Games Workshop reports a dip in profits despite record-breaking sales
Games Workshop has reported a rise in sales and engagement after a strong interest in its Warhammer game.
However, profits dropped in the six months to November 28, 2021 as costs increased.
The gaming retailer is planning a £6m upgrade to its web store after a half-year in which online sales fell by 10%. The retailer wants to ensure its Warhammer game products are better available to customers, while investing in support functions to boost on time deliveries. It also says that global disruptions have affected its operations in ways that may persist for several months.
The retailer reported revenue of £191.5m in the six months to November 28 2021, up 2.5% from £186.8m a year earlier. Pre-tax profits of £88.2m were 3.7% down from £91.6m last time, as the cost of distribution, staffing and wages increased, while foreign exchange movement also hit the bottom line.
Trade sales continue to be the largest part of the Games Workshop business, with sales of £108.1m up 3.9% from £104m last time, followed by retail sales (+13.5% to £41.9m) and online (-9.6% to £41.5m).
More than 20% of Games Workshop sales take place online through its own website, while shoppers also buy its goods online from the independent retailers that it supplies.
Games Workshop chief executive Kevin Rountree says: “We have proven once again that the Warhammer hobby creates exciting experiences and allows people around the world to come together and have some fun. We continue to focus on making the best miniatures in the world and to document and deliver an exciting operational plan.”
The retailer said that post-Brexit trade rules cost it an extra £2 million in shipping and freight costs in the half-year, compared to the previous year.
Warehousing costs grew by £2.8 million to £9.7 million as it put new technology into both its North America and East Midland Gate sites.
During the half-year, the retailer closed eight shops and opened four, taking it to a total of 519, of which 34 are not profitable.
The retailer says that some stores, including its Warhammer World shop at its Nottingham headquarters, are now trading at pre-Covid levels.
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