Games Workshop increased to 3.5% of JIC Portfolio

Games Workshop; (GAW.L, FTSE Mid 250, Market Cap £1206m, 3712p, 3.5% of JIC Portfolio and 0.0 of JIC Top 10)

Increased position to 3.5% of JIC Portfolio

Following Friday’s trading update I have this morning increased the position tom3.5% of the JIC Portfolio.

To recap, it said: ‚ÄúFollowing on from the Group’s half year report in January, trading to 7 April 2019 has continued well.¬†¬†Compared to the same period in the prior year, sales and profits are ahead.¬†Royalties receivable are also ahead of the prior year following the signing of new licence agreements.¬†¬†The Board’s current expectation is that profit before tax for the year ending 2 June 2019 will be c. ¬£80 million.‚ÄĚ

‚ÄúThe Group also announces that the Board has today declared a dividend of 35 pence per share, in line with the Company’s policy of distributing truly surplus cash.¬†¬†This will be paid on 31 May 2019 for shareholders on the register at 26 April 2019, with an ex-dividend date of 25 April 2019.¬†The last date for elections for the dividend re-investment plan is 10 May 2019. This dividend will take the total dividend declared and paid during the year ending 2 June 2019 to ¬£1.55 per share.‚ÄĚ

Before, Friday’s statement expectations were that it would pay a dividend of 120p for the year ending 2ndJune, flat on last year. Expectations were also for a small drop in earnings per share but now look as though they will increase by around 10.0%. With earnings per share of around 200p that puts the shares on a PE ratio of 18.5x for the current year and even after Fridays increase in the share price, a prospective dividend yield of 4.0%. What the dividend increase reminds one about the company is the tremendous cash generation of the company and its quality. By quality, I mean its high margins, high return on capital and cash generation which enables it to invest in increasing capacity as well as pay generous dividends. Happy to add even after Friday’s rise.

I bought 48 shares at 3709p per share

Click on JIC Portfolio tab above to see updated portfolio and transaction details

Screenshot 2019-04-15 at 08.22.08