Annual report 2023
FINANCIAL HIGHLIGHTS
2023
£m
2022
£m
Core revenue
Licensing revenue
Revenue
Revenue at constant currency
Core operating profit
Core operating profit at constant currency
Licensing operating profit
Licensing operating profit at constant currency
Operating profit
Profit before taxation
Net increase in cash - pre-dividends paid
Earnings per share
Dividends per share declared in the period
Dividends per share paid in the period
445.4
25.4
470.8
447.3
148.2
131.9
22.0
19.9
170.2
170.6
155.5
409.7p
415p
415p
386.8
28.0
414.8
414.8
131.7
131.7
25.4
25.4
157.1
156.5
79.3
391.3p
235p
285p
See the glossary on page 82 for details on the alternative performance measures (APMs) used by the Group. Where appropriate, a reconciliation between
an APM and its closest statutory equivalent is provided.
CONTENTS
Chair’s statement
Strategic report
Directors’ report
Corporate governance report
Audit and risk committee report
Remuneration report
Directors’ responsibilities statement
Company directors and advisers
Independent auditor’s report
Consolidated income statement
Consolidated statement of comprehensive income
Balance sheets
Consolidated and Company statements of changes in total equity
Consolidated and Company cash flow statements
Notes to the financial statements
Five year summary
Financial calendar
Glossary
2
3
16
28
33
36
47
48
49
55
55
56
57
58
59
81
81
82
1 Games Workshop Group PLC
CHAIR’S STATEMENT
Games Workshop is a great company - so it is an absolute privilege to be writing my first statement as non-executive chair, having been
appointed to the role in January 2023.
The reason Games Workshop is great is that it is run with principles and has a culture and values which, when applied by good people who
align to these principles and behaviours, can deliver great performance.
This formula is clearly working as I’m delighted to report that Kevin Rountree and his team have delivered another outstanding year with
core revenue and profits, and dividends all at record levels.
We continue to choose not to hedge against currency fluctuations, measuring our performance and reporting against both constant
currency and actual exchange rates. This year, the exchange rates proved beneficial and helped balance other inflationary pressures
beyond our control. Significantly, the skill and application of Kevin and his teams meant the core business finished the year ahead of last
year at both actual and constant currency.
These financial outcomes are crucial for the long-term success of the Company, enabling staff to be paid and rewarded, products and
intellectual property to be created, suppliers and taxes to be paid, investments to be made and expansion funded while delivering a return
to our shareholders - all without resorting to debt.
Understandably, society and investors have come to expect more from companies to reflect their responsibilities beyond profit. Our
response to this is to take a straightforward approach based on doing the right thing, so that we can succeed forever. Our decisions are
based on long-term success not short-term gains.
Culturally, ‘doing the right thing’ does not allow us to simply say the right thing. We are reluctant to promise what we can’t deliver. This
should not be mistaken for a lack of commitment and we are developing the Company’s investor relations website to better articulate our
position and give more visibility to some of the good work we are doing.
Not everything has gone entirely to plan and we have made some mistakes including a technical failure to file interim accounts proving we
had sufficient reserves (which we did) prior to paying one of the dividend payments in November 2022. While embarrassing,
acknowledgement of mistakes drives us to do better.
Mark Lam joined us in April as a non-executive director and took over from me as senior independent director. We welcome Mark who
brings a range of technical skills and perspectives which will certainly enhance our board.
I would like to thank:
• Our executive directors and the whole Games Workshop team for achieving so much success this year, continuing to beat their
own records, year after year;
• Our amazing and loyal customers for engaging with and investing in our fantastic products and intellectual property;
• Our shareholders for their ongoing support - we look forward to seeing you at the AGM on the 20 September 2023.
John Brewis
Non-executive chair
24 July 2023
2 Games Workshop Group PLC
STRATEGIC REPORT
Strategy and objectives
Games Workshop is committed to the continuous development of our intellectual property (‘IP’) and making the Warhammer hobby and
our business ever better.
Our ambitions remain clear: to make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our
products globally at a profit. We intend to do this forever. Our decisions are focused on long-term success, not short-term gains.
Let me go through our strategy part-by-part:
The first element is that we make high quality miniatures. We understand that what we make may not appeal to everyone, so to recruit
and retain customers we are absolutely focused on making our models the best in the world. In order to continue to do that forever and to
deliver a decent return to our owners, we sell our miniatures for a price that we believe represents the investment in their quality.
The second element is that we make fantasy miniatures based in our endless, imaginary worlds. This gives us control over the imagery and
styles we use, and ownership of the IP. Aside from our core business, we are constantly looking to grow our licensing income from
opportunities to use our IP in other markets.
The third element is that we are customer focused. We aim to communicate in an open, fun way. Whoever and wherever our customers
are, and in whichever way they want to engage with Warhammer, we will do our utmost to support them.
The fourth element is the global nature of our business. Our customers can be found anywhere, and we seek them out all over the world.
They’re a passionate bunch with an interest in science fiction and fantasy. They’re collectors, painters, model builders, gamers, book lovers
and much more. And while no two customers engage with Warhammer in exactly the same way, they’re all deeply invested in the rich
characters and settings of our IP.
To reach them, 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 warhammer-community.com 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.
The fifth element is being focused on cash. By delivering a good cash return every year we can continue to innovate, surprise and delight
our loyal existing customers and new customers with great products. To be around forever we also need to invest in both long-term capital
and short-term maintenance projects every year, pay our staff what they have earned for the value they contribute and deliver surplus
cash to our shareholders. Our dedication and focus should ensure we deliver on time and within our agreed cash limits.
We measure our long-term success by seeking a high return on investment. In the short term, we measure our success on our ability to
grow sales whilst maintaining our core operating profit margin at current levels. The way we go about implementing this strategy is to
recruit the best staff we can. We look for those with the appropriate attitude and behaviour a given job requires and for those who are
aligned with our principles and who are quality obsessed. It is also important that everyone we employ has a real desire to learn the skills
needed to do their job and has a great attitude towards change. To support them, we offer all of our staff both personal development and
skills training.
Our brands
We have originated and are in control of a number of strong, globally recognised brands with their own identities, associations and logos.
Our key consumer facing brand is ‘Warhammer’ - this unites all aspects of the Warhammer hobby - collecting, building, painting, playing,
reading, watching, gaming, etc. in the worlds of Warhammer.
We have two main universes/settings - our dark, gritty fantasy sci-fi universe, which encompasses ‘Warhammer 40,000’, ‘Warhammer The
Horus Heresy’ and ‘Necromunda’, and our unique fantasy setting that includes ‘Warhammer Age of Sigmar’, ‘Blood Bowl’ (albeit a tongue
in cheek parody) and, the soon to be released, ‘Warhammer The Old World’. We believe our IP to be among the best in the world.
We continue to add to the depth of these worlds with an ever evolving range of miniatures that we hope will keep hobbyists engaged and
excited for a lifetime.
3 Games Workshop Group PLC
STRATEGIC REPORT continued
Strategy and objectives continued
Our brands continued
The Warhammer settings are incredibly rich and evocative backdrops. They’re populated by more than three decades of fantastical
characters and comprise thousands of exciting narratives. We are committed to making it easier than ever for people to discover, engage
with and immerse themselves in our IP. Aided by a small, senior team we have already begun to find new partners, and new ways to help
us bring the worlds of Warhammer to life like never before. Together, we’ll continue to explore animation, live action, video games and
more. We’ll present the very best aspects of our rich IP, delighting audiences while always ensuring we do no harm to our core miniatures
business.
Business model and structure
We are a vertically integrated business. We design, manufacture, distribute and sell our fantasy miniatures and related products. These are
fantasy miniatures from our own Warhammer 40,000 and Warhammer Age of Sigmar universes. We are an international business centrally
run from our HQ in Nottingham, with 78% of our sales coming from outside the UK. We have our two main factories, a paint factory, two
warehouse facilities, design studios and back office support functions - all are based in or near Nottingham.
Design
We design all of our products at our HQ in Nottingham. Employing c.300 people, the design studio creates all the IP and all the associated
miniatures, artwork, games and publications that we sell. Annually, these specialist staff produce hundreds of new sculpts, illustrations,
rules, stories etc. enabling us to deliver new products every week and continue to keep our customers engaged and excited. In 2022/23 we
invested £17.3 million in the studio (including software costs) with a further £6.7 million spent on tooling, the majority of which was for
new plastic miniatures. We are committed to investing in these areas at an appropriate level every year.
All of our plastic miniatures are branded as Citadel Miniatures, a mark with an unparalleled reputation for quality. It denotes both a style
and level of detail that we apply to both our own worlds (Warhammer 40,000, Warhammer Age of Sigmar etc.) and those of others, e.g.
Lord of the Rings. Our resin miniatures, designed for more experienced customers, are branded as Forge World and are less widely
available than their plastic counterparts.
Many customers love personalising their miniatures and our Citadel Colour paint range, brushes and accompanying painting system are
designed to help everyone from the complete beginner to the most experienced painters in the world achieve great results. In the pursuit
of ever better, we continually develop new types of paint and ways of using them. The result - our paints are used the world over. And for
painting more than just our miniatures.
When not interacting with our miniatures, many customers enjoy reading stories set in our rich and immersive worlds. Under our Black
Library imprint we publish new titles every year, from short stories and audio dramas through to full length novels and audio books. These
we make available in physical bookstores, third party digital platforms and through our own retail and other specialist stores.
Manufacture
We are proud to manufacture our product in Nottingham which is the centre of expertise for our global business. It’s where we started and
where we intend to stay.
Logistics
Our product is distributed from our main warehouse at our HQ (Eurohub) or our warehouse (EMG) approximately 25 minutes away. These
warehouses supply our two hubs; one in Memphis, Tennessee and one in Sydney, Australia. Between these four warehouses, we are able
to directly supply our independent retailers, our own retail stores and fulfil our online orders.
Sell
Our core revenue is generated via three channels, our own stores ‘Retail’, third party independent retailers ‘Trade’ and our online store
‘Online’. We also sell via our licensing partners. We support these channels and activities via our digital and marketing team.
Retail - our stores provide the focus for the Warhammer hobby in their geographical areas. Our stores only stock Games Workshop
product. They are where we recruit the majority of our new customers. To do so, the stores don’t offer the full range of our product, only
starter sets, new release products and the appropriate extended range. At the period end, we had 526 of our own retail stores in 23
countries. We have 399 single staff stores: small sites, each one operated by only one store manager. We also have 127 multi-staff stores,
which, like our single staff stores, are constantly reviewed to ensure they remain profitable. If not, they will probably be converted to single
staff stores.
Trade - we sell to third party retailers under closely controlled terms and conditions. Independent retailers are an integral part of our
business model helping us to sell our products around the world and importantly in areas where we don’t have our own stores. Games
Workshop strives to support those outlets which help to build the Warhammer hobby community in their local areas. The bulk of our sales
to independent retailers are made via our telesales teams based in Memphis, Nottingham and Barcelona. We also have small telesales
teams in Sydney, Tokyo, Shanghai, Singapore, Hong Kong and Kuala Lumpur. In 2022/23 we had 6,500 independent retailers (2022: 6,200)
in 71 countries. We strive to deliver excellent service, operating in 20 languages covering all time zones. Independent retailers sell from
their physical stores as well as their own online web stores.
4 Games Workshop Group PLC
Business model and structure continued
Sell continued
Online - sales via our own web stores. All of our retail stores also have a web store terminal that allows our customers to access the full
range from within the store. Our web stores are run centrally from our HQ.
Licensing - we grant licences to a number of carefully chosen partners. This allows us to exploit our IP to broaden the presence and brand
exposure of Warhammer around the world, often entering new markets such as media and entertainment. It also allows us to generate
additional income. Currently, the majority of this income is generated by video games sales in North America, the UK and Continental
Europe.
Marketing - keep us customer focused. This team acts as the bridge between our other business areas, ensuring we have a joined up
approach between product (design to manufacture) and sales. Marketing spend a lot of time listening and developing a two way dialogue
with our customers to make sure we keep their needs at the forefront, championing the Warhammer hobby around the globe and injecting
our content and communications with a real sense of passion and fun.
Structure
We control the business centrally from our HQ in Nottingham; it is where the majority of people with experience and knowledge of running
our business work. I have put in place a flat structure: the people with senior responsibility, that make all of the big decisions, report
directly to me. There were a few changes during the year to help us deliver our operational plans.
I implemented a new structure during the year which is split into two main teams: an operational board team and a senior management
team. The operational board members are: the chief financial officer, a global IP and product design director, a global business to business
(B2B) sales and marketing director, a global manufacturing and supply chain director, and a creative media director. I represent our own
sales channels at the regular reviews.
Our global IP and product design director is responsible for our Warhammer design studios (miniatures, books and box games, specialist
systems, hobby product, our publishing business - Black Library, and creative approvals for third party licences). They ensure any content
that is produced, whether physical or virtual, truly represents our IP. They also support me in exploiting our IP, alongside our creative
media director.
The responsibility for our trade sales is with our global B2B sales and marketing director who also manages the marketing team for all sales
channels.
Reporting directly to me, our retail chain is split between two retail territory managers, one for North America and Asia and one for the
rest of the world. Our online store (our biggest store) is the responsibility of our rest of the world retail manager, who also manages our
biggest physical store, Warhammer World.
The global manufacturing and supply chain director manages the three factories in Nottingham and our four main warehouse facilities in
Nottingham, Memphis and Sydney as well as a merchandising team to support the sales channels.
Our operations and support structure includes the chief financial officer for Games Workshop who is responsible for accounts, HR, legal
and compliance, and IT. They also support me in exploiting our IP by managing the licensing team.
The senior management team comprises the members of the operational board together with our global head of IT, two retail territory
heads, our Group company secretary/general counsel, two HR managers (covering support and advisory, and recruitment and
development). In addition, my executive assistant helps me by running a team who support the day to day running of the teams above.
Key performance indicators
The boards and management team use a number of key performance indicators to provide a consistent method of analysing performance,
in addition to allowing the boards to benchmark performance against our forecast. The key performance indicators utilised by the boards
can be split into key financial performance indicators and key non-financial performance indicators.
Our key financial performance indicators are:
Monthly and year to date core business sales growth by channel
This measures the core business sales growth achieved in each of our core channels on a monthly and year to date basis: see page 9.
Monthly and year to date core gross margin
This measures the core gross margin achieved on core sales after taking account of the direct costs, depreciation of manufacturing
equipment and the costs of shipping our product to customers/stores on a monthly and year to date basis: see page 11.
Year to date core operating profit percentage
The ratio of core operating profit against core revenue, as a percentage: see page 11. This is considered to be a measure which reflects
sales and costs under our direct control.
5 Games Workshop Group PLC
STRATEGIC REPORT continued
Key performance indicators continued
Monthly and year to date core operating profit
This measures gross profit less operating expenses for the core business on a monthly and year to date basis: see page 11. This is
considered to be a measure which reflects sales and costs under our direct control.
Year to date licensing revenue
This measures licensing revenue and cash earned from licensing: see page 9. These measures reflect revenue which is not under our
control.
Our key non-financial performance indicators are:
Number of own stores by territory
This measures the number of our own stores which is an indicator of our global reach: see page 10.
Number of ordering stockist accounts by territory
This measures the number of trade outlets that have ordered from us in the last six months. It is an indicator of our global reach and the
health of our trade account base: see ‘Trade’ paragraph on page 4.
Customer engagement
We measure this through our owned content channel Warhammer-community.com and reach delivered through our social platforms: see
pages 8 and 9.
Shareholder value
We believe shareholder value is created, primarily, by not destroying it. We have no intention to acquire other companies, nor to dispose
of any of those we own.
We return our surplus cash to our owners and try to do so in ever increasing amounts. A ‘working cash buffer’ of three months’ worth of
working capital requirement has been set aside alongside six months’ worth of future tax payments before deciding how much cash is truly
surplus for the purpose of declaring dividends.
Graph of shareholder value
Shareholder value for this graph is calculated as the price of our shares at period end plus the dividend per share declared in the period.
Review of the period
Another record year for Games Workshop - the business and the Warhammer hobby are in great shape.
It has been another exciting year. After a relatively slow start for us, we finally got into our rhythm and have delivered profitable sales
growth in all of our three channels, and in all major countries (excluding Russia, where we stopped selling in March 2022). It was great to
see the team effort in the second half focused on executing our operational plan rather than allowing ourselves, at times, to get distracted
by external events out of our control. There were lots of details to get right everywhere and, as always, the global team has delivered
again. We have controlled our costs well and improved our gross profit and as a result our cash flow has been great; allowing us to return
£136.5 million to our owners during the period. Our staff have once again been amazing; thank you and well done to you all.
Our operational plan is designed to give us the best chance to succeed every month so it was rewarding to see us finish the period with
seven months of consecutive Group core revenue growth against the prior period. Core revenue growth for the period at constant currency
finished Retail +16.9%, Trade +9.3% and Online +3.0%.
6 Games Workshop Group PLC
Review of the period continued
We have been focused on recruiting new customers, improving our customer service and at the same time aligning our stock forecasting
and delivery to our ambitious operational plans: getting the right products to the right locations at the right time. Easy to say but by its very
nature forecasting (trying to predict the future) is an impossible task to actually get right. We have been investing in factory and warehouse
capacity and our new facilities are starting to go live. We are now improving our end to end processes and our communications about our
product ranges with our customers, retail store managers, trade teams and customer service teams. Our new forecasting team still have
some hard work to do; we don’t want to underestimate demand but too much cash tied up in stock is not great either.
We also take an ambitious approach to aligning ourselves with broader stakeholders’ opinions on how we run Games Workshop. We have,
in the period reported, continued our focus on environmental, social and governance (ESG) areas. The board, operational board and our
senior managers carried out a thorough review of our carbon footprint which was supported by third party specialists. In summary, we
have committed to significantly reducing our scope 1 and 2 emissions over the next 10 years. We have a detailed plan and so we believe it
is achievable. More of that on page 23 later.
Morale at Games Workshop is upbeat: we are doing OK but inflation and the related higher interest rates are clearly an ongoing concern
for most of our staff. During the period, we continued to look at relevant ways to support our staff. We have increased pay across the
Group by on average 4.9% (supporting fully the increase in UK national living wage to £11 per hour) and following a review of our family
leave entitlement, our maternity and adoption leave entitlement has increased from 6 weeks to 18 weeks at full pay. Paternity leave will
increase from 1 to 2 weeks at full pay. We will continue to keep staff benefits under review.
In line with our Group Profit Share Scheme, and for their outstanding contribution to these results, we have paid each member of staff
£4,000 this period (2022: £3,500), in total £11.6 million (2022: £9.9 million).
