Games Workshop – GAW – Dividend and Trading Update

Yesterday morning (24th of March 2022) games workshop share price rose around 11% at the peak. This was on a very brief trading update, that told the market the company had been trading in line with expectations. Despite the wider headwinds in the market. The company also told the market that they would be paying a dividend of 70 pence per share with the ex-dividend date being the 31st of March.

I personally bought into games workshop on the 8th of March this year, after having watched the company for a long time. It is a very difficult company to find a good entry price at, as there is so much demand for its shares and it has such a unique and dominating business model. What most people, myself included, like about Games Workshop is that it fits Warren Buffett’s criteria for investing.

Its core business model has a very loyal fanbase, with deep pockets, and very strong pricing power. Something that cannot be overstated heading into a period of record-high inflation. The business operates on a very high (40% net) margin and only pays a dividend based on surplus cash. Although this may mean its dividend is not increased every year, it does mean when they do pay dividends you know they can afford it. It also means if free cash flow increases significantly, they have the option and ability to pay significantly higher dividends in the years to come. It would not shock me if 20 years from now this company was worth 1000 pounds a share and is paying a handsome dividend.

If the business is able to create IP to the level of marvel all similar this share could be a very good runner in the coming months.

I bought 32 shares on 11 March, and 33 shares on the above update. Currently, I hold 65 shares and will look to acquire more. I expect this to be a money tree that will continue to grow.