Miniatures of medieval fantasy universes and futuristic wars are making a name to be respected on the British stock market. The classic Warhammer game, which has been around for almost 4 decades, has not stopped growing in recent years. The parent company, Games Workshop, has accelerated its revenues and profits since 2017, and its stock price has skyrocketed by 1,876% in the last 8 years, that is, 45.8% annualized in this period. Last week put the icing on the cake: after improving its revenue forecast, the firm’s shares rose 17% on Friday, a rally that has allowed the firm to increase its capitalization by 642 million pounds in a single day. Now the entire company, which continues to open new business avenues related to the universe it created 46 years ago, and prepares new audiovisual content with an agreement with Amazon’s film studios, reaches 4.5 billion pounds in valuation, and is knocking on the door of the UK’s most important stock market index: the FTSE 100, where the big British ‘blue chips’ are listed.
What began in 1975 as a small company dedicated to manufacturing boards for board games such as backgammon, mancala or Go, ended up a few years later becoming an entire fantasy universe, set in a sister world to the one created by JRR Tolkien at the beginning of the century. XX. Dwarves, dark elves, wererats, and even a futuristic lore with space marines and a race of orcs that had managed to perpetuate themselves until the era of spaceships, have been winning over several generations of fans of miniatures and role-playing games. , and Games Workshop has been making money with it for almost 50 years.
The business has been so prosperous that the company has ended up knocking on the doors of the most select club on the British stock market: the FTSE 100 index, which includes the hundred most important companies on the United Kingdom listed market. According to the agency Bloombergthere are already some analysts who are beginning to propose the inclusion of the company in the main English selective, a decision about which there will be more information this Tuesday, when FTSE Russell will announce the companies that opt to enter the selective, a decision that will be made next December 3rd.
The market capitalization of the companies is the key to incorporation into the selective index, since the index includes the 100 largest companies by capitalization within the London Stock Exchange, as long as they meet the necessary liquidity criteria. And in this case, Games Workshop now has enough capitalization to become part of the FTSE 100since, after the rise that the company experienced on Friday, its market capitalization has climbed to 4.5 billion pounds, a new record for the company, which would place it, according to data from Bloombergas the 73rd largest on the entire British stock market.
The entry of the company into the FTSE 100 could provide a new boost for the firm’s shares, since the funds that replicate the behavior of the British selective would be forced to buy shares of the company in order to correctly emulate the movements of the index.
Skyrocketing growth since 2017
Games Workshop’s big leap occurred in 2017. Until that year, the company had always moved below 300 million pounds of capitalization. It was then, in 2017, when the firm’s revenues and profits began to skyrocket. quickly, giving rise to a stock market rally that has lasted for the last 8 years, although there have been ups and downs in between.
In the last 8 years, the company’s shares have appreciated more than 1,870%, or in other words, a growth of almost 46% year-on-year in that period. The price increase that occurred last Friday had its origin in the improved outlook presented by the company, which now recognizes that it will achieve pre-tax profits of 120 million pounds in the first six months of 2024, a growth of 25% compared to the same period of the previous year, and which exceeds the expectations that existed until this moment.
How has Games Workshop managed to accelerate its business? The company is divided into three legs: retail, trade and licensing, and all three have shown strong growth in recent years. It was in 2017 when revenue figures began to rebound strongly, and have maintained sustained growth every year since then. In 2016 Games Workshop had closed the year with 118 million pounds in revenue, an amount that grew by 33.8% in 2017, and continued in the following years: 39% annually in 2018, 16% in 2019, 5 % in 2020, 37% in 2021… like this, until reaching $525.7 million in fiscal year 2024, the best year in its history (the fiscal year closed last August).
The company has managed to increase the weight of its ‘trade’ business, which consists of sales to establishments that have its products, but that are not part of the Games Workshop store network, until it becomes its main business leg. with 54.9%, compared to the 22% represented by sales in its own stores (retail business) and 17.7% from the online business. It is striking that the latter, in the midst of the digital era, is losing weight for the firm year after year in relation to the traditional business, although online sales are also increasing every year. Consumers still want classic miniatures and go to physical stores, where Games Workshop has managed to create a solid community of fans.
But it’s not all about painting miniatures and playing with them on a physical board: part of the company’s growth has been achieved thanks to the launch of content related to the game, such as books, magazines or even short films that are broadcast on a TV channel. streamingWarhammer+, which already has more than 170,000 subscribers. In addition, the company has launched several video games, in collaboration with other famous titles, which have also made a place for themselves in this universe.
The last big step for the firm has been the agreement with Amazon, announced last December, to prepare new audiovisual projects, whether films or series, in the coming years. The famous actor Henry Cavill is involved in this project, who, being a Warhammer fan since he was a child, has signed an agreement to star in, write and produce future Warhammer 40,000 content. These collaborations are being threatened, since Games Workshop has recently announced that Amazon Studios could lose the rights if progress is not made in the development of production plans before December.
Whether this project closes or not, what is clear is that the Warhammer universe is more alive than ever, to the point of being able to become one of the most prestigious companies on the British stock market, if it finally becomes part of the FTSE 100 in the coming months.
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