Design
Following the successful relaunch of Warhammer The Horus Heresy in June 2022, we have released a steady flow of new plastic miniatures,
for what was originally a resin only range, allowing ever more trade accounts and hobbyists to access this part of the Warhammer hobby.
February saw the release of the novel ‘The End and the Death’, the first part of the climactic finish to the legendary storyline behind this
miniatures range which began in 2006 and over 60 novels ago!
The second half of the year also saw some fantastic new miniatures and a dramatic storyline leading into the new (10th) edition of
Warhammer 40,000, released in June 2023. Fair to say that excitement for the new edition is high.
Often in the shadow of Warhammer 40,000, Warhammer Age of Sigmar continues to grow steadily with launches in the period for
Seraphon, Slaves to Darkness and the wonderfully named Gloomspite Gitz, all being well received.
In December we released ‘The Battle of Osgiliath’, a box set based on one of the seminal scenes from our licensor’s ‘The Lord of The Rings'
movies. While a modest part of our business, it’s great to see it still going strong, 22 years since its first release.
We continue to scour the world for those individuals who want to be part of making the best fantasy miniatures in the world and this year
we welcomed several designers from South America. I’m always amazed that people are prepared to move to the other side of the world
to be part of what we do. The Warhammer hobby truly is something special.
On a sad note, we made the hard decision to make our Russian language translation team redundant. We held off as long as we could but
with the war in Ukraine sadly showing no signs of ending, we had to accept the reality that we won’t be in a position to provide hobbyists
in Russia with the offer we want, any time soon. We wish all the individuals well and our thoughts go out to those impacted by the
horrendous events in Ukraine.
Manufacturing
Our manufacturing team has remained focused, as always, on producing the best fantasy miniatures in the world. They have retained a
default 24/5 shift pattern keeping our overtime to a minimum and voluntarily working weekend shifts, but only as required.
All three Nottingham factories have operated in line with our forecast and expectations throughout the year. We decided not to expand
our manufacturing footprint further during the year, instead focusing our energy upon improving our capabilities and efficiencies using the
world class equipment and people we have. A range of projects have been progressed focusing on material efficiency as well as tool design
and machining. These projects will allow us, in the future, to produce more with less. We have also completed a suite of refurbishments to
upgrade our facilities for staff.
Work towards obtaining a China Compulsory Certificate (CCC) was completed as expected. Our factories successfully passed follow up
audits and we now have all relevant core products accredited for sale across China.
The land in Nottingham, purchased in 2020, has been partially developed with the building of an injection moulding tool storage unit and
the creation of c.100 car parking spaces. We continue to plan ahead and are ready to build an additional manufacturing facility on this land
when it is required. We currently have spare capacity.
Production staff costs decreased in the period as we reduced our use of temporary agency staff, with costs decreasing by £1.6 million to
£10.4 million, reducing to 2.3% of core revenue.
7 Games Workshop Group PLC
STRATEGIC REPORT continued
Warehousing
Having overcome significant technical challenges in late 2022, the warehouses in Nottingham and Memphis ended the financial period
running more efficiently. The priority for both of these sites going forward is to leverage the new equipment and systems, to reduce
operating costs and maintain customer dispatch times. Cross border shipping remains the key issue for orders into Europe. We continue to
review and consider practical and financially viable solutions to tackle this where possible - this could involve setting up a warehouse
facility in Europe.
North America
Whilst new systems and automation have been in place all year, it has not been until later in 2022/23 that software updates and modest
improvements to our old back office systems allowed the team to use them fully. During the 2023/24 financial period, we will
decommission our legacy warehouse system and equipment. The back office systems will be replaced as part of an ongoing systems
improvement plan.
UK
Finally, after a few teething problems, the EMG facility took on fulfilment of all UK and European retail, trade and international shipping.
Operations for all but our UK and European online order fulfilment have now been running out of EMG for a number of months with all
relevant operational staff transitioned from our Lenton site. Our Eurohub warehouse is being converted to become our dedicated materials
and component warehouse. The close proximity to the factories makes this the ideal site to offer a more just-in-time service to our three
factories. At the time of writing, the component and material operation is transitioning from EMG to the Eurohub component warehouse,
this should be completed by the end of the summer. Online fulfilment is making the reverse transition heading towards EMG. We are
anticipating a few final teething issues.
Australia
With sustained sales growth in Australia, options to increase our warehousing capacity are currently being explored. One option being
considered is moving to a bigger leased site close to the existing location.
Total warehousing costs have increased by £5.6 million to £25.9 million, the majority of the increase being across local authority rates
(+£1.1 million), depreciation (+£1.0 million), staff costs (+£1.2 million) and consumables costs (+£0.7 million); as a percentage of core sales,
warehouse costs have increased from 5.2% to 5.8%.
Service centres
As we grow there are just more things to process and join up. During the year our teams delivered another herculean effort processing
more transactions than ever. We continue to invest in our IT team to deliver our systems improvement plan. It is another important year
ahead for this relatively new team. There are really too many things to write about that our silent backbone does; the key highlights during
the year were ensuring the opening of the new Trade office in Barcelona happened on time and within budget from both a people, finance
and systems perspective as well as ensuring the receipt of all of the outstanding VAT from the French tax authorities. We thank them all for
their considerable efforts and for their commitment to continuous improvement.
Customer focused
Our goal remains to reach, engage and inspire Warhammer fans everywhere. We continue to focus our efforts on six of our own key areas:
Our stores
For decades, the staff in our retail stores have worked cheerfully and relentlessly to offer great customer service and more importantly
recruit ever more new customers into the Warhammer hobby. Our stores continue to be the best place to start your hobby journey with
us. We continue to offer free introductory experiences: receive your first model, learn how to build and paint it, and play an exciting game
with store staff. Our Warhammer Alliance schools programme has an active c.6,000 schools signed up. Designed to support young people
improve their engineering, arts, and maths skills, a Warhammer club is a great creative outlet that will easily fit into any development offer
for young people aged 12 and above. For older students (14+) in the UK, we also have the Warhammer skills development programme that
guides them through the hobby and works towards achieving the Duke of Edinburgh’s Award.
Warhammer Community
st
Warhammer-community.com remains the cornerstone of our online presence. The best place to come for all the latest news from the 41
Millennium and the Mortal Realms. During the year, the team again put out thousands of pieces of content to engage, inform and inspire
Warhammer fans globally.
My Warhammer
This single login gives access to our webstores and related apps. As at the period end, we have 427,000 active users. To better track
engagement we have defined an active user as someone who has engaged with us online in the last six months.
Warhammer+
Our subscription service for Warhammer fans is approaching its second year. It is a new way to explore the worlds of Warhammer. You’ll
find original animations and shows, access to Warhammer 40,000 and Age of Sigmar apps, a digital vault archive packed with decades of
lore and magazines, subscriber offers, and exclusive miniatures.
The exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP. Subscriber
numbers are currently 136,000 (2022: 105,000).
8 Games Workshop Group PLC
Customer focused continued
Email
Our email campaigns continue to be one of our most effective methods of communication. Subscriber numbers, defined as people who
opened one of our emails in the last six months, at the period end were 531,000 (2022: 455,000).
External events/social media
To broaden our reach to ever more potential enthusiasts, we continue to attend many of the largest tabletop third party events in the
world and post huge amounts of content on our popular official social media sites. This included some of our best animation ever; including
news of the new edition of Warhammer 40,000, supported by our latest trailer.
The network of local clubs, schools and group events, plus the activities of our trading partners and our own 500+ stores, have helped local
Warhammer communities grow offline… in the real world.
Licensing business
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. During the period we transferred the approval process for managing our IP with
licensing partners to the management team at the heart of Games Workshop, our Warhammer studios. This will ensure its representation
stays true to its origins.
Our strategy is to exploit the value of our IP beyond our core tabletop business, in multiple categories and markets globally. We intend to
ensure Warhammer’s place as one of the top fantasy IPs globally. The main areas of focus are:
Entertainment
Our contract negotiations with Amazon Studios continue, so within normal legal constraints we have nothing more we can add and we will
update you accordingly.
Video games
During the period our licensing partners launched five new games; four PC/console and one mobile. We also saw revenue from established
games that continued to perform well, many years after launch, through a mixture of added content and continued marketing. Particular
launches of note were Darktide, Boltgun and Tacticus.
Two new games were announced in the period including a major PC and console strategy game, Realms of Ruin and a combat racing game,
Speed Freeks.
New games launching in 2023/24 include major titles - Realms of Ruin and Space Marine 2. There are also the computer role playing game
Rogue Trader and digital collective card game Warpforge with unannounced release dates. In total there are nine unreleased games in
development and two new licences were signed in the year.
As a reminder, the viability and ongoing success of any of our licensing deals is broadly out of our control; they are reliant on the successful
development and delivery by our licensing partners.
Sales
Reported core revenue grew by 15.1% to £445.4 million for the period. On a constant currency basis, core sales were up by 9.6% from
£386.8 million to £424.0 million; split by channel this comprised:
450.0
400.0
. m
50.0
5. m
00.0
101. m
250.0
.2m
200.0
150.0
2 4.2m
100.0
214. m
50.0
0.0
ay 202 ay 2022
Trade Retail Online
Licensing revenue from royalty income was down slightly in the period at £25.4 million (2022: £28.0 million). This was largely due to a high
level of guarantee income on multi-year contracts signed in the previous period; 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: 68% PC and console games, 6% mobile and 26% other. In the period, guarantee income was £8.1
million (2022: £15.0 million). Cash received from licensees in the period was £26.5 million (2022: £15.4 million).
9 Games Workshop Group PLC
m
STRATEGIC REPORT continued
Revenue by sales channel
52 weeks ended
28 May 2023
52 weeks ended
29 May 2022
52 weeks ended
28 May 2023
52 weeks ended
29 May 2022
2023
2022
Constant currency
£m
Constant currency
£m
Actual rates
£m
Actual rates
£m
% of core
revenue
% of core
revenue
Trade
234.2
214.3
248.0
214.3
56%
55%
Retail
101.9
87.2
106.4
87.2
24%
23%
Online
87.9
85.3
91.0
85.3
20%
22%
Core revenue
424.0
386.8
445.4
386.8
Licensing revenue
23.3
28.0
25.4
28.0
Revenue
447.3
414.8
470.8
414.8
Trade
Trade achieved significant growth of 15.7% with growth in all key countries. In the period, our net number of trade outlets increased by
c.300 accounts to 6,500 which helped drive forward sales in this channel. It’s worth noting that a large number of independent retailers
now also sell our products online, meaning our customers have more choice than ever about where to buy Warhammer. During the year
we set up a sales office in Barcelona for trade sales into Europe. This was to help mitigate staff recruitment gaps in Nottingham, particularly
in relation to language skills.
Retail
We believe our stores are the best place to start your Warhammer hobby journey with us. Our stores are filled with staff who have
extensive Warhammer knowledge, build local communities, and offer Warhammer hobby guidance and support. It is an essential and
unique customer service offer that we are proud of. In the period, Retail achieved growth of 22.0%.
Store openings and closures during the period:
Number of stores
at 29 May 2022
Opened
Closed
Number of stores
at 28 May 2023
Number of single staff
stores at 28 May 2023
Number of single staff
stores at 29 May 2022
UK
135-
-
135
90
93
North America
1658
1
172
145
145
Continental Europe
1515
2
154
113
111
Australia
492
2
49
37
37
Asia
181
3
16
14
14
51816
8
526
399
400
In the period, we opened, including relocations, 16 stores. After closing 8 stores, our total number of stores at the end of the period was
526. The performance of each store will be kept under review and any stores that do not meet our financial model will be closed.
Our first café store in Tokyo, which opened in December 2022, has started well and has been recruiting new customers from day one. We
are planning to open three additional Warhammer stores in other cities across Japan in 2023/24.
Our new store openings will continue to follow our single staff model, where appropriate. We will continue to review the format of our
stores pragmatically e.g. we monitor transaction count carefully and add temporary staff to support the store manager when needed.
Ensuring we always recruit great store managers and offer our customers an exceptional in-store experience, remains a priority for us.
Online
Online sales increased by 6.7% compared to the same period last year. As noted above, our customers have a lot of options when it comes
to shopping for Warhammer online and are able to buy our products both through our own web stores (reported in Online) and through
those of independent retailers (reported in Trade). To continue to be fair to our 6,500 trade partners and to ensure our stock allocation is
appropriate, we don’t carry high quantities of new release products on our own online store - so it will nearly always sell out. We are at the
final stages of completing the first phase of upgrading our online store, putting it on a stable IT platform. This project has been more
complex than the original review, and to be honest, it has not been delivered in our normal joined up team Games Workshop way. The
team have regrouped and it is being delivered now in phases, the go live date of phase 1 is under review, currently scheduled for January
2024.
10 Games Workshop Group PLC
Core gross margin
Core gross margin percentage declined in the period from 67.1% to 66.5%.
6 .0
0. 0.6
6 .5
0.
0.
6 .0
1.0
6 .5
6 .1
6 .0
66.5
66.5
66.0
65.5
65.0
ay 2022 Inventory
Produc on aterials Logis cs Anima on ay 202
provision
Core gross margin has benefitted from a reduction in inventory provisions as well as production efficiencies as we reduced the use of
agency staff. These have been offset by an increase in logistics costs, as our expanded warehouse facilities came online, and we
experienced higher carriage costs, mainly in the first half of the year. Animation relates to the costs of producing the content for
Warhammer+, the amortisation of which is reported in cost of goods.
Operating expenses
Core operating expenses have increased by £20.3 million in the period (2023: 33.2% of core revenue; 2022: 33.0%).
150
5.4m 14 .0m
1.6m
145
1. m
140
.2m
.4m
1 5
1 0
12 . m
125
120
ay 2022 Sta costs Investments Property
Pro t share Other ay 202
costs
We have invested in our staff, increasing the levels of pay to our store staff and investing in new roles and pay levels in our support
services, as well as paying all staff more Group Profit Share. The additional spend which we categorise as investments is our ongoing
development of the upcoming new web store and the setting up of a new trade sales office in Barcelona. The increase in other costs is
mainly due to ongoing software support (+£0.9 million), travel (+£1.2 million), payment processing charges (+£0.8 million) and marketing
spend (+£1.1 million).
Licensing operating expenses have increased by £0.8 million due to a provision put in place against a licensing receivable. In the year we
also changed the structure of the team. The team is now more focused on quality rather than quantity.
Operating profit
Core operating profit increased by £16.5 million to £148.2 million (2022: £131.7 million). As a percentage of core sales, core business
operating profit was 33.3% (2022: 34.0%). On a constant currency basis, core business operating profit increased by £0.2 million to £131.9
million.
Licensing operating profit declined by £3.4 million to £22.0 million (2022: £25.4 million). On a constant currency basis, licensing operating
profit declined by £5.5 million to £19.9 million. These numbers are income less costs; they do not include any costs related to using the IP
created in the core business.
11 Games Workshop Group PLC
m
STRATEGIC REPORT continued
Cash generation
m
50
1.0m 12. m
2 1. m 2.6m
1 .1m
00
15.2m
.0m
250
1 6.5m
200
150
0.2m
100
1.4m
50
0
ay 2022 Net cash from
Share issue Other Lease
Product
Purchase of
Tax paid Dividends paid ay 202
opera ng
payments
development
capital assets
ac vi es
Included within net cash from operating activities are working capital movements relating to a decrease in inventory purchases of
£6.0 million, a decrease in trade and other receivables of £8.1 million and an increase of £4.2 million in trade and other payables.
Dividends
We followed our principle of returning truly surplus cash to shareholders. Dividends of £136.5 million (2022: £77.1 million) were declared
during the period. A ‘working cash buffer’ of three months’ worth of working capital requirement alongside six months’ worth of tax
payments has been set aside before deciding how much cash is truly surplus for the purpose of declaring dividends.
Return on capital employed - core business
200
1 5
1 0
160
1
140
120
11
120
100
4
100
0
2
60
4240
40
2
20
0
2014 2015 2016 201 201 201 2020 2021 2022 202
A long-term measure of our performance has been return on capital employed (ROCE). During the year our core business return on capital
has increased from 118% to 133%. If ROCE was calculated using the period end values, it would be 155% (2022: 113%). Core average capital
employed increased by £0.4 million to £111.7 million. Average balances are calculated over the 12 month period.
Investments in assets
This is what we have been spending your money on:
2023
£m
2022
£m
Shop fits for new and existing stores
1.3
1.3
Production equipment and tooling
9.3
10.1
Computer equipment and software
2.1
2.9
Site
1.9
3.4
Total capital additions
14.6
17.7
In 2022/23, we invested £6.7 million on moulding tools and £1.8 million in tooling, milling, injection moulding and paint machines. The
investment in computer equipment and software includes £1.3 million on the upgrade of our EMG warehousing facility. The investment in
Site includes £0.7 million on EMG and several other projects at our HQ in Nottingham.
Inventories
Inventories have decreased by £5.4 million. Inventory before inventory provisions decreased by £8.2 million to £36.6 million (2022: £44.8
million). Inventory provisions, at the period end, decreased to 9.8% of gross stock (2022: 14.3%). We continue to offer a broad range of
price points. Our average RRP increase on miniatures in the period reported was 6% and an average of 3% across all other product lines.
12 Games Workshop Group PLC
Trade and other receivables
Trade and other receivables decreased by £9.1 million, which includes an £11.3 million decrease in VAT receivable, due to the receipt of
the outstanding European VAT balance, and a £3.9 million decrease in royalty income receivable. This is partially offset by a £1.2 million
increase in trade account debtor balances, a £0.8 million increase in digital income trade receivables and a £2.5 million increase in other
receivables relating to credit card receipts in transit.
Trade and other payables
Trade and other payables increased by £3.4 million, including a £2.2 million increase in PAYE and other staff costs payable, and a
£1.9 million increase in VAT liabilities. This was offset by a £0.7 million decrease in deferred income mainly relating to online sales.
Taxation
The effective tax rate for the period was 21.0% (2022: 18.0%). The rate is higher than in the prior period as a result of the increase in the
UK corporation tax rate.
Treasury
The objective of our treasury operation is the cost effective management of financial risk. The treasury relationships are managed centrally
and operate within a range of board approved policies. No transactions of a speculative nature are permitted. Credit risk on cash and short
term deposits is mitigated as the counter-parties are banks with high credit ratings assigned by international credit agencies.
Funding and liquidity risk
The Group pays for its operations entirely from its cash flow.
Interest rate risk
Interest income for the period was £1.3 million (2022: £0.2 million) and interest expense was £0.9 million (2022: £0.8 million).
