Games Workshop faces sales battle
Fantasy war games retailer Games Workshop today warned full-year profits would fall short of market expectations after weak Christmas sales.
The forecast came after the company, which has 119 stores in the UK, posted revenues of £54.8m (€81.2m) during the six months to November 26 compared to £57.1m (€84.6m) in 2005.
Nottingham, England-based Games Workshop said it was confident the business was returning to growth, but admitted it would not meet its annual profits target.
Analysts had been pinning their hopes on the firm achieving full-year pre-tax profits of around £6m (€8.9m) – one has now forecast around £3.2m (€4.7m).
Chairman and chief executive Tom Kirby said: “The sales trends underlying our first half results have continued for the five weeks to December 31.
“We can now see that our full-year sales, and therefore profits, are likely to fall short of current market expectations.”
Games Workshop said half-year sales in the UK slipped to £17.1m (€25.3m) from £17.4m (€25.8m) during the same period last year, as group pre-tax profits came in at £127,000 (€188,000).
However, the firm said sales in September, October and November bolstered its belief that prospects for the business “remain very good”.
Mr Kirby said: “While our sterling sales for the first half have declined by £2.3m (€3.4m), the sales in September, October and November reinforce our confidence that the business is returning to growth.”
The company said it would continue to open new shops and ramp up its in-store activities, such as introductory gaming and painting lessons.
The latest announcement comes a year after it fired out a profits warning when interest in model versions of Lord of the Rings characters – one of the shop’s mainstays – started to wane following strong sales.
The chain was established more than 30 years ago by gaming enthusiasts from London. It now operates through more than 300 hobby centres and 4,000 toy shops around the world, including in the UK, US, Canada, France and Germany. The majority of models are made in Nottingham and Memphis.
