Games Workshop declares another dividend reward after continued strong trading

Shareholders in Games Workshop are set for yet more good fortune after the miniature wargame manufacturer announced a new dividend payment.

The Warhammer 40,000 creator revealed that it would hand out a 70p per share dividend in three weeks’ time in accordance with its policy to return surplus cash.

It means the group has declared dividends of £2.35 per share so far this financial year, a 50p increase on the equivalent period in 2021 when it was benefitting from a lockdown-induced boom in tabletop gaming.

Peel Hunt analysts Charles Hall and Andrew Ford noted that this was ‘well ahead’ of their forecast of 215p per share and have maintained their buy recommendation for the firm.

They added: ‘The company returns ‘truly surplus cash’ to shareholders so, unlike most companies, dividends are a true reflection of cash flow, which is largely driven by profit performance.’

Games Workshop also disclosed today that trading in the three months to the end of February was in line with forecasts, reflecting a continued boom in orders even as coronavirus regulations have loosened across the world.

Back in January, the Nottingham-based business revealed first-half revenue grew by £12.2million on a constant currency basis to nearly £200million following another record period of sales.

It achieved a significant jump in retail purchases and licensing income that more than compensated for the 10 per cent decline in online demand.

The group noted that there had been strong interest in the third edition of the Warhammer Age of Sigmar, which launched in June 2021, a new version of miniature game spin-off Kill Team and its ‘Imperium’ part-work collection.

Except for Australia, where very onerous Covid-19 restrictions have kept its stores closed most of the time, the firm said trade was healthy across most territories, with the UK, Europe and North America providing the bulk of sales. 

Alongside this, it posted a pre-tax profit of £88.2million, a slight decline on the same period last year due to increasing salaries for staff, higher costs from freight and raw materials supplies, and an expansion of its warehouse operations. 

But although Games Workshop’s earnings took a hit from supply chain disruptions, Gemma Boothroyd, analyst at retail investor platform Freetrade, said the firm was well-positioned to respond to such problems. 

‘Because Games Workshop manages the start-to-finish process to get these products to consumers, it might be better able to pivot and react. That might mean cutting costs in other steps of production or outright prioritising more profitable product streams instead.

‘Games Workshop responded to its supply chain kerfuffles by increasing its focus on digital products, securing a computer game licensing deal with Nexon Co. 

‘By selling the games remotely, the firm can circumnavigate hiccups from producing and distributing clunky physical products instead.’   

Games Workshop shares closed trading 3.3 per cent up at £73.55 on Thursday. However, their value has fallen by over a quarter since the year began.