Foreign exchange risk
The sensitivity of the Group’s income statement to depreciation in foreign exchange rates on US dollar and euro financial assets and
liabilities are disclosed below. An appreciation of the stated currencies would have an equal and opposite effect:
Income statement losses
2023
£m
15% depreciation of the US dollar
5.9
15% depreciation of the euro
0.9
Our main currency exposures are in respect of the euro and US dollars. The rates used for these throughout the accounts are:
euro
US dollar
2023
2022
20232022
Period end rate used for the balance sheet
1.15
1.18
1.231.26
Average rate used for earnings
1.15
1.18
1.201.34
Non-financial and sustainability information statement
As highlighted in the business model section earlier in this annual report, we are a relatively complex business. With this in mind, we aim to
comply with the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006. The table
below and the information it refers to is intended to help stakeholders understand our position on key non-financial matters and how we
are addressing our reporting requirements. This is an area of focus for us going forwards.
Reporting requirement
Key policies and standards which govern our approach and controls
Where this is referenced in this
annual report
Employees
Employee statement
Pages 23 to 25
Attendance and absence policies including career break, maternity,
paternity and shared parental leave
Disciplinary, grievance and appeals policy
Social media policy
Health and safety policy
Anti-corruption and bribery
Anti-bribery policy
Anti-slavery policy
Page 35
Page 26
Insider dealing policy
Whistleblowing policy
Page 35
Human rights
Safeguarding policy
Data protection policy
Dignity at work policy
Equal opportunities policy
Pages 24 and 25
Environmental matters
Environmental statement
Product safety policy
Climate related financial disclosures
Pages 18 to 23
Page 25
Page 20
Business model
Pages 4 and 5
Non-financial KPIs
Page 6
Description of principal risks
Page 14
13 Games Workshop Group PLC
STRATEGIC REPORT continued
Gender diversity, greenhouse gases, social, community and human rights, and employees
We report on these topics in the directors’ report on pages 18 to 26.
Section 172 statement
This section describes how the directors have had regard to the matters set out in section 172(1) of the Companies Act 2006 in exercising
their duty to promote the success of the company for the benefit of its members as a whole.
The likely consequences of any decision in the long term
To be around forever, it is essential that the board makes decisions which are the best for Games Workshop in the long term. These
decisions are focused on long-term success, not short-term gains. The best example of this is the ongoing investment in our studios and our
rich IP. This together with our capital investment in new production facilities, warehousing space and technology, as well as global IT
infrastructure will stand us in good stead for the future.
The interests of the Group’s employees
The board actively engages with employees to ensure that the opinions and ideas of staff are always considered, and that staff are kept up
to date and informed. This has been achieved by running a series of quarterly departmental briefings, led by senior managers which helps
facilitate open communication.
The need to foster the Group’s business relationships with suppliers, customers and others
Suppliers
The board is briefed on a monthly basis regarding major investments and ongoing relationships with key suppliers as required. The board
also has oversight of relationships with suppliers through regular updates and reports from the executive directors. Details of how we
engage with suppliers can be found in the directors’ report on page 26.
Customers
The enjoyment of all things Warhammer by our customers is our priority. The board assesses and considers customer satisfaction and
engagement on a regular basis. Sales and performance information provide the board with good visibility of customer demand on a
monthly basis. Key performance indicators in respect of engagement with customers through our Warhammer Community website, digital
communications, and initiatives like Warhammer Alliance are likewise reported to, and assessed by, the board regularly. Any other
significant trends, issues or opinions of our customers are reported up to and discussed by the board when appropriate. Details of how we
engage with customers can be found in the director’s report on pages 25 and 26.
The impact of the Group’s operations on the community and the environment
The board recognises the importance of managing the social impact of the business and minimising any adverse impact of our operations
on the environment. Details of the progress made in respect of social responsibility and sustainability can be found in the directors’ report
on pages 18 to 23.
The desirability of the Group maintaining a reputation for high standards of business conduct
The board expects the highest standards of business conduct. The board receives regular updates in respect of matters of regulatory
compliance, and the business has policies, procedures and processes in place in respect of modern slavery, bribery and corruption, ethical
sourcing and tax evasion. The board recognises the importance of good corporate governance. Details of the approach taken by Games
Workshop can be found in our corporate governance report on pages 28 to 32.
The need to act fairly as between members of the Company
The Company has one class of shares so all shareholders are treated equally. Details of how we engage with shareholders can be found in
our corporate governance report on page 31.
Risks and uncertainties
The board has overall responsibility for ensuring risk is appropriately managed across the Group and has carried out a robust assessment of
the principal risks to the business. Our operational risks, including emerging risks, are identified and monitored through discussions at
regular risk meetings of the senior management team. These meetings are coordinated by the internal audit function and assess the impact
of each operational risk as well as identifying new emerging risks and mitigating actions required. The output of this process is considered
and reviewed by the audit and risk committee twice yearly.
The key strategic risks to the Group are regularly reviewed by the board. The principal strategic risks identified in 2022/23 are discussed
below. These risks are not intended to be an extensive analysis of all risks that may arise but more importantly are the ones which we
believe could cause business interruption.
• IT strategy and delivery - with a number of significant business projects in play, all of which are dependent on IT support, there is a
requirement for a robust IT strategy which enables us to deliver key strategic projects as well as supporting day to day activities. We
are actively supporting our global head of IT in investing in the structure of his team to ensure the IT support needs of the business
can be delivered. We have appointed a new non-executive director, Mark Lam, with many years of operational and strategic IT
experience to help management review their strategies and operational plans.
14 Games Workshop Group PLC
Risks and uncertainties continued
• Media - whilst this remains an area for future growth, it is imperative that exploitation of our IP through media channels does no harm
to our core business. Our IP steering team meets every month to discuss ongoing and future exploitation, to ensure that all use of our
IP, through all channels, is approved, correct and consistent. It is fully supported by our in-house legal team who will act when
needed. The operational board meets quarterly to review progress and current status of all licensing projects.
In addition to this, we have a number of additional operational risks as modelled in the viability statement (page 27) but we do not
consider these to be principal strategic risks.
Priorities for 2023/24
We are making progress with our key priorities. Each of these is designed to ensure we deliver our exciting operational plan and continue
to engage and inspire our loyal customers and attract new ones.
As part of our overall strategy, six key initiatives will be prioritised in 2023/24. These are designed to deliver further sales growth whilst
maintaining our core operating profit margin and continuing to surprise and delight our customers. They are in addition to our investment
in new product quality and ensuring our new factories and warehouses deliver the appropriate cash payback.
Staff training and development
We care passionately about our global team. We have ambitious long-term plans, but we also run the business with only the resources we
need. We will continue to recruit essential new jobs or where we need to back-fill positions. Like last year, many of these recruits will be in
order to scale - in our factories and warehouse facilities as well as in our support functions, mainly IT.
We will continue to support lifelong learning and training to develop the skills needed to enable all our staff to be successful. We are also
more active in developing orderly succession plans of both the board and senior management. We continue in our commitment to diversity
and inclusion at Games Workshop.
Growth
We are planning to add a further 30 new stores: 16 in North America, 11 in Europe and 3 in Japan.
We again aim to grow in every major country in the world, and via all of our three sales channels with all of our core IP. Our online store
will have a new platform and will be rebranded for launch in 2023/24. Phase one will have no major bells or whistles but will be a more
stable technical solution. We look forward to more hobbyists signing up to My Warhammer, the gateway into our fantasy worlds.
We will continue to open more independent retailer accounts. Selling via physical outlets remains an important sales channel for us. Some
have their own online store, some not. We have seen sales grow in both.
We will continue to search for and engage with hobbyists everywhere.
Customer focused
We will also continue to be customer focused - engaging better with our existing customers and reaching whole new audiences with the
Warhammer hobby, and the rich worlds it is set within.
Social responsibility
We are committed to ethical sourcing and staff wellbeing, diversity and inclusion. We will be collecting and reporting internally the
ethnicity of our staff and we will track trends. Committed to diversity, we will continue to performance manage and recruit for the personal
qualities needed to do a particular job as well as the necessary skills. I will continue to do my best to ensure this is the case and that we are
fair and free from any bias and/or prejudice.
Sustainability - climate change
We will continue our work on reducing our carbon footprint in line with our plan documented on page 23 and explain how we are doing
against those goals.
Licensing business
The priority remains the same to deliver on our strategy by licensing our IP to partners who will successfully launch high quality video
games, live action or animation shows.
Outlook
We finished the year having delivered eight consecutive years of Group sales and profit growth - in the period we reported the highest
level of sales and the most profit we have generated since flotation 29 years ago. As for the future, in our 30th year we will continue to
focus on product quality - in June 2023 we launched the best Warhammer 40,000 range of miniatures in our history... we wait to see if our
hobbyists like them as much as we do. Our international team has been sensational again, thanks to you all.
Approved by the board, and signed on behalf of the board
Kevin Rountree
CEO
24 July 2023
15 Games Workshop Group PLC
DIRECTORS’ REPORT
The directors present their annual report together with the audited consolidated financial statements and independent auditor’s report for
the period ended 28 May 2023.
General information
Games Workshop Group PLC (the ‘Company’) and its subsidiaries (together the ‘Group’) designs and manufactures miniature figures and
games and distributes these through its own network of retail stores, independent retailers and online via the global web stores. The
Group has manufacturing activities in the UK and sells mainly in the UK, Continental Europe, North America, Australia, New Zealand and
Asia. The Group also grants licences to third parties for the development of video games and other products utilising the Group’s
intellectual property.
The Company is a public listed company, incorporated and domiciled in the United Kingdom. The address of its registered office is Willow
Road, Lenton, Nottingham, NG 2WS, United Kingdom. The Company’s ordinary share capital is listed on the London Stock Exchange.
Dividends
Dividends of 415 pence per share were declared and paid during the period (2022: 235 pence per share declared, 285 pence per share
paid). As a result of a procedural oversight, 2 pence per share of the dividend paid on 25 November 2022 was classed as an unlawful
dividend. Although the Company always had sufficient reserves to pay this dividend at the time it was made, the Companies Act 2006
requires this to be demonstrated by reference to interim accounts filed at Companies House prior to payment. Those interim accounts,
however, were not filed with Companies House until after the relevant dividend had been paid and after the lapse had been identified. No
fines or penalties have been incurred by the Company. Please see resolution 15 tabled in the notice of meeting for the annual general
meeting (‘AG ’).
Directors
The present directors of the Company are listed on page 48. All of the directors were members of the board throughout the year and up to
the date of signing the financial statements except Elaine O’Donnell, who stepped down from the board on 31 December 2022, Randal
Casson who joined the board on 1 July 2022 and Mark Lam who joined the board on 11 April 2023.
In accordance with the 2018 UK Corporate Governance Code (‘the Code’), all directors are subject to annual re-election. In relation to the
non-executive directors, the chair has confirmed that, following formal performance evaluation, the performance of Kate Marsh, Randal
Casson and Mark Lam continues to be effective and they continue to demonstrate commitment to their roles as non-executive directors,
including commitment of the necessary time to board and committee meetings and other duties. John Brewis is considered by the board to
be independent of the Group, as set out in the corporate governance report. The non-executive directors have formally evaluated the
performance of John Brewis as non-executive chair and consider him to be effective in his role.
Directors’ interests
The interests of the directors in the shares of the Company, together with details of share options granted to the directors, are disclosed in
the remuneration report on page 46. None of the directors had a material interest in any contract of significance to which the Company, or
any of its subsidiaries, was a party during the year.
Directors’ indemnities
The Company has made qualifying third party indemnity provisions for the benefit of its directors, as permitted by section 234 of the
Companies Act 2006, which were in force during the year and up to 24 July 2023.
Information on executive directors
Kevin Rountree, CEO. Kevin joined Games Workshop in March 1998 as assistant group accountant. He then had various management roles
within Games Workshop, including head of sales for the Other Activities division (including Black Library, Licensing and Sabertooth Games).
Kevin was appointed CFO in October 2008. and chief executive on 1 January 2015. He is a qualified chartered management accountant and
prior to joining Games Workshop, Kevin was the management accountant at J Barbour & Sons Limited.
Rachel Tongue, CFO. Rachel joined Games Workshop in September 1996 as group tax manager. She then had various accounting roles
within Games Workshop and was appointed company secretary in October 2008. She has also managed the legal and compliance functions
within Games Workshop since November 2012. She was appointed group finance director in January 2015 and assumed the role of chief
financial officer in November 2020. Rachel is a qualified chartered accountant and chartered tax adviser having trained with Arthur
Andersen.
Information on non-executive directors
John Brewis was appointed to the board on 20 June 2018 and became non-executive chair on 1 January 2023. John has over 0 years’
experience in high volume manufacturing businesses and had various roles within Reach Plc, formerly Trinity Mirror Plc, including
managing director of the Group's manufacturing division.
Randal Casson was appointed to the board on 1 July 2022. Randal qualified as a chartered accountant with PwC. He worked there for 35
years, the last 22 years of which he was an audit partner. He retired from PwC on 30 June 2022.
16 Games Workshop Group PLC
Information on non-executive directors continued
Kate arsh was appointed to the board on 24 July 201 . Kate has over 0 years’ experience in digital and media businesses. She is
currently non-executive director at Devolver Digital Inc., Elstree Film Studios Limited and is heading up international channel development
for MGM where she leads the storied studio’s branded digital services outside of the US. Kate has built and managed significant media
businesses across Europe holding senior roles with Sky, GroupM, the BBC, and Sony Pictures Television.
Mark Lam was appointed to the board on 11 April 2023 and became senior independent director on 18 May 2023. Mark has many years of
board experience in telecommunications and information technology. Mark was previously chief technology and information offic er of
Openreach and a senior executive at BT Group. He holds a number of public appointments in the UK and currently serves as chair of the
Royal Free London NHS Foundation Trust, one of the largest hospital groups in Europe.
Independent auditor
As at 24 July 2023, so far as each director is aware, there is no relevant audit information of which the auditor is unaware and each director
has taken all steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information
and to establish that the auditor is aware of that information.
Share capital, share rights and other information
As at 24 July 2023, the Company’s authorised share capital was 2,100,000 divided into 42,000,000 ordinary shares of 5p each nominal
value (‘ordinary shares’). On 21 July 2023 there were 32,913,994 (21 July 2022: 32,840,204) ordinary shares in issue. These ordinary shares
are listed on the London Stock Exchange. All ordinary shares rank equally with respect to voting rights and the right to receive dividends.
Shares acquired through the Company’s share schemes rank pari passu with the shares in issue and have no special rights. The holders of
ordinary shares are entitled to receive the Company’s annual report, to attend and speak at general meetings of the Company, to appoint
proxies and to exercise voting rights. There are no restrictions on transfer or limitations on the holding of any class of share and no
requirements for prior approval of any transfers. The directors may refuse to register a transfer of shares if there is a failure to comply with
certain requirements of the Company’s articles of association. None of the shares carry any special rights with regard to control of the
Company.
In accordance with the Company’s articles of association, each share (other than those held in treasury) entitles the holder to one vote at
general meetings of the Company on votes taken on a poll. On a show of hands at a meeting, every member present in person or by one or
more proxies and entitled to vote has one vote. Unless the directors decide otherwise, if a shareholder is given notice that he has failed to
provide information required in relation to any shares pursuant to a notice under section 793 of the Companies Act 2006, that member will
be unable to vote on those shares both in a general meeting and at a meeting of the shareholders of that class. If such shareholder holds
more than 0.25% of the issued shares of a class (excluding treasury shares) and is in default of a section 793 notice, the directors may also
state in the notice that: (i) the payment of any dividend shall be withheld; and (ii) that there can be no transfer of the shares held by such
shareholder.
Subject to the provision of law, the Company may by ordinary resolution declare a dividend to be paid to the members according to their
respective rights and interest, but no dividend may exceed the amount recommended by the directors. The directors may also declare and
pay interim dividends. Subject to shareholder approval, the directors may pay dividends by issuing shares credited as fully paid up in lieu of
cash dividends. If dividends remain unclaimed for 12 years they are forfeited and revert to the Company.
The rules about the appointment and replacement of directors are contained in the Company’s articles of association. The Company’s
articles of association state that a director may be appointed by an ordinary resolution of the shareholders or by the directors, either to fill
a vacancy or as an addition to the existing board but so that the total number of directors does not exceed the maximum number of
directors allowed pursuant to the Company’s articles of association. The Company’s articles of association do not currently specify a
maximum number of directors. The Company may by ordinary resolution remove a director from the board of directors.
The Company’s articles of association also state that the board of directors is responsible for the management of the business of the
Company and in doing so may exercise all the powers of the Company subject to the provision of relevant legislation and the
Company’s constitutional documentation. The powers of the directors set out in the Company’s articles of association include those in
relation to the issue and buy-back of shares. As at 28 May 2023, the Company had an unexpired authority to repurchase shares up to a
maximum of 3,284,020 shares. During the period no shares were purchased in the market for cancellation.
Changes to the articles of association must be approved by the shareholders in accordance with the legislation in force from time to time.
The Company does not have agreements with any director or employee that would provide compensation for loss of office or employment
resulting from a takeover, except that the provisions of the Company’s sharesave scheme may cause options to be exercised in a takeover.
Constructive use of the AGM
The chairs of the audit and risk, remuneration and nomination committees will be available to answer questions at the AGM. Separate
resolutions are proposed for substantially separate issues at the meeting and the chair of the Company will declare the number of proxy
votes received both for and against each resolution.
Corporate governance
The Company’s statement on corporate governance is included in the corporate governance report on pages 28 and 29 and forms part of
this report.
17 Games Workshop Group PLC
DIRECTORS’ REPORT continued
Environment and social
Our head of social responsibility and sustainability (‘SRS’) co-ordinates our social responsibility and sustainability initiatives into a strategic
plan that ensures we act responsibly and sustainably in everything that we do. We now have a dedicated team who are responsible for co-
ordinating the delivery of our SRS strategy as set out below. Many of these initiatives are not new.
SRS strategy
Like all companies, Games Workshop has a responsibility to operate in a way that brings value to all our stakeholders and to continue to
build a company that does the right things, of which we can all be proud.
Our hobby brings tremendous amounts of enjoyment to the members of our community - facilitating friendships and an escape into an
immersive universe of fantasy characters and worlds, whilst helping build social skills, strategic thinking, and providing a medium for
artistic expression. Through Warhammer Alliance, our in-store staff provide educational support for the Warhammer hobby and
participation in the Warhammer Skills Development Programme can also contribute to the Duke of Edinburgh’s Award. We are proud of
what we do and that the design, manufacture and sale of the best fantasy miniatures in the world provides so much enjoyment to our
customers. However, we can’t ignore the impacts from our use of resources (the majority of our miniatures are made from plastic) or the
resulting emissions and waste caused by our activities.
Our SRS strategy is built to support our overall business strategy. To deliver the long-term success of the business and continue to engage
and inspire our customers forever, we have to proactively reduce our environmental impact and ensure high ethical and environmental
standards throughout our operations and supply chain.
