Games Workshop’s record revenue and profit growth justifies valuation

One may argue Games Workshop’s lofty valuation has been justified by the news of the British miniature wargames manufacturer’s record profit and dividend in the last six months.

The manufacturer announced raising the dividend to 120 pence per share, bringing the total dividends declared in 2023–24 to £3.15 per share. Comparatively, in 2022–23, it was £2.95 per share.

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Furthermore, the company’s pre-tax profits soared to £95.2 million in the last six months.

Earnings per share (EPS) have also seen an uptick, rising from 202.4p to 216.9p. In a show of confidence, the dividend has been raised to 195p from the previous 165p for this period.

The Games Workshop’s shares were down 1% at the time of writing on Tuesday, but have been recovering all morning. The company’s shares are 205% higher over the past five years.

“2023 could mark another significant turning point for Games Workshop,” said Mark Crouch, analyst at eToro, “as the fantasy miniatures maker has finalised an agreement with Amazon granting exclusive rights to films and television series set within the Warhammer 40,000 universe.”

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“And while there are some further details to be agreed upon, this could be the key to unlocking yet more growth in a company whose share price has risen twentyfold in the last seven years but has recently been unable to breach the highs of late 2022,” he added.

“The company does have an above-average PE, but many will argue that IPs like this really have no bounds, and for now at least North America, Europe, and the UK make up the majority of the company’s stores and coverage, so Games Workshop will now aim to expand to the rest of the world, which is, as the company themselves put it, “green field territory”,” further said Crouch.

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