The 800-pound gorilla of the miniatures market has multiplied its sales in the last few years. For the first time since probably 2018, they have spare production capacity. Can they fill it?
I have known the pace of releases has notched up since Kev took over in 2015 but thanks for putting flesh on the bones regarding quality and range of stories and miniatures. The data on the Reddit subscribers was also illuminating. I have previously looked other quantitative measures such as importYeti to gather a clue as to the ongoing popularity.
Finally what makes this such a compelling investment iso far has been the low levels of incremental capital GW has needed to grow. More people and a few more injection moulding machines (currently around 50 iirc). As long as this dynamic doesn’t change then the business has a bright future.
And yes, cash conversion has always been fantastic (and looks like it will keep being so) partly because of the very limited need for capital investments. Around 50 injection moulding machines sounds right, but their disclosures regarding that had been irregular (for example, in one report they might say they were going to add X, on another that the absolut number was Y, and in other that they had doubled capacity from an unknown base). I don't think their capital investment needs change, but they have always been very prudent (maybe too much) when adding capacity. And while it is cheap, it is not fast (hiring, training, and logistics capabilities have to go with it too).
But IMHO the most important thing is sales drivers, the rest of it will follow, even if it is with a bit of delay!
Really interesting post.
I have known the pace of releases has notched up since Kev took over in 2015 but thanks for putting flesh on the bones regarding quality and range of stories and miniatures. The data on the Reddit subscribers was also illuminating. I have previously looked other quantitative measures such as importYeti to gather a clue as to the ongoing popularity.
Finally what makes this such a compelling investment iso far has been the low levels of incremental capital GW has needed to grow. More people and a few more injection moulding machines (currently around 50 iirc). As long as this dynamic doesn’t change then the business has a bright future.
Hi Simon!
Thank you for your comment
I wrote on ImportYeti use in the past (only in the wayback machine, thanks to Musk killing Revue https://web.archive.org/web/20210509203523/https://www.getrevue.co/profile/trampasalpoker/issues/games-workshop-avoiding-the-perils-of-the-warp-602989) so I didn't want to repeat on it. But take the numbers with a grain of salt, there were duplicates in shipments, at least in 2021, that made the data not entirely reliable.
And yes, cash conversion has always been fantastic (and looks like it will keep being so) partly because of the very limited need for capital investments. Around 50 injection moulding machines sounds right, but their disclosures regarding that had been irregular (for example, in one report they might say they were going to add X, on another that the absolut number was Y, and in other that they had doubled capacity from an unknown base). I don't think their capital investment needs change, but they have always been very prudent (maybe too much) when adding capacity. And while it is cheap, it is not fast (hiring, training, and logistics capabilities have to go with it too).
But IMHO the most important thing is sales drivers, the rest of it will follow, even if it is with a bit of delay!
I totally agree re ImportYeti data, however like all of the data points it’s probably precisely wrong but directionally correct.
Happy to buy you lunch to discuss GAW and other gaming topics if you are ever in London