The strategy is focused upon the following areas:
Environment
• Promoting sustainability throughout everything we do
• Playing our part in tackling climate change
• Reducing waste
• Minimising the use of natural resources
People
• Creating a positive environment for staff
• Promoting responsible manufacture
• Ensuring ethical supply chains
• Protecting our customers
The SRS strategy will help us improve the transparency of our reporting and allow us to communicate clearly on how we are addressing key
subjects. This year we report on the progress we have made on key focus areas.
Environment
We will aim to capture our activities associated with managing our environmental impact both in our operations and throughout our
supply chain. Our focus will be on fulfilling our role in helping to tackle climate change, using resources efficiently and working to minimise
the waste associated with our operations and products, and ensuring any waste is dealt with as sustainably as possible.
Climate strategy
We have carried out a climate scenario analysis (CSA). This CSA helps us understand the potential context in which our business will be
operating in the future and allows us to prepare for a variety of different possible outcomes. The analysis uses existing climate change
science and applies projections to suggest how our business may be impacted by climate change.
CSA methodology
We conducted our CSA using a standard methodology in accordance with guidance provided by the Taskforce for Climate-Related Financial
Disclosures (TCFD) recommendations. The approach is broken down into its key components below:
• Risk screening
For the first iteration of our CSA, we focused solely on risks rather than opportunities. We screened all potential risks and narrowed
them down further through workshops to produce a shortlist, which consisted of two physical and two transitional risks.
• Scenario selection
We used global climate scenarios defined by the Network for Greening the Financial Systems (NGFS). We selected three climate
scenarios from the NGFS for our analysis. Details can be seen in ‘chosen climate scenarios’ below. Each scenario presents a distinct
possible future in which we may be operating.
• Impact quantification
We carried out a range of different workshops internally to gain an understanding of the operational implications of each of the
identified risks and how these may vary across the three different scenarios. These workshops were carried out with input from
external climate scenario planning experts within different areas of our business.
Through this we were able to identify a wide variety of potential impacts on our business model resulting from climate change. When
analysing each risk, qualitative and, wherever possible, quantitative assessments were made.
18 Games Workshop Group PLC
Environment continued
Chosen climate scenarios
The three selected scenarios from the NGFS can be seen below, in order of the severity of risk exposure from lowest to highest.
• ‘Net zero 2050’
An ambitious scenario that limits global warming to 1.5°C through stringent climate policies and innovation, reaching net zero CO2e
emissions around 2050. This scenario assumes that ambitious climate policies are introduced immediately. Carbon removal is used to
accelerate decarbonisation but kept to the minimum possible and broadly in line with sustainable levels of bioenergy production. Net
CO2
e emissions reach zero around 2050, giving at least a 50% chance of limiting global warming to below 1.5°C by the end of the
century. Physical risks are relatively low, but transition risks are high.
• ‘Divergent net zero’
A scenario that reaches net zero by 2050, but with higher costs due to a less integrated and consistent approach to policy across
different sectors and regions along with a quicker phase out of fossil fuels. This mimics a situation where the failure to coordinate the
policy stringently across sectors results in a high burden on consumers, while decarbonisation of energy supply and industry is less
stringent. Furthermore, the availability of carbon dioxide removal technologies is assumed to be lower than in ‘net zero 2050’.
Emissions are in line with a climate goal giving at least a 50% chance of limiting global warming to 1.5°C by the end of the century but
with considerably higher transition risks than net zero 2050.
• ‘Current policies’
This scenario assumes that only currently implemented policies are preserved, leading to high physical risks. This represents a business-
as-usual scenario with minimal meaningful action taken on reducing emissions. Emissions grow until 2080 leading to about 3°C of
warming and severe physical risks. This includes irreversible changes, such as higher sea level rise, and potentially the crossing of
devastating climate ‘tipping points’ such as widespread methane release through the melting of permafrost landscape, or the
permanent shutdown of the Atlantic Gulf Stream.
Outcomes
The outcome of this CSA was the identification of the most relevant climate-related risks for our business (summarised below), a stronger
understanding of their potential impacts across the different selected scenarios and a conclusion that there is no substantive impact on the
financial statements. Of the risks that were identified, all were found to have global potential; however, the most significant impacts were
focused on the UK and US where the bulk of our manufacturing and distribution operations are.
Whilst some of the risks identified have the potential to have a significant impact, the likelihood of these are considered to be low at this
time. We recognise that for this conclusion to be valid, it needs to be kept up to date with the most recent science and understanding of
climate change. As such, the CSA and the scenarios used will be reviewed each year and undergo a full refresh every three years to ensure
they remain relevant and appropriate for our business. Following the 2022/23 review, an additional risk regarding access to resources has
been included below.
Identified risks
Risk type
Risks
Description
Timescale
Likelihood
Potential
Impact
Impact
Management
process
Physical
Extreme
weather -
retail
If the frequency and severity of
events like flooding and
hurricanes increase then this
may interrupt operations and
damage assets and facilities,
leading to revenue loss and
repairs costs, respectively.
1-3 years
Medium
Low
Increased
capital
expenditure
and loss of
revenue
Consideration of
weather resilience in
site selection and
building design
Extreme
weather -
logistics
Low
High
Transitional
Carbon
pricing
If carbon taxes are
implemented or increased in
certain countries then this
could cause our cost base to
increase.
1-3 years
Low
High
Increased
operating
costs
Development of low
carbon alternatives
for materials and
operations (e.g.
sourcing on-site
renewables)
Physical
Supply chain
disruption
If the indirect effects of climate
change increase in frequency or
severity (e.g. conflict or
geopolitical issues) then
logistics services may be
interrupted and/or their costs
may increase.
>3 years
High
Medium
Increased
operating
costs
Consideration of
benefits of
production and
warehousing
expansion and
diversification
Transitional
Access to
resources
If there is an increased scrutiny
in the use of fossil fuels then
this could impact the
availability and/or cost of the
materials needed to
manufacture our products and
operate our facilities.
>3 years
Low
High
Increased
operating
costs
R&D programmes to
increase closed loop
recycling and
evaluate
alternatives
19 Games Workshop Group PLC
DIRECTORS’ REPORT continued
TCFD
We support the recommendations of the TCFD. We recognise the need to reduce our carbon emissions and further strengthen the
resilience of our business to the impacts of climate change. In accordance with Listing Rule 9.8.6R (8), we confirm that the statement of this
annual report includes climate-related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures. In
determining this, we have followed Section C of the TCFD Annex entitled ‘Guidance for All Sectors’ and Section E of TCFD Annex entitled
‘Supplemental Guidance for Non-Financial Groups’ (where relevant). We plan to further develop the metrics (and where appropriate,
targets) that help monitor specific identified climate-related risks and opportunities to help strengthen our management of climate-related
risks and maintain our compliance.
The following is a summary table detailing our broad approach to each recommended disclosure, and signposting to the relevant sections
of our annual report.
TCFD recommendation
Summary of approach to disclosure
Signpost to detailed disclosure
Governance
Describe the board’s
oversight of climate-
related risks and
opportunities
Ultimate accountability for and oversight of climate-related risks and opportunities sits with
the board.
Strategic oversight of climate-related risks is provided by the Sustainability Steering Group
(SSG), chaired by the CFO, who forward any significant risks on to the audit and risk committee
(see below for more detail).
The board will review all strategic and financially substantive risks at least twice a year through
the audit and risk committee, which includes current progress on any targets defined to
manage climate-related issues associated with these risks.
The outputs from these committee meetings will help refine and plan the changes to the
strategy, risk management processes, policies and future investment.
Pages 29 and 30 - Board
committees
Page 33 - Significant issues
considered by the audit and
risk committee
Describe management’s
role in assessing and
managing climate-
related risks and
opportunities
Strategic oversight of climate-related risks is provided by the SSG. The SSG is chaired by the
CFO and meets quarterly. It reviews climate-related and other sustainability risks collated from
across Games Workshop, with any significant risks forwarded on to the audit and risk
committee for consideration alongside other risks that could impact on the Group's strategic
or financial planning.
The SSG also monitors progress on risk management activities undertaken by the specific
areas across the business as part of their efforts to manage climate-related issues associated
with their activities. Our head of SRS is responsible for co-ordinating the management of
climate-related risks and opportunities via the Carbon Management Group (CMG).
This group meets monthly to review progress on delivery of our plan including: the
identification, assessment, and management of climate-related risks; and monitoring of
associated goals and targets. The group is chaired by the head of SRS and is supported by
senior managers from the relevant teams across the business.
Page 33 - Significant issues
considered by the audit and
risk committee
Page 34 - Risk management
Strategy
Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium and long
term
We have carried out a CSA. This CSA helps us understand the potential context in which our
business will be operating in the future and allows us to prepare for a variety of different
possible outcomes.
The analysis uses existing climate change science and applies projections to suggest how our
business may be impacted by climate change.
The ultimate outcome of this CSA was the identification of the most relevant climate-related
risks for our business (summarised on page 19 ‘Identified risks’) and a stronger understanding
of their potential impacts across the different selected scenarios.
Pages 18 and 19 - Environment
Describe the impact of
climate-related risks
and opportunities on
the organisation’s
business, strategy and
financial planning
Of the risks that were identified, all were found to have global potential. However, the most
significant impacts were focused on the UK and US where the bulk of our manufacturing and
distribution operations are.
Whilst some of the risks identified have the potential to have a significant impact, the
likelihood of these are considered to be low at this time. We recognise that for this conclusion
to be valid, it needs to be kept up to date with the most recent science and understanding of
climate change. As such, the CSA and the scenarios used will be reviewed each year and
undergo a full refresh every three years to ensure they remain relevant and appropriate for
our business. Following the 2022/23 review, an additional risk regarding access to resources
has been included below.
Pages 18 and 19 - Strategy
Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario
Based on the response to the recommendation above, the Group considers that its strategy is
resilient to the potential impacts of the scenarios identified.
Pages 18 and 19 - Strategy
20 Games Workshop Group PLC
Risk management
Describe the
organisation’s process
for identifying and
assessing climate-
related risks
The identification of emerging climate related-risks and opportunities and the monitoring of
any changes is coordinated through the CMG.
Any hazards that can potentially result in climate-related risks and opportunities are identified
using a range of processes, including: monitoring future developments, stakeholder
engagement, scenario planning and subject matter expertise. Relevant hazards are
consolidated into risks and opportunities and assessed by our CMG based on the likelihood of
occurrence and the potential impact.
The identified risks are added to our climate risk register where they are ranked and
prioritised. Any risks that pass an impact threshold in any one category, including financial,
reputational or environmental impacts, are also added to the risk register for the relevant part
of the business who are then responsible for managing that risk appropriately.
Page 34 - Risk management
Describe the
organisation’s process
for managing climate-
related risks
Climate-related risks cover a broad range of potential business risks - from specific risks where
climate change acts as the primary cause, to risks where climate change acts to accelerate or
worsen the impact of existing risks.
The management of these different risks varies according to the type of risk they are, and their
effective time horizon as follows:
• Transitional risks, such as those caused by the increasing cost of high carbon materials,
are often not within our control but can be managed. For example, through the
development of manufacturing technology that avoids such materials.
• Physical risks, such as the increased likelihood of supply chain disruptions caused by
extreme weather conditions, that are outside our control are often best managed
through risk transfer. For example, having business continuity insurance to cover any
lost revenue caused by an unforeseen disruption in business operations.
Whilst some aspects of the management of climate-related risks (such as their impact on
financial planning) apply at all time horizons, other aspects are more suited to specific time
horizons as follows:
• Short term: considers climate-related risks that could affect the business within the
next 12 months. The management of such risks will form part of decisions made in line
with our budgeting process.
• Medium term: considers climate-related risks that could affect the business in one to
three years’ time. These risks are managed through our three year operational plan and
influence decisions such as target setting.
• Long term: considers climate-related risks that could affect the business beyond three
years. These risks are managed as part of our long term strategic planning activities.
Page 15 - Priorities for
2023/2024
Page 18 - Environment and
social
Pages 18 and 19 - Environment
Pages 22 and 23 - Metrics and
targets
Page 34 - Risk management
Describe how processes
for identifying,
assessing, and
managing climate-
related risks are
integrated into the
organisation’s overall
risk management
Climate-related risks are considered as part of our group wide risk management process.
Substantive climate-related risks with the potential to have a material financial or strategic
impact on our business are added to the group wide operational risk register. These
substantive risks are reviewed, alongside all other group wide risks at least twice a year by the
audit and risk committee.
Pages 29 and 30 - Board
committees
Page 33 - Significant issues
considered by the audit and
risk committee
Page 34 - Risk management
Metrics and targets
Disclose the metrics
used by the
organisation to assess
climate-related risks
and opportunities in
line with its strategy
and risk management
process.
Specific climate-related risks are assessed using a range of scope 3 carbon emissions data that
help us monitor the effect of any management activities and so help steer our strategy. For
example, we measure the carbon emissions associated with purchased goods and services to
evaluate the effect of activities aimed at reducing our exposure to carbon pricing.
With that said, the understanding of how climate change may impact on business and society
is ever evolving and there is more to do in this area. We plan to further develop the metrics
(and where appropriate, targets) that help monitor specific identified climate-related risks and
opportunities.
Pages 18 and 19 - Environment
Page 34 - Risk management
Disclose scope 1, scope
2 and, if appropriate,
scope 3 greenhouse gas
(GHG) emissions and
the related risks.
We report annually on all material global emissions using an operational control approach for
our scopes 1 and 2, plus selected scope 3 emissions. Our audit and risk committee considers
all relevant climate-related factors as part of our overall approach to risk management.
Pages 22 and 23 - Metrics and
targets
Describe the targets
used by the
organisation to manage
climate-related risks
and opportunities and
performance against
targets.
To help us to set targets and manage the externally driven elements of these risks, we
continue to work with our supply base to better measure carbon emissions and impacts
associated with the goods and services they provide. However, we have a good understanding
of our scope 1 and 2 emissions and the internal factors that drive them. Our scope 1 and 2
target will be to reduce our CO
2
e emissions by 55% by 2032, using 2021/22 emissions as a
baseline.
This target is in line with the level of decarbonisation required to limit temperature rises to
o
1.5
C so is aligned with the UK Government's targets.
Pages 22 and 23 - Metrics and
targets
21 Games Workshop Group PLC
DIRECTORS’ REPORT continued
Metrics and targets
We report on all material global emissions using an operational control approach for our scopes 1 and 2, plus selected scope 3 emissions.
The methodology used to compile our GHG emissions inventory is in accordance with the requirements of the following standards: the WRI
GHG Protocol Corporate Standard (revised version) and DEFRA’s Environmental Reporting Guidelines: Including Streamlined Energy and
Carbon Reporting requirements (March 2019). Our energy and carbon disclosures for the period 1 June 2022 to 31 May 2023 are set out
below:
Restated
2023
2022
TCO
2
e
TCO
2
e
TCO
2
e
Scope Emissions source
UK emissions Total emissions Total emissions
Scope 1 Natural gas
278580672
Company cars
233138
Other fuels
1 1 9
Refrigerants
3 4 32
Total scope 1
305616 751
Scope 2 Electricity (location based)
1,824 3,992 3,898
District heating
- 36-
Total scope 2
1,824 4,028 3,898
Total scope 1 and 2
2,129 4,644
4,649
Scope 3 Purchased goods and services
41,188
37,860
Capital goods
791
-
Upstream transport and distribution - air
3,020 1,676
Upstream transport and distribution - sea
1,338 1,838
Upstream transport and distribution - road
2,684 5,420
Upstream transport and distribution - warehousing
96-
Upstream transport and distribution - other
2,586 -
Waste generated in operations
231
229
Business travel - flights
665221
Business travel - other
9369
Total scope 3
52,692 47,313
Total scope 1, 2 and 3
57,336
51,962
Total energy usage (mWh)
10,976 19,151
18,380
The prior year emissions and energy usage have been restated for gas and electricity due to errors in how utility data was captured in
German and US retail stores in 2021/22. Also, purchased water emissions have now been included within purchased goods and services.
Capital goods, warehousing and other upstream transportation were included in purchased goods and services and transportation
categories in the prior year.
2023
Restated
2022
Carbon intensity (tCO
2
e /£000) scope 1, 2, 3
0.122
0.126
Carbon intensity (tCO
2
e /sq. m.) scope 1, 2, 3
0.342
0.311
Games Workshop has used a carbon management platform to independently calculate its Greenhouse Gas (GHG) emissions in accordance
with the principles of the Greenhouse Gas Protocol. The GHG emissions have been assessed following the ISO-14064:2018 standard and
have used the 2022 emission conversion factors published by the Environmental Protection Agency (EPA), the Department for Business,
Energy Industrial Strategy (BEIS), International Energy Agency (IEA) and other public resources. The reporting year shown is from 1 June
2022 to 1 ay 202 , and considers all assets under the Company’s operational control. The scope 3 boundary has been developed in
accordance with the Greenhouse Gas Protocol Scope 3 Guidelines.
Actual activity data has been collected from across the Group on a monthly basis where available, and annually if not. This data has been
summarised, reviewed, and assessed by a third party for its completeness and accuracy. The activity data is multiplied by an appropriate
emission factor to calculate the scope 1, 2 and 3 emissions.
This year our total GHG emissions for scope 1, scope 2 and scope 3 increased by 10.3% on last year. This increase is primarily driven by an
increase in emissions associated with our purchased goods and services, in line with our growth as a business. Our revenue based
emissions intensity has decreased by 3.2% to 0.122 tCO2
e /£000 this year, from 0.126 tCO2
e /£000 in 2021/22.
22 Games Workshop Group PLC
Metrics and targets continued
Further details on our reporting and notable trends are as follows:
• Scope 1 - Our direct scope 1 emissions have decreased by 18.1% from the previous period. This is largely due to a reduction in the
use of natural gas for on site heating processes.
• Scope 2 - This year, our scope 2 emissions have seen an increase of 3.3%, primarily due to an increase in electricity use overall
and an increase in district heating for some of our European retail stores. Whilst we are able to use actual electricity usage data
to calculate and report emissions for all our manufacturing and logistics operations, as well as our UK retail stores, a number of
our non-UK retail stores still rely on spend based data. This is something that we are planning to address as part of our
commitment to reduce our scope 1 and 2 emissions.
• Scope 3 - As in previous periods, scope 3 represents over 90% of our total emissions, with the most material activities being the
purchasing and transportation of goods. This year the emissions from purchased goods and services increased by 8.8%, which has
been driven by the continued growth of the business. Our emissions from upstream transportation and distribution also
increased by 8.8%, which has been driven by an increase in air transport activities.
