Games Workshop reported six-month earnings for the period ending November 28th, 2010. As previously announced (see “Games Workshop Sales Down 4%”), overall sales were down 4% with the North American and Northern European sectors responsible for the bulk of the downturn. The company attributed the decline in sales to staffing changes to the Games Workshop Hobby Centres that reduced overheads. Sales in Continental Europe, which implemented similar staffing changes a year earlier, rebounded from 17.7 million pounds in the same period in 2009 to 18.4 million pounds in 2010. North American sales declined from 14.8 million pounds in the second half of 2009 to 13.7 million pounds in 2010, while Northern European sales (which include the U.K.) were down from 18.2 million pounds to 17.0 million pounds.
The effects of the decline in sales were mitigated to some degree by improvements in gross margins, but pre-tax profits were down 15% from 7.9 million pounds to 6.7 million pounds. Earnings per share dropped from 21.5 pence to 15.3 pence. The company opened a net of 16 new Hobby Centres under the new low cost format during the six month period ending November 28th.
While overall sales declined in North America and Northern Europe, sales through independent retailers in those territories actually grew. Meanwhile Games Workshop’s publishing arms Forge World and Black Library performed well, and the six-month report singled out the Warhammer 40K science fiction novels as strong performers.
The most recent period also saw the relocation of the North American sales office to Memphis, which reduced overhead and simplified operations. Tom Kirby, who oversaw the restructuring as head of North American sales, is returning to the U.K. Sandra Casey will take over as head of sales for North America effective March 1st.
Games Workshop has closed its Shanghai facility and consolidated paint and resin operations at its Nottingham factory.
Games Workshop doubled its profits for the fiscal year that ended on May 30th (see “Games Workshop Makes More”), so it should be noted that the performance of the most recent half year was competing with a very strong six-month showing from the previous year.