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Games Workshop scores 10/10; leads UK growth shares higher

January 16, 2023

Games Workshop was the first ever Quentinvest recommendation at 1356p in July 2017. It was a classic 3G with an unbelievable chart, great growth, a great story and a massive ‘something new’ in the form of a new and inspirational management team.

It eventually became hugely overbought and suffered a steep correction as stock markets on both sides of the Atlantic but especially in the US, took a beating. Now the charts look good again. The UK’s FTSE 100 chart looks amazing and I have found an exciting ETF which holds Games Workshop and other exciting shares and is charted below.

Below is the list of 10 largest holdings of FEQD,

There are some exciting names in the list. Look at Novo Nordisk which is up 52.35pc. I wrote about these shares in an alert published 15 December 2022 entitles ‘Signs of Life in Pharma’. I was intrigued to find Jeremy Clarkson writing about them in his column in the Sunday Times. Novo Nordisk is the go-t0 company for diabetes treatments and since diabetes 2 is often a consequence of obesity they have developed an application of the drug to treat obesity. Clarkson is talking it and is very enthusiastic about the results. This is a classic example of a ‘something new’ which could take the shares much higher.

I would be tempted, instead of buying the Novo Nordisk shares to buy shares in FEQD, which gives you exposure to other exciting shares like LVMH and Games Workshop. I was tempted to say that the guys at FEQD are doing well with their picks but this is a passive ETF, which tracks an index so the shares it holds pick themselves. You can see why many investors have concluded that active managers are a waste of time when passive management can deliver these results.

Games Workshop steps up focus on licensing revenue with Amazon deal

I am looking for something new at Games Workshop but more of the same is not to be sniffed at.

We continue to believe there are great opportunities for our business to grow, particularly in North America and Asia, the latter being on a longer timeframe.

To reach them [our customers/ hobbyists], we have two key tools: our retail chain and our digital content. In retail, we showcase the Warhammer hobby and offer a fantastic customer experience. Our digital offering has never been richer. Through and social media we reach thousands of people every day, showing them the very best aspects of the Warhammer hobby and inviting them to join our global community of enthusiastic fans.

Our retail channel is supported by our own online store (it has the full range of our products) and our independent stockist and trade accounts across the world. These independent accounts do a great job supporting our customers in parts of the world where we either have not yet opened one of our stores or where it is not commercially viable for us to have one. Our long-term goal is to have all three channels (retail, trade and online) growing in harmony. We will always have more independent accounts than our own stores. Our strategy is to grow our business through geographic spread, growing all of the three complementary channels.

Annual report, 2021-22, 10 January 2023

They say this but my impression is that the most exciting areas of the business are the independent stores, where other people’s capital is involved and the network can grow more rapidly and the digital income. Licensing income, which is almost pure profit, has exploded since the new t team took charge.

Licensing revenue from royalty income increased in the year by £11.7m to £28.0m. This was largely due to a high level of guarantee income on multi-year contracts signed in the year; this income is recognised in full at the inception of the contract in line with IFRS 15 ‘Revenue from contracts with customers’ following assessment of the performance obligations of the contract. Reported income is split as follows: 83pc PC and console games, 7pc mobile and 10pc other. In the period, guarantee income was £15.0m (2021: £4.3m).

Annual report, 2021-22, 10 January 2023

They have done a deal with Amazon which looks as though it could be interesting.

Amazon Studios today announced that it has secured global rights to Warhammer  40,000, based on the immensely popular intellectual property from Games Workshop (GAW) that has given rise to an immersive global hobby – Warhammer. The agreement encompasses rights to the universe across series, film, and more, and will sit alongside GAW’s activities as they continue to make the best miniatures in the world. This is the first deal of its kind for Amazon Studios for IP of this scale, and it allows the company to utilize the title across its entertainment businesses. Henry Cavill (Man of Steel, Mission: Impossible – Fallout) is set to star in and executive produce the Warhammer 40,000 franchise across all Amazon Studios productions.

Press release, 16 December 2022

I had a look back in time to the annual report for 2012-13. In that year year royalty income from licensing was £1m. Licensing income could be the big ‘something new’ at Games Workshop and the group has hired a dedicated creative director.

Towards the end of the year, I appointed a new creative director, putting IP nous at the heart of our licensing opportunities. Warhammer IP is rich, vast and endless so as we do more projects, it’s important that we are focused on exploiting it all and that its representation continues to be respectfully maintained.

Our strategy is to exploit the value of our IP beyond our core tabletop business, leveraging multiple categories and markets globally. We intend to ensure Warhammer’s place as one of the top fantasy IPs globally.

Annual report, 2021-22, 10 January 2023

Games Workshop is by no mean the only UK growth share looking interesting.


I have picked three from my benchmarks list which have rising Coppock indicators, just turning up from negative levels so early days. The three are Ashtead Group (AHT, 5070p), Liontrust Asset Management (LIO, 1212p) and London Stock Exchange Group Holdings (LSEG, 7484p). The latter two should benefit from strengthening stock markets, Ashtead has been covered in recent issues.

LIO is a class act.

Your Company’s success has been driven by the ability to generate impressive investment performance over the long term, develop excellent client relationships and service, build a powerful brand, provide regular and relevant communications, and ensure a strong infrastructure for the business.

Annual report July 2022

The latest report shows that LSEG remains in good shape.

The key to progress remains a convincing turnaround by global stock markets but prospects for that look good. The media is full of doom and gloom but that is nothing surprising and ideal conditions for the birth of a new bull market. It is common sense. What do stock markets like – improving prospects. This is much more likely to happen when your starting point is deep gloom.

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