Greenhouse gas targets
As part of our commitment to fulfilling our role in tackling climate change, we have set a scope 1 and 2 emissions reduction target to
o
reduce our carbon footprint in line with the level of decarbonisation required to limit temperature rises to 1.5
C. Our scope 1 and 2 target
will be to reduce our CO2
e emissions by 55% by 2032, using 2021/22 emissions as a baseline. We recognise the importance of
decarbonising our business and contributing to mitigating climate change.
Energy consumption
Energy consumption represented 8% of our total CO2
e emissions in 2022/23. 34.2% of our scope 1 and 2 emissions are from our
manufacturing and sales operations at our main site in Nottingham. Our current electricity mix at our main site and 135 UK retail stores
includes 97.4% of electricity from renewable sources. Whilst we continue to use a mixture of on-site solar and purchased green electricity
to supply our main site, as well as our 135 retail stores in the UK, our energy and carbon reduction activities are also focused on energy
efficiency measures and staff engagement. During 2022/23 we have:
• Continued to upgrade lighting to LED and PIR operation across our sites,
• Completed the commissioning of our new solar power array on Factory 2 of our main site (April 2023). This array has a peak
generation capacity of 263 kWp and, when combined with our existing array on Factory 1, will satisfy 7% of our main site's
electricity needs, and
• Replaced water heating systems for offices and toilet facilities to electric, enabling them to benefit from the on-site solar and
purchased renewable electricity.
In line with the Energy Savings Opportunity Scheme (ESOS), we are planning our Phase 3 audit for later in the calendar year. As part of this
audit we will be conducting a more in depth assessment of energy consumption, including factory HVAC systems, manufacturing machine
efficiency, and catering facilities. The findings of this audit will provide us with renewed understanding and opportunities to increase
energy efficiency further.
Plastics and packaging
Plastics are one of the main resources that we use in the production and supply of our products. Minimising any waste and ensuring that
the waste that is unavoidable is treated in the most sustainable way possible is therefore a key aspect of ensuring our business is as
sustainable as possible. This year we carried out a detailed review of waste in our production process. This review considered whether
plastic packaging is necessary, and, where it was, how we could increase recycling and resource efficiency. As a result of this review, we
launched a pilot programme in the UK to recycle old sprues and paint pots in our stores. The pilot programme launched in March 2023 and
we will monitor uptake before considering scaling the programme. We have also begun removing single use plastic packaging from our
boxed games and other products and replacing it with more sustainable alternatives.
Operational waste
We already employ a number of robust processes to promote responsible and sustainable management of our operational waste. This year
we changed our UK waste management provider to ensure we use experts that help us reduce waste to a minimum and increase the
reuse and recycling of waste that is unavoidable. Our operational waste plan has allowed us to reduce waste as far as we can, however
we won’t become complacent and will continue to explore ways to further reduce and recycle our operational waste and our use of non-
recyclable packaging.
People
The people that we work with are one of our greatest assets. Ensuring that we conduct our business in a socially responsible manner and
taking responsibility for ensuring people are treated with respect is important if we are to be around forever.
The enjoyment of all things Warhammer by our customers is our priority. By always conducting business in a responsible way, we will
ensure that Warhammer is a safe and fun experience for all.
Our objectives and efforts in this area are to support both our direct employees and the wider workforce of our supply chain so they feel
valued and respected, and to protect our customers who use our products or visit our stores or events.
23 Games Workshop Group PLC
DIRECTORS’ REPORT continued
People continued
Employees
Development and training
Our employees are constantly looking for ways to improve. We strive to create a culture and environment that encourages everyone to
achieve their potential.
We continue to invest in our learning and development offer, this year has seen our development team offer facilitated management
training to all managers globally offering for both development of skills and sharing of best practice. We will continue to grow our learning
content developed according to our needs as a business. We continue to encourage all employees to enhance their personal and
professional development.
All new starters who join Games Workshop around the world take part in a global induction process. This ensures that everyone who joins
us, regardless of country or role, receives a positive welcome, a consistent understanding of who we are and what we do and an
understanding of our culture. We have a strong culture built on the principles of honesty, courage, integrity, and inclusivity.
We continue to build partnerships with trusted apprenticeship schemes in the UK. These support, complement and enhance our staff
recruitment, retention and development, providing us with ‘home-grown’ employees with the right fit, knowledge and skills for our
business. We currently have apprentices working in positions across our manufacturing and engineering teams.
We continue to maintain and develop policies to ensure our business operates to high ethical standards. This includes our policy on anti-
bribery and corruption, which is applicable to all relevant employees. We also maintain favourable employment terms for our employees
which set out flexible working, where relevant.
People plan
We continue to carry out a group-wide people plan review on a six monthly basis. This plan is used to identify the jobs which are critical to
the ongoing success of Games Workshop and allow us to proactively plan for the future resource needs of the business, mitigate against
any resourcing risks and identify the development needs of our staff. The plan is critical to making sure that we have the right people, in
the right jobs, at the right time, both now and in the future.
Staff communications
We are always looking for ways to improve communication with our staff. We issue a monthly global newsletter to share all business
updates across all territories/departments on a regular basis. This newsletter helps keep all staff up to date on business updates. In
addition, we run quarterly senior management briefings to allow senior managers to brief all staff in their areas on significant business
updates. This forum also allows staff to ask questions of their senior management team. We continue to explore ways to integrate further
feedback mechanisms to ensure staff feel engaged, included and listened to.
Further details of how we engage with staff, and the effect of this is detailed in our section 172 statement on page 14.
Living wage
The Group maintains the UK national living wage for all UK employees, regardless of age.
Sharesave
The Group operates an employee sharesave scheme as a means of further encouraging the involvement of employees in the Group’s
performance.
Diversity
The board recognises that the business can benefit from a wide range of perspectives and backgrounds. The board, and the nomination
committee in particular, firmly believe that diversity plays a key role in promoting balanced decision making, through the sharing of a
variety of perspectives and insights that allow for effective strategy development. In defining the composition of the board, the board will
always meet its regulatory obligations, as well as take into consideration best practice and stakeholder expectations, while having regard to
the needs of the business.
This also forms part of our approach to encourage diversity, equity and inclusion among our workforce. All employees have had the
opportunity to undertake unconscious bias training and this is a mandatory part of the training for all new starters. This has helped to
reduce bias in respect of gender or ethnicity which might impact our search for the best person for every job. We have broadened our
range of advertising platforms to reach a wider pool of candidates with our recruitment process and ensure our adverts use inclusive
language. The board does not, however, consider that diversity can be best achieved by establishing specific quotas and targets.
24 Games Workshop Group PLC
Diversity continued
As at the end of the financial period:
Gender
2023
2022
Female
Male
Total
Female
Male
Total
The board (number of employees)
2
4
6
3
2
5
Senior management (FTE)
2
8
10
-
8
8
Total workforce (FTE)
622
2,078
2,700
611
2,032
2,643
Ethnicity
2023
Ethnic
minority
White
Total
The board (number of employees)
5
1
6
Senior management (FTE)
10
-
10
As a result of recent changes to the board, there are currently two women on our board, with an overall gender diversity level of 33%,
below the 40% set out in the Listing Rules. In 2021/22, 60% of our board members were women. However, following Sally Matthews’s
decision to step down from the board in November 2021, and more recently the retirement of Elaine O’Donnell in December 2022, the
overall board gender diversity has dropped to 33%. All appointments to the board are made on an objective and shared understanding of
merit and in line with required competencies and personal qualities relevant to the job.
Disability
The Group's policy is to consider, for recruitment, disabled people for those vacancies that they are able to fill. All reasonable adjustments
will be made for disabled workers, and all necessary assistance with training is provided. Arrangements are made, wherever possible, for
retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.
Health, safety and wellbeing
Protecting the health and safety of all our employees is fundamental to how we do business. With this in mind, we have continued to focus
on our key principles of leadership, managerial ownership and staff engagement.
Last year we launched our updated health and safety policy, which, whilst an evolution of our existing policy, reinforced our key health and
safety principles of leadership, managerial ownership and staff involvement. This year we ensured the policy was fully integrated across the
business and were pleased to see progress reflected in a reduction of recordable incidents. During the period, there were three injuries
reported under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 in the UK (2022: two), three cases
reported to the US Occupational Safety and Health Administration (2022: six) and six cases under other national legislation (2022: ten).
Under certain European regulations, we are required to report incidents occurring to staff on their commute to and from work - excluding
these, the numbers under other national legislation would be two cases for the current period (2022: eight).
Regular and routine safety tours by senior management, including the CEO, help to ensure that the subject continues to maintain the high
profile we believe it deserves, and furthers the staff engagement which is the bedrock of our health and safety system. This engagement,
together with continued roll-outs of our in-house, IOSH accredited, ‘Working Safely’ training at our UK sites, and the ‘OSHA 10’ programme
in the US, ensures we have staff who not only want to do the right thing, but also know what to do and when to do it.
Alongside the safety of our staff; their wellbeing and physical and mental welfare continues to be a priority. We are committed to creating
a culture where talking about physical and mental health is commonplace. We aren’t there yet, but we will continue to work to fully embed
a culture that is open and honest about mental health, working with our colleagues to understand their needs and build upon our strong
foundations.
We also recognise that there will be times in everyone’s lives, whether related to work or not, where they need additional support - in
these situations we want our people to receive the help they require wherever they are, whatever they’re doing and whenever they need
it. Our global employee assistance programme provider helps us to do this more effectively. Amongst other things, access in local language
through a mobile app improves accessibility for all employees, allowing our people to use this service whenever and wherever they may
need it.
Customers
Product safety
Our product safety and integrity team work closely with our design, manufacturing and sourcing teams to ensure that all products sold by
Games Workshop are developed, produced and purchased with safety in mind, so that they are safe for use by the intended customer. The
safety of our staff and customers is an absolute priority.
To ensure the quality and safety of our products, we have standard operating procedures in place which ensure high levels of product
quality and assurance. These policies are regularly reviewed and updated to ensure compliance with regulations and the high standards we
set ourselves. This year we have continued to update and revise our testing processes, focusing on identifying and eliminating any potential
issues as early as possible during the product development and production process.
We had no product recalls during the period.
25 Games Workshop Group PLC
DIRECTORS’ REPORT continued
Customers continued
Health and safety
Our stores are where many of our customers first come to learn about the Warhammer hobby, or chat with fellow hobbyists - it is essential
that they are safe places to visit. Our store managers know that the health and safety of their customers is paramount and follow a routine
audit programme throughout the year to ensure that our stores continue to meet the high safety standards we set for ourselves. We have
monitored local guidance throughout the last year to ensure we remain up to date with these requirements.
Suppliers
Ethical sourcing
We are committed to implementing effective controls to ensure good ethical sourcing standards throughout our supply chain. This
commitment is driven by the board throughout the entire Group and a commitment is expected of all who work for, or who supply, Games
Workshop. We continue to be a member of the ICTI Ethical Toy Program (ICTI ETP), an ethical sourcing programme which we use to
evaluate our suppliers’ ability to safeguard the rights and wellbeing of workers. The programme covers workplace safety, wage payments,
working hours, underage labour, freedom of association and the right to collective bargaining, non-discrimination, disciplinary practices,
forced labour and environment and chemical safety.
All suppliers of (i) products for resale by Games Workshop, and (ii) components and materials used within products being sold by Games
Workshop are required to become supplier members of this ethical sourcing programme and to be audited and maintain valid certification
in order to receive orders from Games Workshop. Our suppliers are subject to an annual audit programme to make sure that ethical
sourcing standards throughout the Games Workshop supply chain are maintained. Our suppliers are also subject to our supplier code,
which sets out minimum expected supplier standards.
Anti-slavery
Modern slavery is a crime and a violation of fundamental human rights. Allowing it to take place within an organisation, either consciously
or through complacency, results in extensive and unnecessary suffering - often in a way that disproportionately affects groups of the most
disadvantaged people. We are committed to acting ethically to implement and enforce effective systems and controls to ensure modern
slavery is not taking place within our operations or supply chains. This commitment is driven by the CEO and the board throughout the
entire Group and a commitment is expected of all who work for, or who supply into, Games Workshop.
Our modern slavery statement is available on our investor relations website. Further details of how we engage with suppliers can be found
in our corporate governance report on page 31. The effect of this is detailed in our section 172 statement on page 14.
Donations
Games Workshop does not make any donations to charities or political parties. In 2021/22 we introduced an allowance for all employees to
use two working days of their time to do work for their chosen charities. We are pleased to see that this year there has been an uptake of
this allowance.
Research and development
The Group does not undertake research activities. Development activities relate to the development of new product lines and animation.
The charge to the income statement for the period in respect of development activities is detailed in note 9 to the financial statements.
Future developments
The future developments for the Group are discussed in the strategic report on pages 3 to 15.
Financial risks
The financial risks facing the Group are set out in note 23 to these financial statements.
Going concern and viability statement
Assessment of prospects
The Group operates a strategic planning process which includes monthly reviews of business and financial performance, regular financial
projections and an annual planning review for the next financial period. Medium term projections (for periods ending two years and three
years hence) are reviewed taking into account known strategy changes in that time frame. The three year plan considers the Group’s
growth potential, cash flows and key financial ratios. This strategic planning process is managed centrally, led by the chief financial officer.
26 Games Workshop Group PLC
Going concern and viability statement continued
Assessment of viability
The strategic plan reflects the directors’ cautious view of possible outcomes. It is not used to set targets for performance. The directors
have considered a base case going concern model, a continuation of our current operations in line with budgeted growth, and then
modelled the scenarios set out below. Under these scenarios no additional funding is required and there would be no breach of banking
covenants as we currently have no funding facilities in place:
• Damage/disruption to our Memphis warehouse meaning we were unable to dispatch from the warehouse for a prolonged period. This
would result in disruption to sales across North America.
• Loss of main production factories at the head office site, in Nottingham, to a major incident resulting in a loss of premises, machinery
and tooling, impacting our ability to produce miniatures.
• A significant global disruption such as a pandemic, which would result in closure of warehousing and stores for two months impacting
sales in all channels.
The viability assessment has been conducted for a period of three years which is in line with the Group’s strategic planning period as
discussed above. The board believes that this time frame is the most appropriate as it is difficult to make meaningful projections beyond
three years. This assessment of viability has been made with reference to the Group’s current position and future prospects, its strategy
and its operational risks and the mitigation in place to manage them. In making the viability assessment the operational risks (see page 15)
facing the business have been considered and a number of severe but plausible scenarios assessed for the impact of these on the medium-
term projections. The principal risks disclosed on page 14 and 15 are not considered to have a material impact on viability. The scenarios
tested include those tested as part of our going concern review. Stress testing has been performed on the cash projections to determine
the extent to which sales can decline before the Group’s cash reserves become depleted to the point additional funding and cost
reductions would be needed. The results of this showed that the Group would need to increase the cost of all materials, production and
overheads while decreasing sales (compared to the base case) to such an extent that it is not considered to be a plausible scenario.
Viability statement
Based on the board’s assessment as described above and the Group’s strong balance sheet, the directors confirm that they have a
reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three year
period ending 1 June 2026.
Going concern
After making appropriate enquiries with the operational board, the directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial
statements. For this reason, they continue to adopt the going concern basis in preparing the Group’s and Company’s financial statements.
On behalf of the board
Ross Matthews
Company secretary
24 July 2023
27 Games Workshop Group PLC
CORPORATE GOVERNANCE REPORT
An introduction from our non-executive chair
I am pleased to introduce the corporate governance report where we set out our approach to governance and how the board and its
committees operate.
The board believes that Games Workshop's unique culture and values drive its performance, so we have a responsibility not to disrupt
these important elements of the Group’s success.
We always intend to comply with legislation and will comply or explain our position with regard to the UK Corporate Governance Code. Put
another way, we will obey the law and consider our position with regard to best practice, complying in nearly all cases but being willing to
defend a position that we feel is better for us and in line with our Group’s culture and values.
We spend time as a board establishing and reviewing our position on ESG and governance principles making what we hope are good,
nuanced judgements that balance the expectations of our stakeholders and what we believe is fundamental to our culture, values and
principles. We believe it acceptable to take time to consider the potential for unintended consequences of initiatives before declaring our
commitment to a position and we are instinctively reluctant to say we will deliver until we are certain that we can.
We have a small board with two executive directors, a non-executive chair and three further independent non-executive directors. These
six people have a balance of attitudes, knowledge and backgrounds to enable each director and the board as a whole to discharge their
duties effectively.
We conduct a board effectiveness review annually, which is externally facilitated every third year. Last year, we employed a third party to
conduct an external review. This year, we have conducted an internal review, which confirmed that we consider ourselves to be an
effective board.
Quarterly departmental engagement sessions are ongoing and deliver on the dual aims of senior managers communicating strategic and
operational messages to their teams and the creation of an opportunity for all staff around the globe to ask questions and engage in
discussion.
Engagement with shareholders continues to be led by Kevin and Rachel, our CEO and CFO, with other members of the board being
available on request. I will continue to act as the designated non-executive director for staff engagement, providing a conduit for the voice
of our staff to be considered during board meetings.
I am satisfied with the standards of governance that the board continues to maintain and build upon. The Code has been adopted as
required and the Company has complied with the Code save for the matters identified on page 32. All our directors will be seeking
reappointment at the AGM in September 2023.
John Brewis
Non-executive chair
The Listing Rules of the Financial Conduct Authority (FCA) require listed companies to disclose, in relation to the Code, how they have
applied its principles and whether they have complied with its provisions throughout the accounting period. The UK Corporate Governance
Code can be found at www.frc.org.
This statement, together with the remuneration report on pages 36 to 46, and further statements as referenced below, explains how the
Company has applied the principles and complied with the provisions set out in the Code.
Reporting requirement Where this is referenced in this annual report
Assessment of value over the long-term Strategy and objectives
Page 3
Understanding the views of other key stakeholders, as set out in
section 172
Section 172 statement
Page 14
Provision of means for the workforce to raise concerns in
confidence
Whistleblowing
Page 35
Details of meetings of the audit and risk committee
Significant issues considered by the audit and
risk committee
Page 33
Assessment of principal risks Risks and uncertainties
Page 14
Monitoring of risk management and internal control
Internal control
Risk management
Page 34
Page 34
Statement of going concern
Assessment of the prospects of the Group
Going concern and viability statement
Pages 26 and 27
28 Games Workshop Group PLC
The board operates through monthly meetings which senior executives attend on a regular basis. The board is responsible for leading and
controlling the Group and monitoring executive management. It considers all issues relating to strategy, management and future direction
of the Company. The board is also responsible for assessing and monitoring culture within the Group. During the year, John Brewis
continued to act as the designated non-executive director responsible for staff engagement. This is achieved through regular involvement
of the non-executive directors with a variety of employees across the Group and attendance at the quarterly staff departmental meetings.
