The UK’s blue-chip share index could be about to be invaded by Space Marines, Weirdboyz and Chaos Knights.
Games Workshop, the UK maker of miniature wargames, is on track to be promoted to the FTSE 100 when the next quarterly reshuffle is calculated later this week, taking its place among the 100 most valuable companies listed in London.
The company is valued at £4.6bn – enough to merit a place in the FTSE, on current prices – nearly 50 years after it was founded in London.
The continued success of its science-fiction fantasy miniature war franchise, Warhammer, lucrative new licencing deals, and a pick-up of interest during the Covid-19 lockdowns, have helped Games Workshop beat forecasts for revenue and profits in recent years, pushing its value steadily higher.
Based on the latest market values, Games Workshop – along with investment trust Alliance Witan and financial adviser St James’s Place – are set to be lifted up from the smaller FTSE 250 index in the next quarterly reshuffle. Housebuilder Vistry, and retailers Frasers Group and B&M, are tipped to drop out to make way.
Since the start of 2024, Games Workshop’s shares have risen by 43%. They have more than quadrupled since the start of 2019, when the company was worth £1bn. Games Workshop was created in 1975 in friends John Peake, Ian Livingstone and Steve Jackson as a UK-based mail-order business importing popular fantasy roleplaying and board games, before branching into developing metal miniatures and also distributing and publishing Dungeons & Dragons in Europe.
The first Games Workshop store opened in Hammersmith in 1978. The company’s financial success is built on its army of enthusiasts who play tabletop conflict games using its collectible armies, usually hand-painted – as collecting, assembling and painting the small figurines is a large part of the fun.
Those troops are not cheap: a pack of 10 mounted Chaos Knights sets you back £52.50, while the “ultimate starter set” for its Age of Sigmar game costs £130. That pricing explains why Games Workshop was nicknamed “heroin for middle-class nerds” in the Guardian five years ago.
Games Workshop impressed the City last month by reporting that trading was, again, ahead of expectations. Pre-tax profits were expected to rise by 25% for the last six months to at least £120m, while licensing revenue is expected to more than double to £30m or more.
“The strong growth in licensing has a significant effect on profitability as it is a very profitable revenue stream,” said Russell Pointon, director of consumer at Edison Group. He said the launch of the fourth edition of Age of Sigmar was also lifting revenues.
Games Workshop has also agreed a deal with Amazon to create a series based on Warhammer.
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Susannah Streeter, the head of money and markets at Hargreaves Lansdown, said Games Workshop had a strong financial position, and a deep well of accessible cash.
She said: “Games Workshop is a one-stop shop when it comes to tabletop miniature gaming and its prowess at the full sweep of production design, manufacturing, distribution and retail has made it a global leader. Its top hit, Warhammer 40,000, has had a big year, with the 10th edition launched, which drove record revenue, helped by its video game licensing. This push into licensing is a big part of the company’s future growth strategy, with potential forged with Amazon to develop the game into films or series.”
It has been a less happy time for the companies set to leave the FTSE 100, however. Vistry has issued two profit warnings in recent months after discoving it had understated the build cost of some of its projects.
Frasers is pushing to integrate more luxury names into its offering, at a time when consumer confidence has weakened, and has also struggled to take control of Boohoo and Mulberry.
Investors had also been rattled by falling like-for-like sales at B&M European Value Retail, Streeter said.
The reshuffle will be decided by index operator FTSE Russell, based on the share prices at the close of trading on Tuesday, and will be announced on Wednesday evening.
