 

 

 

31.9

46.0

46.0

48.1

46.9

45.7

Goodwill

 

 

1.4

1.4

1.4

1.4

1.4

1.4

1.4

Intangible assets

 

 

16.0

17.6

23.7

23.7

25.6

30.8

33.8

Other non-current assets

 

 

11.7

16.4

16.4

16.4

37.2

37.2

37.2

Total non-current assets

 

 

64.4

109.3

137.3

137.3

167.3

173.7

177.2

Cash and equivalents

 

 

29.4

52.9

85.2

85.2

71.4

75.6

92.5

Inventories

 

 

24.2

20.7

27.5

27.5

38.4

52.8

51.4

Trade and other receivables

 

 

18.8

19.6

30.6

30.6

39.6

45.8

47.2

Other current assets

 

 

0.8

0.2

1.1

1.1

4.4

4.4

4.4

Total current assets

 

 

73.2

93.4

144.4

144.4

153.8

178.6

195.5

Trade and other payables

 

 

(19.2)

(30.3)

(35.4)

(35.4)

(33.5)

(42.3)

(42.5)

Borrowings

 

 

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Leases

 

 

0.0

(8.3)

(8.6)

(8.6)

(9.2)

(9.2)

(9.2)

Other current liabilities

 

 

(10.1)

(4.5)

(0.7)

(0.7)

(1.9)

(1.9)

(1.9)

Total current liabilities

 

 

(29.3)

(43.1)

(44.7)

(44.7)

(44.6)

(53.4)

(53.6)

Borrowings

 

 

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Leases

 

 

0.0

(23.8)

(38.4)

(38.4)

(39.7)

(37.2)

(34.1)

Other non-current liabilities

 

 

(1.9)

(2.1)

(2.3)

(2.3)

(2.1)

(2.1)

(2.1)

Total non-current liabilities

 

 

(1.9)

(25.9)

(40.7)

(40.7)

(41.8)

(39.3)

(36.2)

Net assets

 

 

106.5

133.7

196.3

196.3

234.7

259.6

283.0

CASH FLOW STATEMENT

 

 

 

 

 

 

 

 

 

EBIT

 

 

81.2

90.0

151.7

151.7

157.1

161.1

171.3

Depreciation and amortisation

 

 

15.9

25.0

26.2

26.2

34.8

35.4

39.8

Impairments

 

 

0.0

0.6

0.4

0.4

1.3

0.0

0.0

Share-based payments

 

 

0.3

0.5

1.2

1.2

1.6

1.8

1.9

Other adjustments

 

 

0.3

0.3

0.1

0.1

0.3

0.0

0.0

Movements in working capital

 

 

(9.0)

10.8

(14.8)

(14.8)

(35.9)

(11.8)

0.1

Income taxes paid

 

 

(16.3)

(22.7)

(32.1)

(32.1)

(37.7)

(32.1)

(42.3)

Operating cash flow

 

 

72.5

104.5

132.7

132.7

121.5

154.4

170.8

Net capex and intangibles

 

 

(22.5)

(24.6)

(30.0)

(30.0)

(32.3)

(31.8)

(33.4)

Net interest

 

 

0.1

0.1

0.2

0.2

0.2

(0.7)

(2.0)

Net proceeds from issue of shares

 

 

0.7

0.8

1.4

1.4

1.8

0.0

0.0

Dividends paid

 

 

(50.3)

(47.3)

(60.5)

(60.5)

(93.5)

(105.2)

(105.4)

Other financing activities

 

 

0.0

(10.3)

(10.9)

(10.9)

(11.9)

(12.5)

(13.1)

Net cash flow

 

 

0.5

23.2

32.9

32.9

(14.2)

4.2

16.9

Opening cash and cash equivalents

 

 

28.5

29.4

52.9

85.2

85.2

71.4

75.6

Currency translation differences and other

 

 

0.3

0.3

(0.6)

(0.6)

0.4

0.0

0.0

Closing cash and cash equivalents

 

 

29.4

52.9

85.2

117.5

71.4

75.6

92.5

Closing net cash (including leases)

 

 

29.4

20.8

38.2

38.2

22.5

29.2

49.2

Source: Company accounts, Games Workshop Group

General disclaimer and copyright

This report has been commissioned by Games Workshop Group and prepared and issued by Edison, in consideration of a fee payable by Games Workshop Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Games Workshop Group and prepared and issued by Edison, in consideration of a fee payable by Games Workshop Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Games Workshop Group

View All

Latest from the Consumer sector

View All Consumer content

Research: Healthcare

Basilea Pharmaceutica — Revenue upside surprise for 2022

Basilea has announced preliminary, unaudited revenue results for FY22, together with an operational update on its commercial and pipeline assets. Revenues related to the company’s marketed products, Cresemba and Zevtera, were c CHF122m (FY21: CHF131m), exceeding the high end of management guidance by c 17%. Basilea also received revenue in the form of Biomedical Advanced Research and Development Authority reimbursements, proceeds from strategic oncology transactions and other revenue contributions, bringing total revenues for the period to c CHF148m (FY21: CHF148m), which exceed the high end of FY22 guidance by c 21%. In our view, the potential marketing approval of Zevtera in the US will be critical to drive revenue growth. We will update our estimates and valuation after the announcement of Basilea’s full year-end results in February.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free