The board has a schedule of matters reserved to it for decision that is regularly updated; these include decisions on the Group’s strategy,
financial plans, major capital expenditure and dividend policy. The board is updated about operational decisions through the monthly
meetings. It meets at least nine times a year. In 2022/23 the board had 10 scheduled meetings, each of which was attended by all
members of the board with the exception of Randal Casson and Kate Marsh who both attended nine meetings. Mark Lam was appointed
on 11 April 2023 and attended two meetings. Terms of reference for the board committees (as set out below) are available on the
Company’s website.
The Company maintains an appropriate level of director and officer liability insurance cover and has agreed to indemnify the directors
against certain liabilities as discussed in the directors’ report on page 16.
A review of the performance of the Group’s main business activities is included in the strategic review. The board presents this review,
together with the directors’ report on pages 16 to 27, to give a fair, balanced and understandable assessment of the Group’s position and
prospects.
The board
The board comprises the non-executive chair, the CEO, the CFO, and three further non-executive directors. It is chaired by John Brewis. The
biographies and prior experience of board members are set out on pages 16 and 17.
The non-executive directors have a breadth of successful commercial and professional experience and are considered by the board to be
independent of the Group.
Elaine O’Donnell stepped down from the board on 1 December 2022 - as she had served on the board for nine years (at 29 November
2022), two as chair. To facilitate an effective succession of the new chair, we extended her term to the 31 December 2022. Randal Casson
joined the board 1 July 2022 as a non-executive director and chair of the audit and risk committee and Mark Lam joined the board as non-
executive director on 11 April 2023 and has since been appointed as senior independent director.
All of the directors bring an independent judgement to bear on issues of strategy, performance, resources (including key appointments)
and standards of conduct. Both John Brewis and Elaine O’Donnell, as chair, were independent on being appointed to the board. The board
considers that it has been supplied with sufficient timely and accurate information to enable it to discharge its duties.
All members of the board have access to the services and advice of the company secretary. There is a procedure for directors to take
independent professional advice at the Company's expense where relevant to the execution of their duties. The executive directors attach
great importance to ensuring that the non-executive directors are provided with accurate, timely and clear information on the Group. In
addition, the non-executive directors are actively encouraged to continually update their knowledge of and familiarity with the Group and
the issues affecting it, so as to enable them to effectively fulfil their roles on both the board and its committees.
Board evaluation
In 2021/22 the board undertook an externally facilitated review of its performance, in addition to the board’s already established process
for the ongoing assessment of its own performance and that of its committees. This year, we conducted an internal board effectiveness
review, involving all the Company’s directors together with the company secretary.
The board concluded it was effective and considered that progress had been made by completing actions identified in the previous
external review. In 2023/24 we will develop the use of the Company’s investor relations website to provide additional visibility for some of
our judgements and explanation of the work we are doing on ESG and governance.
The next externally facilitated review will take place in 2024/25.
Board committees
The board has three principal committees, all with written terms of reference which are published on the Company’s website, and which
are available on application to the company secretary at the Company’s registered office. The company secretary serves as secretary to all
three committees. The chairs of the audit and risk committee, the remuneration committee and the nomination committee will be
available at the AGM to answer any questions.
29 Games Workshop Group PLC
CORPORATE GOVERNANCE REPORT continued
Audit and risk committee
The audit and risk committee currently comprises the non-executive directors and is chaired by Randal Casson who has significant relevant
financial and accounting knowledge and experience. Between Sally Matthews standing down in November 2021 and June 2022, Elaine
O’Donnell was both a member and interim chair of this committee. She ceased to be a member following the appointment of Randal
Casson as committee chair on 1 July 2022. The audit and risk committee’s terms of reference include monitoring the integrity of the
financial statements and other announcements relating to the Company’s financial performance including reviewing significant financial
reporting judgements, internal control and risk assessment and keeping under review the scope, results and effectiveness of the external
and internal audits and the independence of the Company’s external auditor.
Audit and risk committee report
A more detailed description of the activities of the audit and risk committee and the internal control and risk management systems that are
in place are discussed in the audit and risk committee report on pages 33 to 35.
Remuneration committee
The remuneration committee comprises the non-executive directors and chair of the board and is chaired by Kate arsh. Elaine O’Donnell
was a member of this committee from November 2021 until the appointment of Randal Casson in July 2022. The remuneration committee
normally meets at least three times a year and is responsible for making recommendations to the board on remuneration policy for all
executive directors and senior management (including determining specific remuneration packages, terms of employment and variable pay
performance incentive arrangements). The procedures and guidelines used by the remuneration committee in determining remuneration
are outlined in the separate remuneration report. The remuneration committee held four scheduled meetings in the year, which were
attended by all members of the committee. Executive directors attend by invitation and the committee meets without the executive
directors at least annually to appraise the executive directors’ performance.
Remuneration report
The Company’s policy on executive remuneration and details of the executive directors’ salaries, profit share and pensions, and fees for the
non-executive directors are set out in the board report on remuneration on pages 36 to 46.
Nomination committee
The nomination committee comprises the non-executive directors and was chaired by Elaine O’Donnell until 1 December 2022, then by
John Brewis. It is responsible for nominating, for approval by the board, candidates for appointment to the board. The committee regularly
reviews the structure, size and composition (including the skills, knowledge, experience and diversity) of the board and gives consideration
to succession planning for directors and other senior executives, taking into account the challenges and opportunities facing the Group and
the skills and expertise needed on the board in the future.
As CEO, Kevin Rountree was invited to attend a meeting of the committee and present his current senior management team structure and
to discuss succession planning. Succession planning for the executives and the senior management team will always be a key business risk
and the committee has committed to reviewing progress on this going forward. The committee held four scheduled meetings in the year
which were attended by all members of the committee. Kevin also meets John monthly and succession planning is an ongoing topic.
Appointments to the board
After announcing that Elaine O’Donnell was stepping down from the board in December 2022, after completing nine years with two years
as chair, the nomination committee ran a process to appoint a new non-executive chair as well as a process to find a new non-executive
director. Finding the right people has always been one of our biggest challenges, including for our board. We take our time to ensure that
we run a process free from any bias and we hold our resolve to never compromise our high standards of cultural fit when assessing
potential candidates. Sometimes this means that the recruitment process can become quite elongated - but we believe that it is always
better to do what is right than what is easy. After an extensive search process, including external search and open advertising, John Brewis
was appointed as non-executive chair on 1 January 2023. A further recruitment process resulted in Mark Lam joining the board as a non-
executive director on 11 April 2023. Mark was confirmed as senior independent director in May 2023. Kate Marsh was appointed chair of
the remuneration committee on 11 April 2023.
Newly appointed directors are given appropriate training and non-executive directors meet regularly with members of the executive and
other staff within the Group. In addition, site visits ensure that the non-executive directors gain first-hand experience of developments
within the Group.
Any director appointed during the year is required, under the provisions of the Company’s articles of association, to retire and seek
election by the shareholders at the next AGM.
30 Games Workshop Group PLC
Stakeholder engagement
The Company understands the importance of engaging with our stakeholders. The board seeks to understand the views and interests of
the stakeholder groups detailed below to ensure that these are always considered as part of any decision making.
Shareholders
We maintain an open dialogue with our shareholders. On a continuing basis the Company encourages two-way communication with its
institutional and private shareholders and responds promptly to queries received verbally, in writing or directly through its investor
relations website, investor.games-workshop.com or through brokers. In addition to the annual report and half yearly report, the non-
executive chair, committee chairs and the CEO and CFO are available to meet and do meet with shareholders and potential shareholders to
discuss any questions they may have and ensure that the board has a clear understanding of the views of shareholders. Any issues arising
at such meetings are reported to and considered by the board. In 2022/23 matters discussed were in relation to performance of the Group
throughout the year. We try to ensure our shareholders have a good understanding of our strategy, business model and culture.
Our people
We rely on the hard work and creativity of our employees to make sure we drive the creation of value in the long term. We engage with
our employees through formal and informal meetings, and through the quarterly departmental meetings as well as the monthly staff global
newsletters. Throughout the year, members of the board have attended the quarterly briefing meetings to help increase board
engagement and visibility with employees. John Brewis continued his role as designated non-executive director for staff engagement. He
continues to undertake this role since becoming chair. John has many years of experience of workforce engagement in a manufacturing
environment and has, over the past year, engaged with staff by reviewing a staff survey, attending briefings, visiting factories, warehouses,
retail stores and sales offices in both the UK and North America.
Customers
We engage with our customers through our retail stores, our social media sites, and through warhammer-community.com. This allows
two-way communication with our customers. Any recurring topics or points of note are shared with and considered by the board. Senior
management also visit retail stores as well as independent retailers to help understand customer views.
Suppliers
The integrity of our supply chain is an essential part of ensuring we design and make great products. Although as a vertically integrated
group we are in control of large parts of the design and manufacturing process, it is important that our suppliers share the same standards
and ethics as we do. As discussed on page 26, we are committed to implementing effective controls to ensure good ethical sourcing
standards throughout our supply chain. We have strong partnerships with our key suppliers that have been built up over a number of years
to ensure we get the best materials through a stable, reliable and responsible supply chain.
Culture
Companies are run by people. Games Workshop is run by people. How our people get on with the task of running Games Workshop and
how they get on with one another is vital.
How we behave does matter. Therefore, what we are like does matter.
This is why we make such efforts to recruit people who are likely to have the right qualities to be successful at their job. Everything we do is
for the good of Games Workshop, and thereby our customers and colleagues and shareholders. No one’s personality is bigger than that;
none of us is more important than this ultimate goal. This is a huge challenge and it requires lots of humility, honesty and courage. That is,
humility in recognising we must put Games Workshop’s needs first, honesty to identify truly those occasions when we are being driven by
our ego or our selfishness, and courage to do something about it.
It is always better to work amongst nice people and to have fun. We love that too. However, the behaviours we are looking for are these –
consistency, clarity, firmness, fairness, openness and integrity. What we ultimately mean by ‘good behaviour’ is evidenced by what we
would expect to see:
• an absolute belief that it is better to do what is right rather than what is easy;
• a determination to be cheerful and confident and passionate about this, the best of all jobs;
• an ego-free environment - this leads to people who put the business first and don’t have private agendas, people who welcome
newcomers that bring the skills we need, people who can criticise themselves and our business but are justly proud of their own
and our business’s achievements; and
• an absolute commitment to the niche market business model and the quality of our products and services.
Conflicts of interests
The Company’s articles of association take account of certain provisions of the Companies Act 2006 relating to directors’ conflicts of
interests. These provisions permit the board to consider, and if thought fit, to authorise situations where a director has an interest that
conflicts, or may possibly conflict, with the interests of the Company. The board has adopted procedures for the approval of such conflicts.
The board’s powers to authorise conflicts are operating effectively and the procedures are being followed.
31 Games Workshop Group PLC
CORPORATE GOVERNANCE REPORT continued
Substantial shareholdings
The following interests in 3% or more of the issued share capital of the Company as at 28 May 2023 have been disclosed to the Company:
The Company has not been notified of any changes in these interests since the period end. The Company has not been notified of any other
substantial shareholdings.
No. of shares
%
Baillie Gifford
4,196,784
12.8
BlackRock
2,225,114
6.8
Schroder Investment Management
1,646,014
5.0
Vanguard Group
1,547,368
4.7
abrdn
1,354,641
4.1
Capital Group
1,037,079
3.1
Statement of compliance with the UK Corporate Governance Code
The Company has complied with all of the provisions set out in the Code, with the exception of the following:
• Provision 24 - the period to June 2022 during which Elaine O’Donnell acted as both chair of the board and as interim chair and a
member of the audit and risk committee as detailed on page 30.
• Provision 19 - the days Elaine O’Donnell served beyond nine years from her date of first appointment as detailed on page 29.
On behalf of the board
John Brewis
Non-executive chair
24 July 2023
32 Games Workshop Group PLC
AUDIT AND RISK COMMITTEE REPORT
The report details the role of the audit and risk committee and the work it has undertaken during the year as well as its meeting in July
2023 when this annual report and financial statements were approved.
Committee membership
The audit and risk committee currently comprises the three non-executive directors and is chaired by Randal Casson. In the period
between November 2021 and 1 July 2022 Elaine O’Donnell, chair of the board, served as interim chair of the audit and risk committee. She
ceased to be a member of the committee on the appointment of Randal Casson on 1 July 2022. The board considers that as serving chairs
during the year up to publication of this annual report, each of Randal Casson and Elaine O’Donnell have recent relevant financial
experience by virtue of their professional qualifications and their previous executive roles. Members of the committee can also
demonstrate a breadth of experience across the manufacturing, IT and media sectors through their current and previous roles.
Significant issues considered by the audit and risk committee
The committee had four scheduled meetings during the year which were attended by all members of the committee. It has an agenda
linked to the events in the Group’s financial calendar. The external auditor met with the committee without management being present
and the chair and members of the committee have direct contact with the audit partner as required. During the year the committee:
• reviewed the half year and full year results;
• received and considered, as part of the review of the annual financial statements, reports from the external auditor in respect of the
auditor’s Group audit plan for the year and the results of the annual audit. These reports included the scope of the annual audit, the
approach adopted by the auditor to address and conclude upon key estimates and other key audit areas, the basis on which the
auditor assesses materiality, the terms of engagement for the auditor and an ongoing assessment of the impact of future accounting
developments on the Group;
• considered whether the annual report is fair, balanced and understandable. In doing so, the committee reviewed and discussed with
management the content and appropriateness of the information included within the 2023 annual report. This provided the
committee with the supporting detail to ensure that it was in a position to report to the board that the 2023 annual report, taken as a
whole, was fair, balanced and understandable. This was on the basis that the business description, business model and strategy
agreed with its own understanding of the Group, and the balance in the reporting of performance reflected both positive and negative
issues and reflected the Group’s activities during the year;
• considered the effectiveness and independence of the external auditor. The auditor specifically demonstrated professional scepticism
and challenged management assumptions;
• made a recommendation to the board to re-appoint KPMG as external auditor;
• reviewed and challenged the level of the 2022/23 audit fee proposed by the auditor;
• reviewed the Company’s policy on non-audit fees and ensured appropriate safeguards are in place;
• considered and agreed the internal audit work programme and received regular reports on the key issues arising from its
implementation during the year; and
• reviewed reports on the key business risks, including a review of the internal control processes used to identify, monitor and mitigate
the principal and emerging risks and uncertainties.
The committee received, reviewed and challenged reports from management and the external auditor setting out the key areas in relation
to the 2023 annual report and made their own assessment. These issues were discussed and challenged with management during the year.
They were also discussed with the auditor at the time the committee reviewed and agreed the auditor’s Group audit plan and at the
conclusion of the audit of the financial statements. The areas that were discussed were:
• ESG and climate risk disclosures.
The committee formally meets at least three times a year with the executive directors and internal auditor. The external auditors are
invited to join twice a year. The external and internal auditors are given the opportunity to raise any matters or concerns they may have in
the absence of the executive directors at separate meetings with the audit and risk committee or its chair.
During the period, KP G’s audit of the 2022 annual report and accounts was reviewed by the FRC’s Audit Quality Review team as to the
quality of communication with the audit committee and certain matters relating to planning, completion, ethics and quality control. The
scope of their inspection also covered core revenue recognition, inventories, cash and cash equivalents, journal entry testing and first-year
audit procedures. We discussed the inspection report with the audit partner and note that actions to address the findings were
incorporated into the audit of the 2023 annual report.
33 Games Workshop Group PLC
AUDIT AND RISK COMMITTEE REPORT continued
Auditor’s independence
The committee reviews the independence of the external auditor by assessing the arrangements for the day-to-day management of the
audit relationship as well as reviewing the auditor’s report which describes their procedures for identifying and reporting conflicts of
interest. To maintain the auditor’s independence, the committee has also established the policy that the primary role of the external
auditor is to perform services directly related to their audit responsibilities. Any non-audit services would have to be approved by the
committee. Non-audit fees paid to the auditor amounted to £nil in the period. The Group uses other advisers for taxation advice and other
services. The audit fees are disclosed in note 9.
The audit and risk committee considers the re-appointment of the external auditor each year, as well as remuneration and other terms of
engagement. In 2020/21, the committee ran a comprehensive and competitive audit tender process. The decision to appoint KPMG as the
new auditor to the Group was ratified at the 2021 and 2022 AGMs. The committee now recommends the re-appointment of KPMG as
external auditor at the 2023 AGM. There are currently no contractual obligations which restrict the choice of external auditor.
Internal control
The directors recognise that they have overall responsibility for ensuring that the Group maintains a sound system of internal control to
safeguard shareholders’ investment and the Group’s assets, and for reviewing its effectiveness. The system is designed to manage risks
that may prevent the Group from achieving its business objectives, rather than to eliminate these risks. However, even the most effective
system can provide only reasonable, and not absolute, assurance against material misstatement or loss.
The directors have established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group, which
has been in place from the start of the period until the date of approval of this report. This process is regularly reviewed by the committee
and the board throughout the year.
The effectiveness of the Group's system of internal control is regularly reviewed by the committee and the board. The review covers all
material controls, including financial, operational and compliance controls and risk management. The monitoring of control procedures is
achieved through regular review by the CFO and the company secretary, reporting to the committee and to the board. This review process
considers whether significant risks have been identified, evaluated and controlled and whether any significant weaknesses are promptly
remedied and indicate a need for more extensive monitoring. Regular reporting by senior management ensures that, as far as possible, the
controls and safeguards are being operated appropriately. This process is considered by the audit and risk committee alongside the
adequacy of the risk management and internal control systems, and the external and internal auditors’ reports. The internal control and
risk management systems are considered to be appropriate.
The Group has continued its programme of internal audit reviews during the year. The audit and risk committee agrees an annual internal
audit plan, focusing on business specific issues. Actions agreed by management, in response to recommendations made, are followed up.
The board, with advice from the audit and risk committee, has completed its annual review of the system of internal control and is satisfied
that it has acted appropriately and in accordance with that guidance. During the course of its review of the system of internal control, the
board has not identified nor been advised of any failings or weaknesses which it has determined to be significant. Therefore, a
confirmation in respect of necessary actions is not considered appropriate.
Internal audit
The internal audit team follows a programme of activities that are closely aligned with principal operational risks. Activities are conducted
either by a dedicated internal auditor, an internal team that is independent of the area under review or by an external party, decided on a
case by case basis. In all cases the review is conducted on behalf of the committee and reports back to them. Reports were discussed with
the committee and a remediation plan agreed by management to improve controls where appropriate. Over the year, nine internal audit
reviews were completed. The committee can confirm that the quality, experience and expertise of the function is appropriate.
Risk management
The committee is responsible for assessing the scope and effectiveness of the systems established by management to identify, assess,
manage and monitor financial and non-financial risks. A description of the principal risks and the strategies to manage these risks is
included on page 14.
