Games Workshop Plans Fourth UK Factory Amid Sales Surge

Games Workshop Plans Fourth UK Factory Amid Sales Surge.

The company experiences significant growth as Amazon embarks on the production of television series, resulting in increased licensing revenue from video games.

In Nottingham, a legion of diminutive warriors is advancing. Space Marines, Weirdboyz, Chaos Knights, and notably small paint pots are expanding their reach as Games Workshop announces the establishment of its fourth factory and acquires land for two additional facilities to satisfy the rising demand for its fantasy miniatures.

This development marks another achievement for the designer and manufacturer of miniature wargames, including the popular Warhammer franchise, which recently joined the FTSE 100, the list of the UK’s foremost companies, shortly before the Christmas season. Over the past four years, its valuation has surged more than threefold, now exceeding £4.2 billion, surpassing the worth of EasyJet, British Land, and Kingfisher, the owner of B&Q.

Founded 50 years ago by three school friends, Games Workshop experienced a surge during the pandemic and continues to prosper as hobbies and small indulgences that can be enjoyed at home have gained popularity amid the cost of living crisis.

Additionally, the company has capitalized on lucrative licensing agreements, including a recent partnership with Amazon to adapt its Warhammer 40,000 brand into films and television series, alongside a substantial increase in licensing revenue from the release of the Warhammer 40,000: Space Marine 2 and Speed Freeks video games.

Games Workshop announced an increase in manufacturing capacity following a report on Tuesday indicating a 20.9% increase in sales, reaching £299.5 million for the six months ending 1 December. During this period, profits surged by one-third to £127 million.

The company acknowledged challenges in maintaining adequate stock levels for certain products. To address this, it plans to establish a new facility at Easter Park by July, aimed at enhancing production of the paint utilized by its enthusiasts for customizing their models.

Additionally, Games Workshop has obtained planning approval for a fourth factory at its Nottingham headquarters, which is projected to be completed by summer 2026, along with another site nearby for future growth.

Kevin Rountree, the chief executive, said: “It’s fair to say our results were helped by some of the excitement around media and licensing product launches. I’m told by my retail team that we had more people coming into our Warhammer stores in the period. This gave our ambassadors a great opportunity to pass on their love for the Warhammer hobby. They clearly didn’t disappoint.”

According to Kevin, the group has welcomed “new customers, far and wide, to what we think is the best hobby in the world” with new editions of its Age of Sigmar and Warhammer 40,000: Kill Team games.

Games Workshop originated as a mail-order enterprise that specialized in importing popular fantasy role-playing and board games. It subsequently expanded into the production of metal miniatures and took on the distribution and publication of the Dungeons & Dragons game across Europe.

The inaugural Games Workshop retail outlet was established in Hammersmith in 1978. The company's financial prosperity is largely attributed to its dedicated community of enthusiasts who engage in tabletop conflict games, utilizing collectible armies that are often hand-painted. The activities of collecting, assembling, and painting these figurines constitute a significant aspect of the hobby.

On Tuesday, the company announced a £50 million dividend, bringing its total distributions for the financial year to over £100 million. Additionally, staff received an £8 million share of profits for the half-year period, an increase from £7.5 million the previous year.

According to Adam Vettese, market analyst at eToro: “Games Workshop’s Warhammer series seems to be the golden goose that keeps laying eggs after reporting their best half-year performance to date.

“Warhammer is more popular than ever and especially now with multiple revenue streams to exploit its popularity, making hay while the sun shines seems to be what the firm is doing.”

However, Rountree has reiterated that the business cannot let the success go to its head: “Our business culture is built on a few important values. Key among them is humility. So, while we are very proud of our achievements, we remain grounded, pragmatic and ego free. We know through experience that, at Games Workshop, speculation is unwise and extrapolation is a fool’s game. We will therefore continue to stay focused on managing the business under all scenarios.”

Games Workshop’s impressive growth highlights its strong market position and increasing global popularity. With new factories on the horizon, the company is well-equipped to meet the rising demand for its iconic miniatures. Expanding production capacity, including a focus on paint manufacturing, will ensure the company continues to deliver high-quality products to its loyal fanbase.

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The recent surge in sales, alongside profitable licensing agreements, underscores the company’s resilience and ability to adapt in an evolving market. Games Workshop’s commitment to fostering a passionate community and its ongoing success makes it an exciting brand to watch in the years ahead.