Wednesday, 27 July 2011

Holding GW to Account

GW have published their results.

And predictably the interwebz have gone crazy.

For instance, the 'community' bette noir Austalia has seen an 11.8% fall in sales.

Which looks bad until you look at the figures and see that this is a drop from £10,795,000 to £10,630,000, a fall of £165,000. Well OK, maybe it is worrying as this converts to an operating loss of £406,000.

At which point it suddenly becomes clear why the company acted to stop the online shippers. Of course those going crazy on the internet will not accept that. Nor will they notice that the business costs in Australia have risen.

However GW have clearly increased profits in the territory because the costs have increased @£500,000 and the sales have fallen £165,000 but the operating loss is only $406,000.

Cynics will point to the inflated prices in Australia as the reason for the increased profits.

Yet from a business stand point when a region has half the costs and a third of the income of other regions, then it is a sound business decision to set pricing accordingly. No matter how longingly Aussie gamers gaze at UK online prices.

What is clear from the accounts is that GW is not in a position to alter it's pricing, as the interwebz economists would have it as the first step to recovery, because the actual profit is still fairly marginal.

Clearly the city was happy with the results, as the share price rose yesterday on publication, and rose a further 20 points today.

No doubt there are those that would claim ignorance on the part of the investors and spivs on such matters as Finescast, the embargo, a couple of the scenarios for the 'Ard Boyz qualifiers, but given the economic climate in which energy prices and inflation generally is rising at double digit rates - despite the official inflation rate - and wage rises have been generally static, for a company in a niche market (with an image problem) then these figures are not bad.

Of course it remains to be seen how the nerdrage over Finecast et al, plays out in the coming year. But it is equally possible that the rolling out of new 8th ed Army Books, the move to focus more on miniatures, and reviewing the back catalogue may well mena that the clearing out of the deadwood of nerdrage quitters balances out the effects of the recent changes.


btw - the 11% figure is what is being quoted by the interwebz.... yeah I know....

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