Throughout 2022/23 work has been ongoing to measure the impact of each operational risk to better understand the mitigating actions
necessary alongside progress made on each of these actions. The committee is satisfied that good progress has been made on the
development of the risk register throughout the year. In addition, there has been good progress made on the documentation of controls
and testing of the key operational risks within the internal audit programme in the year. The committee expects that this programme will
continue to evolve further throughout 2023/24.
34 Games Workshop Group PLC
Process for preparing consolidated financial statements
The Group has established internal control and risk management systems in relation to the process for preparing the consolidated financial
statements. The key features of these systems are:
• Management regularly monitors and considers developments in accounting standards and best practice in financial reporting and
reflects developments in the financial statements where appropriate. The external auditor also keeps the committee apprised of these
developments.
• The committee and the board review the draft financial statements. The committee receives reports from management and the
external auditor on significant judgements, changes in accounting policies, changes in accounting estimates and any other appropriate
changes to the financial statements.
Anti-bribery and anti-corruption
Bribery and corrupt practices are never tolerated in the pursuit of Games Workshop’s business objectives or goals, or within business
relationships, or the actions of its employees and associated parties. This commitment is driven from the chief executive and the board
throughout the entire Group and a commitment is expected of all who work with the Group and who act on our behalf or are employed or
engaged in any capacity by us. The Games Workshop anti-bribery policy reflects Games Workshop’s zero tolerance approach to acts of
bribery.
Suppliers are also required to follow an ethical sourcing audit programme, detailed on page 26, of which Games Workshop is a buyer
member.
Whistleblowing
The board is responsible for the review of the Company’s procedures for responding to the allegations of whistleblowers alongside input
from the audit and risk committee. Whistleblowing arrangements are in place to enable staff who may, in confidence, want to raise
concerns about possible financial reporting irregularities amongst other concerns. If an employee does not feel comfortable reporting any
potential, suspected, attempted or actual breaches of company policy, they can report such activity to Games Workshop’s chair of the
audit and risk committee using a dedicated whistleblowing email address. Staff can report any concerns via an online portal without
disclosing their identity should they wish to. This whistleblowing procedure is communicated to staff within relevant employee policies.
Games Workshop endeavours to protect those who make disclosures of wrongdoing. Any reports made in good faith will be dealt with in
confidence (to the extent possible), and the reporting employee shall not be discriminated against as a result of their actions.
On behalf of the board
Randal Casson
Audit and risk committee chair
24 July 2023
35 Games Workshop Group PLC
REMUNERATION REPORT
Introduction
The remuneration report for the period ended 28 May 2023 has been prepared on behalf of the board by the remuneration committee in
accordance with the requirements of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended, and meets the relevant requirements of the Listing Rules of the Financial Conduct
Authority and the UK Corporate Governance Code.
This remuneration report consists of two parts:
• The annual report on remuneration, which sets out payments made to executive directors and non-executive directors and details the
relationship between company performance and remuneration for the 2022/23 financial period and the activities of the remuneration
committee. This 2022/23 report is subject to an advisory vote at the 2023 AGM.
• The directors’ remuneration policy, which sets out the Company’s policy on directors’ remuneration which was approved by over 80%
of shareholders who submitted a proxy vote at the 2021 AGM, at which date it became effective and continues to be extant.
Review of the period
Company performance
2022/23 core sales of £445.4 million (2021/22: £386.8 million) was another record sales performance, with growth of 15%, delivering
record profit before tax of £170.6 million (2021/22 £156.5 million). Earnings per share has also reached over £4 for the first time in our
history. This performance was delivered despite external inflationary cost pressures and is the result of the effort and skill of the dedicated
team at Games Workshop.
Shareholder dividends declared were also at record levels in 2022/23 rising to 415 pence per share from 235 pence per share in the prior
period.
Group-wide remuneration
A pay increase was applied on 1 June 2022 which averaged 3% across all staff, except for the two executive directors. Going forward into
2023/24, a 5% increase has been agreed by the committee for the wider workforce (except for the two executive directors) taking effect
from 1 June 2023 and the Group again reaffirmed its commitment to paying the UK national living wage (increasing to £11 per hour) which
took effect from April 2023.
Senior management bonus
As a result of discussions between Kevin Rountree and the committee, the committee agreed to support a discretionary bonus payable in
cash, to a number of individual managers who contributed to the Company’s outstanding performance. The committee was pleased to
support this proposal in recognition of the effort and skill required to deliver the above record results.
Group Profit Share Scheme
Under the remuneration policy approved at the 2021 AGM, all eligible employees (excluding the executive directors) are included within
the Group Profit Share Scheme. Cash payments were made to eligible staff in December 2022 and May 2023 under the Group Profit Share
Scheme. For 2022/23 each eligible employee received a total of £4,000 (2022: £3,500) – in total £11.6 million (2022: £9.9 million).
Exceptional Bonus Award
In 2021, in consultation with shareholders, the committee undertook to articulate exceptional performance and to appropriately exercise
its discretion in making any Exceptional Bonus Award in future years. This remains true in the 2022/23 financial period.
When considering the potential payment of an exceptional bonus, the committee applies discretion to a suite of financial indicators
including growth, margin, Group profit, earnings per share, cash generation and dividend payments made. If performance against this
basket of criteria is exceptional, the Group will have generated sufficient profit and cash to have paid dividends to shareholders and
appropriate cash payments to all staff under the Group Profit Share Scheme.
For the financial and operational performance reasons outlined above, particularly the continued growth in core sales from £386.8 million
in 2021/22 to £445.4 million in 2022/23 and growth in profit before taxation from £156.5 million in 2021/22 to £170.6 million in 2022/23,
combined with the delivery of record levels of dividend payments and the award of the Group Profit Share, the committee agreed that the
threshold for proven, exceptional performance has been reached in 2022/23. The committee applied discretion and deemed it appropriate
to award each of the executive directors an Exceptional Bonus Award of 100% of base salary of the 150% maximum allowed under the
shareholder approved policy. Each executive director must purchase Company shares with 67% of such cash bonus after any tax
settlement. The bonus for 2022/23 will be paid in July 2023.
The remuneration committee notes that the current remuneration policy cannot fully address the shortfall in total compensation for
executive directors compared to the majority of FTSE 250 peers because neither the committee nor the executives themselves believe that
LTIPs are in line with Games Workshop’s culture and values.
The remuneration committee retains its discretion to assess ‘exceptional’ going forward and reaffirms its promise to exercise its discretion
appropriately and to explain the circumstances where an Exceptional Bonus Award is paid, outlining the criteria - as above.
36 Games Workshop Group PLC
The committee
Looking to the future, the committee will continue to monitor the consistency of the remuneration policy across the Group with a view to
ensuring that an appropriate reward structure exists to recognise and retain our key executives. As part of this process the committee will
continue to keep under review and discuss regularly, the effectiveness of the Company’s approach to remuneration and its component
parts.
The committee will continue to engage key stakeholders in order to consider any modifications which should be made beyond the 2020/21
changes to executive base pay or the operation of the Group Profit Share Scheme and the Exceptional Bonus Award described within this
report, which we submit to shareholders for an advisory vote at the 2023 AGM.
Kate Marsh
Remuneration committee chair
24 July 2023
Annual report on remuneration
Remuneration policy
This part of the report sets out the directors’ remuneration policy, which was approved by shareholders at the 2021 AGM and has
remained unchanged during 2022/23.
The aim of the Group’s remuneration policy is to reward fairly and to attract, motivate and retain high quality management. The total size
of the remuneration package for executive directors is judged by and compared with the remuneration packages of similar companies,
having regard to:
• the size of the company, its turnover, profits and number of people employed
• the diversity and complexity of the business
• the geographical spread of the business
• the growth and expansion profile
Under our terms of reference, the remuneration committee is able to employ remuneration consultants to provide reference and advice,
which is subject to independent evaluation by the committee. During 2022/23, no remuneration consultants were employed to review
executive rewards.
The Company’s non-executive directors are remunerated with fees in line with market rates. They do not receive any pension or other
benefits, other than the reimbursement of reasonable expenses, and they do not participate in any bonus or share schemes.
Remuneration policy table
The table below summarises each of the components of the remuneration package for directors of the Company which comprise the policy
approved at the 2021 AGM. The committee may make minor changes to the policy, which do not have a material advantage to the
directors, to aid its operation or implementation, taking account of the interests of shareholders but without the need to seek shareholder
approval.
Component
Purpose and link to strategy Operation Maximum potential value Performance metrics
Salary
Core element of fixed
remuneration, reflecting the
size and scope of the role.
Purpose is to recruit and
retain directors of the
calibre required for the
business.
Reviewed annually and usually
fixed for 12 months from 1
June. There is no entitlement
to an annual increase.
Takes into consideration the
director’s role and attitudes.
Takes into account prevailing
market conditions and is
aligned with staff pay reviews.
Externally benchmarked by
independent remuneration
consultants from time to time
against companies of a similar
size and complexity.
There is no prescribed
maximum annual increase in
salary.
Salaries are reviewed taking
into consideration salary
increases across the Group.
Increases out of line with the
workforce are carefully
considered but may be
awarded taking all relevant
factors into account, for
example, increases in scope
and responsibility or salary
falling significantly below
market positioning.
Not applicable,
although the
individual’s
contribution and
overall performance is
one of the
considerations in
determining the level
of any salary increase.
37 Games Workshop Group PLC
REMUNERATION REPORT continued
Remuneration policy table continued
Component
Purpose and link to strategy
Operation
Maximum potential value
Performance metrics
Benefits
Ensures the overall package
is competitive.
Purpose is to recruit and
retain directors of the calibre
required for the business.
Participation in the
sharesave scheme creates
staff alignment with the
Group and promotes a sense
of ownership.
The executive directors each
receive life assurance cover.
The sharesave scheme is a
HMRC approved monthly
savings scheme facilitating
the purchase of shares at a
discount.
Where appropriate other
benefits may be offered
including allowances for
relocation and other
expatriate benefits.
Set at a level which the
committee considers
appropriate against the
market and provides a
sufficient level of benefit
based on individual
circumstances.
Sharesave contributions are
as permitted in accordance
with the relevant tax
legislation.
Not applicable.
1
Up to 8.5%
of salary up to a
maximum of £10,000 per
annum. Subject to changes
in pension tapering by
HMRC, any excess between
up to 8.5% of salary and
£10,000 is paid as additional
salary (net of employers’
national insurance).
Pension
To provide cost effective
retirement benefits.
Participation in a group
personal pension scheme.
Not applicable.
Exceptional
Bonus Award
Rewards exceptional
performance.
Any pay-out is determined by
the committee after the
period end, based on
performance.
Awards are payable in cash
with 67% of the net amount
required to be invested in the
Company’s shares, with an
expectation that these are
held for at least three years.
Maximum potential value is
150% of base salary.
The payment is at the
discretion of the
committee based on
exceptional financial
and operational
performance being
achieved during the
year.
Non-executive
directors’ fees
Sole element of non-
executive director
remuneration is set at a level
that reflects market
conditions.
Fees are reviewed annually
taking into account time
commitment, responsibilities
and fees paid by comparable
companies.
Additional fees are paid to the
chair of the relevant board
committees to reflect
additional responsibilities.
Non-executive directors are
entitled to claim reasonable
out of pocket expenses in
connection with the
performance of their duties.
Fees are based on the level
of fees paid to non-
executive directors serving
on boards of listed
companies of a similar size
and complexity.
Not applicable.
1
During the period, Rachel Tongue passed a service anniversary which entitles her to receive an increased pension contribution of 8.5% of salary (up from 7.5%). This service
criteria applies to all employees in the UK pension scheme.
Changes to the remuneration policy
As described in the first section of this remuneration report, under the policy approved at the 2021 AGM, no changes have been
implemented during the period.
Explanation of the performance metrics chosen
The performance measures selected are aligned with the Company’s strategy and business objectives. The remuneration committee
considers a basket of financial measures when applying discretion to any payments under the terms of this policy.
38 Games Workshop Group PLC
Illustration of application of the policy
The charts below show the relative split of remuneration between fixed pay (base salary, benefits and pension) and variable pay
(Exceptional Bonus Award) for each executive director on the basis of minimum remuneration, remuneration receivable for performance in
line with the Company’s expectations and maximum remuneration.
Kevin Rountree Rachel Tongue
£ 000
1,733
Fixed Variable
Fixed Variable
1750
1750
58%
1500
1500
1250
1250
1,158
1000
1000
58%
720720
750
750
100% 100%42%
483483
500
500
100% 100%42%
250
250
0
0
Fixed pay Target Maximum
Fixed pay Target Maximum
Minimum
In line with
expectations
Maximum
Fixed pay
Fixed elements of salary, benefits and pension. Salary is
at 28 May 2023 and the value of benefits is equivalent
to that included in the single figure remuneration table
on page 41.
As per minimum
As per minimum
Exceptional Bonus Award
Nil Nil
150%
Remuneration committees
The remuneration committee is appointed by the board and comprises Kate Marsh (chair), John Brewis, Randal Casson and Mark Lam. The
remuneration committee is responsible for setting the remuneration packages of the executive directors as well as approving their service
contracts. The terms of reference for the committee is available on the Company’s investor relations website.
Differences in policy from the wider employee population
The Company aims to provide a remuneration package that is market competitive, complies with any statutory requirements and is applied
fairly and equitably across the wider employee population. Where remuneration is not determined by statutory regulation, the Group
operates the same core principles for the wider employee population as it does for the executive directors, namely:
• to remunerate people in a manner that allows for stability of the business and the opportunity for sustainable long-term growth
• to seek to remunerate fairly and consistently for each role with due regard to the marketplace and internal consistency
• to apply the profit share equally to all employees (excluding the executive directors)
• to encourage employees to own shares through the operation of the sharesave scheme.
As is common practice, the Company has introduced elements of variable pay through an Exceptional Bonus Award which is focused on the
executive directors to ensure that the overall remuneration policy remains market competitive.
Remuneration policy for new directors
When setting the remuneration package for a new executive director, the committee would seek to apply the same principles and
implement the policy framework as set out above. Base salary will be set at a level appropriate for the role and the experience of the
director being appointed. Benefits, pension and the Exceptional Bonus Award will be in line with the stated policy. Any buy-out award,
should one be required, would be limited to the amount of salary that would be foregone.
Non-executive director fees will be set at a competitive market level, reflecting the skills, knowledge, experience, responsibilities and time
commitment required. An additional fee will be added for additional responsibility of chairing a board committee or undertaking the role of
senior independent director.
39 Games Workshop Group PLC
£ 000
REMUNERATION REPORT continued
Directors’ service contracts and letters of appointment
Executive
Date of contract
Unexpired term of contract
Notice period
Kevin Rountree
25 February 2009
Rolling contract
12 months
Rachel Tongue
25 March 2015
Rolling contract
12 months
Non-executive
Date of appointment
Date of last re-election at an AGM
Notice period
1
Elaine O’Donnell
28 November 2013
21 September 2022
6 months
John Brewis
20 June 2018
21 September 2022
6 months
Kate Marsh
24 July 2019
21 September 2022
6 months
Randal Casson
1 July 2022
21 September 2022
6 months
Mark Lam
11 April 2023
-
6 months
1
Elaine O’Donnell stepped down on 31 December 2022
In accordance with best practice and as set out in the Code, notice periods in new service contracts for executive directors are set at one
year. Non-executive director appointments are made through letters of appointment for a one-year term, subject to election and re-
election by the Company’s shareholders in accordance with the Company’s articles and the Code. The letters of appointment may be
inspected at the Company’s registered office.
Policy on payment for loss of office
If an executive director’s employment is to be terminated, the committee’s policy in respect of the service agreement (in the absence of a
breach of the service agreement by the director) is to agree a termination payment based on the value of base salary and contractual
pension and other benefits that would have accrued to the director during the contractual notice period. Depending on the particular
circumstances, a director may work the notice period, be placed on garden leave for some or all of the notice period or receive a payment
in lieu of notice in accordance with the service agreement. The committee will consider mitigation to reduce the termination payment to a
leaving director when appropriate to do so, having regard to the specific circumstances.
Non-executive directors’ appointments may be terminated without compensation but with six months’ notice.
External appointments
The executive directors may each accept one external appointment with the prior approval of the board, from which any fees may be
retained. At present, neither of the executive directors hold any outside directorship.
Consideration of employment conditions elsewhere in the Group
The Group aims to provide a remuneration package to all employees that is market competitive, complies with any statutory requirements
and is applied fairly and equitably across the employee population, taking into account local employment market conditions.
The committee takes into account the general basic salary increase being offered to employees elsewhere in the Group when annually
reviewing the salary increase and remuneration of the executive directors. Employees are not consulted in respect of board remuneration.
The committee also reviews general workforce remuneration and the alignment of incentives with Games Workshop’s culture to ensure it
remains appropriate.
Consideration of shareholder views
The committee takes into account shareholder feedback received on remuneration matters, including comments in relation to the
resolutions at the AGM in addition to any additional comments in correspondence received directly by the Company. The committee would
seek to engage directly with major shareholders should any material changes be made to the policy.
40 Games Workshop Group PLC
Annual report on remuneration (subject to audit)
The tables below set out in a single figure the total remuneration, including each element, for each person who served as a director of the
Company during the financial periods ended 28 May 2023 and 29 May 2022.
52 weeks ended 28 May 2023
Pension related
Total fixed
Exceptional
Total variable
Salary/fees
benefits
pay
Bonus Award
pay
Total
£000
£000
£000
£000£000
£000
Kevin Rountree 7155
720
675
675
1,395
Rachel Tongue 4785
483
450
450
933
1
Elaine O’Donnell
84
-
84
- -
84
John Brewis 96-
96
- -
96
Kate Marsh 54 -
54
- -
54
2
Randal Casson
49
-
49
- -
49
3
Mark Lam
8
-
8
- -
8
Total 1,48310
1,493
1,125 1,125
2,618
1
Elaine O’Donnell stepped down from the board on 31 December 2022
2
Randal Casson was appointed to the board on 1 July 2022
3
Mark Lam was appointed to the board on 11 April 2023
52 weeks ended 29 May 2022
Total variable
pay
Pension related
Total fixed
Exceptional
Total
Salary/fees
benefits
pay
Bonus Award
£000
£000
£000£000£000£000
Kevin Rountree 716
4
7206076071,327
Rachel Tongue 476
4
480405405885
1
Nick Donaldson
-
-
- - - -
Elaine O’Donnell144
-
144- - 144
John Brewis 62
-
62- - 62
Kate Marsh 54
-
54- - 54
2
Sally Matthews
53
-
53- - 53
Total 1,505
8
1,513 1,012 1,012 2,525
1
Nick Donaldson retired from the board on 31 May 2021
2
Sally Matthews stepped down from the board on 28 November 2021
The figures in the single figure tables above are derived as follows:
Salary/fees - the amount of salary/fees received in the period including any additional salary due in excess of the pension tapering limits.
