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Midas last tipped Games Workshop off in the depths of lockdown 2020, when thousands of teenagers discovered that painting armies of orcs was more satisfying than baking banana bread.
So we marveled that this maker of models and playsets had become bigger than Marks & Spencer. Now we can only watch in amazement as it takes its place in the FTSE 100.
What is the secret of Games Workshop? Passion, intellectual property, and sense of community set the company apart from its peers. Its executives, like the players, know that conditions can change with the roll of the dice.
The most recent semi-annual statement last week summed it up: ‘We know from experience that, at Games Workshop, speculation is reckless and extrapolation is a fool’s game.
‘Therefore, we will remain focused on managing the business in all scenarios. So far, so good.’ The company’s stores provide an experience, more than just a retail opportunity, and employ enthusiasts who connect with their customers.
Games Workshop has also kept tight control over its intellectual property, which it is only now licensing, and this could bring it a lot of additional income.
Class Act: A deal with Amazon for potential movies and TV shows based on Games Workshop’s Warhammer series could further drive demand
Midas tipped the stock to £87.80, thinking the pandemic had steered us towards a love of smaller, home-based leisure gatherings, which benefits companies like this. As it happens, the cost of living crisis also encourages this trend, so Games Workshop has continued to prosper.
Meanwhile, a deal with Amazon for potential movies and TV shows based on Games Workshop’s Warhammer series could further drive demand.
Midas Verdict: How far can Games Workshop go? If you bought the shares when we tipped them in 2020, you would make a huge profit. They closed at £142.50 last week and returned a healthy 3.6 per cent.
While there’s a lot to be excited about with the Amazon deal, which could seriously boost the brand’s visibility, there are also orcs on the horizon.
These include national insurance and wage increases, which could affect prices, and the possibility that Amazon’s licensing deal may not deliver the potential hits fans are hoping for.
Games Workshop retains its magic, but every Warhammer player knows that events can sometimes take a dark turn when you don’t expect it.
So if you have a nice profit, take some of it now instead of waiting for the dice to turn against you.
Traded in: Main market Heart: VAG Contact: investor.games-workshop.com
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