Games Workshop Annual Report

I spent some time this morning looking through the Games Workshop Annual Report.  Now, I do not profess to be an accountant or business guru.  I can simply read and make inferences.  I'd like to jot down a few of the things that jumped out for me upon a first read of the report.

Sales and Profits are Down

Total sales for GW were down nearly 3% from last year.  Most notable were Australia (down 11.8%), UK (down 6.3%) and North America (down 4.8%).  It appears that the rage quit in Australia has really taken its toll on GW sales in that continent.  I'm sure the massive sales that were being done by UK online retailers did not help their numbers down under either.  We may be looking at one of the main reasons for GW changing its terms of trade for UK online retailers.  I speculate that a combination of competition and the poor economic climate in North America (especially the US) led to those sales drops.

GW is still profitable.  Through cost cutting and streamlining their business GW profits only slipped slightly.  GW still made a pre-tax profit of 15.4 million pounds (just over $25 million USD).  GW is not a huge operation by any means.

Focus on Hobby Centres

A large part of the CEO's Commentary focused on Hobby Centres.  GW has introduced systems and programs to improve manager recruitment and performance at their Hobby Centres around the world.  GW wants to make the Hobby Centres the place where they grow their business.  The CEO states that most people find out about the hobby through word of mouth and they want to push the process with their Hobby Centres. Customer service is also a push for all Hobby Centres.

Oh, and GW has discovered Facebook.  All Hobby Centres will get their own Facebook page so they can better communicate with the local gaming community regarding events, etc.  Better late than never I guess.

Finecast

Finecast was a big move for the company.  The CEO's Report contained nearly a full page on Finecast.  GW felt that with metal, "the optimum level of quality with that material has now been achieved."  So, a combination of higher quality (in detail and sculpts), the inexorable rise in commodity prices, and their experiences with Forge World, led to the change to Finecast.  The process was two years in the making.  GW claims a 97% quality rate in the changeover.  I have no idea what standard they were using to measure "quality".  

In short, this was a major initiative for the company and consumed major resources.

Warhammer Fantasy

The previous edition of Warhammer was under performing in sales, especially compared to 40K.  GW was not getting a good enough return on the investment in product development in the Fantasy system.  This may explain the slow pace of army book releases and new miniatures during 7th.  Fantasy wasn't paying its way!  The launch of 8th edition was meant to redress the balance between 40K and Fantasy.  The CEO states that GW will "continue their support for this revitalised game system".

Well, that's what I noticed.  Let's face it, a teacher on summer vacation has too much time on his hands.