Good morning!

(Apologies, but today's article corrupted, so I've had to remove all the graphics to get the text back)

Games Workshop (LON:GAW)

Share price: 504p
No. shares: 32.1m
Market Cap: £161.8m

Trading update - for the year to 31 May 2015. The key sentence says;

"We expect... profit... to be broadly in line with market expectations"

So a bit below then. There seems to be only one broker forecasting for this company, a retailer of bizarre fantasy gaming products, an example of which is below (from their website).

(had to remove picture as it was corrupting the article)

So if you always wondered where the Horned Rat procured its servants, now you know!

The additional commentary today sounds a little negative - mentioning "continued difficult trading" in Continental Europe, and a negative impact from exchange rates.

Valuation - the broker expects EPS of 39.1p for y/e 31 May 2015. The last time I looked at this share was on 8 Dec 2014, where I reckoned it was probably heading for 30-35p EPS. Today's broadly in line statement probably means they're within 10% of broker forecast, so probably 36-38p at a guesstimate.

The shares are currently at 504p, so that's a PER of between 13.3 and 14.0, which looks about right to me, given that the company has a strong, debt-free Balance Sheet.

Dividends - of particular note are the generous divis, although they are only just covered by earnings. The forecast yield for the year recently ended is almost 7%, clearly a very appealing number. Although when a divi yield is stretched on the upside, there is always the risk that it could be cut, and knock the share price down in the process.

My opinion - as you can see from the Stockopedia graphs below, turnover and profits go up and down, but the trend is essentially sideways. So this seems to be a mature business which is holding its own (for now). That's probably not going to attract a premium rating for the shares, so it looks priced about right to me, around the 500p level.

I can see the appeal for income seekers though, from that 7% divi, providing it is maintained.


Share price: 37.6p
No. shares: 355.7m
Market Cap: £133.7m

(at the time of writing I hold a long position in this share)

Interim results to 30…

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