MARKET REPORT: Games Workshop, maker of Warhammer battle figurines, drops sharply amid signs it could be facing customer revolt
Games Workshop, the maker of Warhammer battle figurines, dropped sharply amid signs it could be facing a customer revolt.
The FTSE 250 business and stock market darling saw profits boom during the pandemic as fans stuck in lockdown splashed the cash on its miniatures of goblins and orcs.
Since the onset of Covid-19 last March, the stock price has ballooned by over 160 per cent. However, the company is facing the ire of its legions of fans amid plans to clamp down harder on the use of its intellectual property (IP), according to analysts at Jefferies.
Sabre-rattling: Games Workshop is facing the ire of its legions of fans amid plans to clamp down harder on the use of its intellectual property
‘Having spent time trawling through forums and fan sites, it seems there is a fair bit of discontent in the Warhammer fan base at present,’ the broker wrote.
‘The catalyst for this seems to have been a much more aggressive approach to protecting IP, particularly around the creation of fan sites and animation. This change has led to popular fan content creators ceasing their involvement (under pressure from Games Workshop), a lot of negative community feedback, a raft of downvotes to Warhammer video content, and, with other factors also rolled in (price increases, employee pay), calls to boycott the business.’
The impetus for the crackdown appeared to be Warhammer+, Games Workshop’s subscription service that provides access to exclusive Warhammer TV shows as well as figurines and apps unavailable elsewhere.
Jefferies said while the current noise seemed to be from a ‘vocal minority’, they trimmed their target price for the group to 12,250p from 13,200p, saying they would be ‘keeping a close eye’ on the situation.
Investors also seemed unnerved by the sabre-rattling as the shares dropped 7.7 per cent, or 805p, to 9645p. The FTSE 100 slipped 0.16 per cent, or 11.9 points, to 7237.57, while the FTSE 250 tumbled 0.4 per cent, or 93.26 points, to 23106.61.
Some disappointing results from corporations in both the UK and the US took the wind out of the market’s sails. Budget airline Wizz Air lost some altitude, dipping 0.2 per cent, or 9p, to 4621p after it sacked its chief supply officer, Andras Sebok, for secretly trading shares in the group for over a year. He had traded shares around 114 times between April 2019 and November last year without making ‘any notification to the company’. As a result, Wizz said it had terminated Sebok ‘with immediate effect’.
Hilton Food Group, a supplier of fresh food to Tesco (up 0.1 per cent, or 0.3p, to 269.9p), snapped up meat supplier Fairfax Meadow for £23.8m in cash. Hilton take over four meat processing and packing facilities in Derby, Milton Keynes, north London and Southampton. The firm also delivered an update, saying its performance from July 19 to date had been in line with expectations. The shares edged up 0.9 per cent, or 10p, to 1168p. IT firm Computacenter lost 2.3 per cent, or 64p, to 2690p as it said supply shortages were affecting the timing of some of its orders and its inventory levels as it waited for components.
Despite this, the shortages were ‘not as severe as some market predictions’, with trading for the three months to the end of September being ‘marginally above’ the company’s expectations.
Convatec, a maker of bandages, jumped 8 per cent, or 15.9p, to 213.8p in the wake of an upbeat trading update. Revenues for 2021 were expected to grow ‘towards the upper end’ of the group’s expectations of 3.5 per cent to 5 per cent after momentum in its wound care business helped push sales up 3.7 per cent year-on-year to £370m in the three months to September 30.
Miner Hochschild received an upgrade from UBS analysts who upped their rating to ‘buy’ from ‘neutral’ but trimmed their target price to 200p from 220p, saying the company was ‘attractive’ due to its ‘undemanding valuation’ by the market. Shares still tumbled 3.8 per cent, or 5.7p, to 142.6p.