Pension related benefits - the cash value of pension contributions received by the executive directors. This includes the Company’s
contribution into the group personal pension scheme.
Exceptional Bonus Award - 67% of the maximum potential award of 150% of salary was accrued in relation to performance in 2022/23 and
60% in relation to 2021/22.
No taxable benefits, payments for loss of office or sharesave option benefits were paid during 2022/23 and 2021/22.
CEO remuneration
Total remuneration
£000
% of maximum exceptional
bonus award paid
% of maximum profit share
2
paid
Period CEO
2023Kevin Rountree
1,395 67n/a
2022Kevin Rountree
1,327 60n/a
2021Kevin Rountree
1,27210050
2020Kevin Rountree
66720100
1
1,077
2019Kevin Rountree
20
100
2018Kevin Rountree
438100100
2017Kevin Rountree
401n/a 100
2016Kevin Rountree
402n/a -
2015Kevin Rountree
168n/a -
3
Tom Kirby
2015
291n/a -
2014Tom Kirby
511n/a -
1
Remuneration to Kevin Rountree included Exceptional Bonus Awards for 2017/18 (£410,000) and 2018/19 (£105,000).
2
Maximum profit share paid was between £250 and £1,000.
3
Tom Kirby stepped down as CEO on 31 December 2014 and Kevin Rountree was appointed CEO with effect from 1 January 2015.
41 Games Workshop Group PLC
REMUNERATION REPORT continued
Percentage change in directors’ remuneration
The table below shows how the percentage change in the directors’ salary/fees in 2022/23 and earlier years compares with the percentage
change in the average remuneration and Group Profit Share of all employees within the Group. The committee has selected the Group’s
entire staff population (excluding the directors) as these represent the most appropriate comparator.
Executive directors
Non-executive directors
Wider
workforce
Kevin
Rountree
Rachel
Tongue
Elaine
4
O'Donnell
John
5
Brewis
Kate
6
Marsh
Randal
7
Casson
Mark
7
Lam
Salary/fees
1
0.0%
1
0.0%
2022/23
4.9%
0.0%
54.8%
0.0%
-
-
2
10.2%
2
16.3%
2021/22
4.1%
54.5%
11.7%
3.0%
-
-
2020/21
4.0%
17.7%
31.2%
62.0%
6.4%
16.9%
-
-
Bonus
2022/23
6.8%
11.2%
11.1%
n/a
n/a
n/a
n/a
n/a
2021/22
-18.7%
-1.0%
4.4%
n/a
n/a
n/a
n/a
n/a
3
483.8%
3
546.7%
2020/21
78.2%
n/a
n/a
n/a
n/a
n/a
Group Profit Share/
discretionary payment
2022/23
14.3%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2021/22
-30.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2020/21
400.0%
-50.0%
-50.0%
n/a
n/a
n/a
n/a
n/a
1
The changes in the single figure table result from additional salary paid in respect of excess pension contributions as described on page 38. There is no change in Kevin Rountree
and Rachel Tongue’s base salaries in the period.
2
The increase in salary percentage in both 2021/22 and 2020/21 is a result of a salary increase on 1 November 2020 following a benchmarking exercise.
3
The growth in bonus in 2020/21 was driven by reaching the threshold for ‘exceptional performance’ in the period meaning 100 of the new base salary (as noted above) was
paid compared to 20% in the prior period.
4
Elaine O’Donnell was appointed as non-executive chair on 1 January 2021 and stepped down from the board on 31 December 2022. Her pay change has been calculated on an
annualised basis.
5
John Brewis was appointed senior independent director on 1 January 2021 and was appointed non-executive chair on 1 January 2023.
6
Kate Marsh was appointed on 24 July 2019 and was appointed as remuneration committee chair on 11 April 2023.
7
Randal Casson was appointed on 1 July 2022 and Mark Lam was appointed on 11 April 2023.
The bonus included within the wider workforce is only payable to a small number of employees.
The Group Profit Share payment to the CEO and CFO was £500 in 2020/21 and not applicable in 2021/22 onwards in accordance with the
change in remuneration policy at the 2021 AGM, meaning directors are no longer eligible for the Group Profit Share. The wider workforce
was paid a profit share/discretionary payment of £4,000 in 2022/23, £3,500 in 2021/22 and £5,000 in 2020/21. The Group Profit Share
Scheme allows for a share of up to 10% of core operating profit.
Remuneration cost and Group Profit Share/discretionary bonus for the wider workforce have been calculated using the average exchange
rates in the respective periods.
CEO pay ratio
We publish our CEO pay ratio in accordance with the Companies (Miscellaneous Reporting) Regulations 2018. In order to calculate our CEO
pay ratios for 2022/23, we opted for Option A as this is the most statistically accurate method. For Option A, the total full time equivalent
(FTE) remuneration for all the Group’s UK employees for the relevant financial period is determined and those employees are ranked from
low to high, based on their total FTE remuneration. The employees whose remuneration places them at the 25th, 50th (median) and 75th
percentile points are then identified.
th
25
percentile
th
50
percentile
th
75
percentile
CEO
Total pay (£000)
1,395
25
30
36
Base salary (£000)
715
23
24
30
th
25
percentile
th
50
percentile
th
75
percentile
2022/23
53:144:137:1
2021/22
56:146:135:1
2020/21
56:144:133:1
To calculate these ratios, we determined the FTE pay and benefits for all UK employees in the financial period 2022/23 based on actual
earnings reports as at 28 May 2023. The pay and benefits used to calculate the ratios include basic salary, pension, bonus payments, Group
Profit Share, sharesave options and additional payments in relation to their role. Where an employee joined part way through the year, the
monthly FTE pay was calculated and applied to the months before they joined.
42 Games Workshop Group PLC
CEO pay ratio continued
The multiple of the CEO’s remuneration, compared to percentiles within the workforce are considered by the committee when making
judgements around executive reward. The committee accepts that the result of the remuneration policy will lead to the executive
directors’ remuneration being a considerable multiple, compared to other elements of the organisation. In reviewing executive
remuneration and the CEO multiple, the committee has taken a number of themes into account:
• One of the guiding principles of our policy is that in order to attract and retain talented staff we need to have remuneration, which is
in line with what Games Workshop employees could earn in a broadly similar role in a broadly similar organisation. As this is true
throughout the organisation, it must also apply to our executive directors. The amount our executive directors could earn in other
organisations is available for all to read in the publicly available annual reports published by other companies in the FTSE. The absence
of LTIPs means that the potential total remuneration available to our executive directors is significantly lower when compared to
other companies within the FTSE 250.
• Games Workshop has an established track record of internal promotion, blended with external recruits who fit with the organisation
and bring additional expertise. While the remuneration packages of our two executive directors are significant, the fact that they have
both achieved these positions after more than twenty years’ service with the Company is evidence that others could do too.
• This multiple is clearly largest when compared to employees at the lower end of the pay spectrum, but this is moderated to some
extent by the Company’s decision to:
- pay the national living wage in the UK, regardless of age
- ensure that Exceptional Bonus Awards are not made to executive directors unless the Group Profit Share Scheme is also paid
- award the Group Profit Share equally, to all staff, which represents a higher percentage payment to lower paid staff.
We are satisfied that the ratios accurately reflect our approach to pay and benefits.
Share price changes
The directors’ remuneration does not vary depending on share price appreciation or depreciation.
Relative importance of spend on pay
The following table sets out the percentage change in dividends, profit attributable to owners and employee remuneration for the period
ended 28 May 2023, compared to the period ended 29 May 2022:
2023
£m
2022
£m
% change
Total staff costs
117.9
105.7
11.5
Profit attributable to owners
134.7
128.4
4.9
Dividends declared
136.5
77.1
77.0
Statement of voting at the last AGM
At the last AGM, significant votes on remuneration related resolutions were cast as follows:
Votes for
% of vote
Votes against
% of vote
Votes withheld
% of vote
To approve the remuneration report
22,415,102
89.0 2,743,299 10.9
28,659
0.1
The board of Games Workshop remains fully committed to shareholder engagement and welcomes ongoing dialogue with all investors.
Implementation statement
A summary of the remuneration arrangements in 2022/23 and how the policy will be applied during 2023/24 is set out below:
The structure of the remuneration policy is clear:
The remuneration committee has an open and robust dialogue with our executives, who clearly understand the policy. Any shareholder
queries in relation to the remuneration policy and its operation are answered promptly.
The structure of the remuneration policy is simple:
The fixed element of our executives’ remuneration is made up of a fixed base salary with a defined percentage pension contribution, which
is equal to the percentage contribution available to the wider workforce. Our policy avoids the use of additional benefits or allowances.
The variable element of executive remuneration is made up of a single Exceptional Bonus Award, which is awarded at the independent
discretion of the remuneration committee in the event that proven, exceptional performance has been delivered.
The structure of the remuneration policy avoids risks:
Our remuneration policy avoids the potential for reputational risks from excessive rewards and the behavioural risks that might arise from
target-based incentive plans simply and effectively by not including any target-based incentives.
43 Games Workshop Group PLC
REMUNERATION REPORT continued
Implementation statement continued
The remuneration policy has predictable outcomes:
The outcomes of the potential rewards are subject to clear limits and caps. The Exceptional Bonus Award is directly related to base salary
alone, with a maximum potential bonus payment of 150% annually to each of our two executive directors.
The remuneration policy reflects a focus on delivery of our strategy and is aligned to company purpose, values and culture:
A focus on the long-term is deeply embedded in the strategy of the Company and the behaviours and values of our two executive directors.
Our mission is to ‘make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our products globally at a
profit. We intend to do this forever’. ‘Forever’ is a very important word and our decisions are focused on long-term success and not short-
term gains.
2022/23 represents the second period of implementation of the new executive remuneration policy, approved at the 2021 AGM as part of
a three-year cycle. The remuneration committee made decisions and applied discretion during the year, under the terms of this policy.
Salary - fixed pay
While no consultants were employed to review executive remuneration during the year, the committee continues to monitor our executive
directors’ rewards, relative to other companies. In doing so, we consider the various elements of executive benefits - base salary, fixed pay,
variable pay and total remuneration.
The executive directors continue to receive a pension based on a percentage of their base salary, which is equivalent to that available to
the wider workforce. At a maximum of 8.5%, this is considerably lower than that shown in external analysis of employer pension
allowances made to executives elsewhere in the FTSE 250. This is important when comparing total fixed remuneration rather than base
salary alone.
Variable pay
The maximum Exceptional Bonus Award is up to 150% of base salary for the two executive directors, per year. The performance criteria are
at the discretion of the remuneration committee as outlined earlier in the report on page 38.
The remuneration policy is intended to ‘motivate’ our management to deliver a high level of performance.
The committee notes that our remuneration policy differs from that in many other companies within the FTSE. This is a reflection of our
belief that, culturally, our managers and colleagues want to deliver a high level of performance and the use of complex and formulaic
incentive programmes might have unintended consequences and do more harm than good.
The committee confirmed its opinion that the remuneration package for our executive directors should not include long term incentive
plans (LTIPs). We believe that LTIPs could have the potential to unbalance the organisation with individuals being incentivised to achieve
personal goals, at the expense of the wider organisation.
The committee confirmed its belief that the recognition of exceptional performance has a potential motivational impact on teams and on
individuals and agreed that the structure of the Exceptional Bonus Award, designed to recognise and reward exceptional performance of
our executive directors, remains fit for purpose.
Sharesave
A further award of options will be made under the new sharesave scheme during the year which is on the same basis as previous years and
available to all eligible employees.
Non-executive directors’ fees
As part of annual review, the executive directors and chair of the board reviewed non-executive director fees against publicly available
compensation benchmarking, awarding non-executive directors a 5% increase in base fees in line with the wider workforce with the base
rising from £53,560 to £56,238. A fee of £5,000 has been added for additional responsibility of chairing a board committee or undertaking
the role of senior independent director. The new fees have been added from 1 June 2023.
The remuneration committee also met as part of annual review to assess appropriate fees for the chair of the board. Taking account of
publicly available compensation benchmarking and being mindful of the market differentials for non-executive and chair fees (where
Games Workshop’s chair fee has fallen below market rate for a comparative FTSE 250 company), the committee felt it was appropriate to
increase the chair fee to £175,000 annually from 1 June 2023, noting that the resulting fee was still below the lower quartile of chair
compensation for a FTSE 250 listed company.
Stakeholder alignment and wider governance context
In order to align with the experience of shareholders, the executive directors are required to invest 67% of any cash bonus payments (post
tax) in the Company’s shares on the open market, after the results have been published and that these shares are expected to be held for
three years. There is no dilution of shares, no compensation for taxation issues and Exceptional Bonus Award payments to the executive
directors are subject to clawback. The committee notes that there may be more tax efficient mechanisms to achieve this share purchase,
but the executives choose not to employ these alternatives, believing it inappropriate to use the Company’s tax resources for the benefit of
two individuals.
44 Games Workshop Group PLC
Stakeholder alignment and wider governance context continued
The Group Profit Share Scheme allows up to 10% of core operating profit, to be paid, equally, to all staff (other than the two executive
directors). These payments are also subject to the independent discretion of the remuneration committee, ensuring the variable elements
of the executive directors’ remuneration are completely aligned with the experience of the wider workforce.
In applying discretion to both the Exceptional Bonus Award and the Group Profit Share Scheme, the committee prevents formulaic
outcomes and strengthens the alignment of experience between awards to the executive directors, shareholders and the wider workforce.
Each of these stakeholders are considered by the committee before making bonus payments to our executive directors.
When considering the potential payment of an Exceptional Bonus Award, as stated above in the overview, the committee applies
discretion to a suite of financial indicators including growth, margin, Group profit, earnings per share, cash generation and dividend
payments made. If performance against this basket of criteria is exceptional, the Group will have generated sufficient profit and cash to
have paid dividends to shareholders and appropriate cash payments to all staff under the Group Profit Share Scheme.
There are no elements of executive variable pay that are assigned to the achievement of specific non-financial goals. The committee’s view
is that progress with the implementation of strategic objectives, completion of particular projects or progress with ESG elements are
fundamental to our executive directors’ roles and the isolation of particular elements to attract specific reward might distract from the
performance of the business in the round or inadvertently emphasise the priorities of a particular stakeholder.
The Exceptional Bonus Award does not contain a mechanism to pay out for ‘on target’ performance. This may amplify complexity when
comparing with other FTSE companies where threshold payments are applied, but our position is that performance that is in line with
expectations is covered by the base salary element of the remuneration package.
The committee notes the initiatives of other companies to use ESG targets as a mechanism to trigger bonus awards. Our decision not to do
this should not be interpreted as a lack of commitment to ESG. In fact, Games Workshop’s long-established strategic statement emphasises
our intention ‘to do this forever’. This is such an entrenched part of Games Workshop’s ethos that we do not believe that we should
introduce specific targets which might distract from or emphasise particular elements of this intent. Our expectation is that ESG progress is
covered by the base salary element of the remuneration package.
We are aware that the Code states that remuneration schemes should promote long-term shareholdings by executive directors to support
alignment with shareholder interests, with the Code stating that ‘share awards granted for this purpose should be released on a phased
basis and be subject to a total vesting and holding period of five years or more’. Our position remains that the benefits of granting LTIP
share awards ‘for this purpose’ are outweighed by the potential negative impact of LTIPs on the unique culture of Games Workshop and
the potential to widen the multiple of CEO and CFO remuneration, when compared to the wider workforce.
In association with the remuneration committee’s judgement to retain a policy without LTIP share awards, we maintain our position where
the executive directors are not subject to in-employment nor post-cessation minimum shareholding requirements. We have chosen not to
impose these conditions as, based on their conduct, long service and consistent outstanding performance, the committee is satisfied that
our executive directors’ behaviour is focused on the long-term and is aligned with shareholder interests. It should also be noted that our
executive directors must purchase shares at market rate from any bonus received at a minimum level of 67% of that cash bonus.
At the time of writing, both executive directors have significant shareholdings, all of which have been purchased from their personal post-
tax resources.
Conclusion
The board takes seriously its responsibilities in applying the principles of UK corporate governance - properly incentivising executive
directors and senior management forms part of this responsibility.
The committee and the board’s philosophy to pay and reward remains the same, believing that the main focus of the remuneration policy
should be on the fixed elements of pay. The committee continues to discuss and is very mindful of the risks of incentive plans and complex
bonus schemes driving short-term and/or individual behaviour which are not in the interests of the Company and its shareholders. As such,
the committee continues not to introduce any form of long-term incentives at this time. However, the committee undertakes to seek to be
appropriately informed on market dynamics and to listen to the Company’s key stakeholders, in order to ensure that the executive
directors are appropriately rewarded, retained and motivated. As per good practice the committee aims to conduct an external benchmark
review of executive pay in 2023/24 - three years after the last external benchmarking exercise.
Advisers
No advisers were employed to review executive remuneration during 2022/23.
45 Games Workshop Group PLC
REMUNERATION REPORT continued
Directors’ interests in shares of the Company (subject to audit)
The directors’ interests (including their families) in the shares of the Company were as follows:
As at 28 May 2023
Ordinary shares of 5p each
As at 29 May 2022
Ordinary shares of 5p each
Beneficial
Non-beneficial
Beneficial Non-beneficial
Kevin Rountree
12,499
-
9,343 -
Rachel Tongue
9,561
-
7,730 -
John Brewis
213
-
213 -
Kate Marsh
378
-
378-
1
Elaine O’Donnell
n/a
n/a
2,857 2,943
2
Randal Casson
-
-
n/a n/a
3
Mark Lam
-
-
n/a n/a
1
Elaine O’Donnell stepped down from the board on 1 December 2022 and her shareholding at this date was 2,857 beneficial and 2,943 non-beneficial.
2
Randal Casson was appointed to the board on 1 July 2022
3
Mark Lam was appointed to the board on 11 April 2023
Share options (subject to audit)
Share options granted to the directors under the sharesave scheme were as follows:
Number as at
28 May 2023
Number as at
29 May 2022
Exercise dates
Commencement Expiry
Exercise price
Kevin Rountree
252
252
Nov 2023
Apr 2024 £71.4627
Rachel Tongue
252
252
Nov 2023
Apr 2024 £71.4627
The options above were granted under the Games Workshop Group PLC 2015 Sharesave Scheme which grants options at a 20% discount
on the market price at grant. Participants save a fixed amount monthly for three years in order to fund the exercise of the option. At
exercise an individual may choose to exercise their option or have their savings repaid to them. This scheme is open to all eligible
employees and directors who satisfy a service qualification of at least three months. There are no performance targets associated with
these options. No other directors have been granted share options in the shares of the Company.
There were no aggregate gains of directors arising from any exercise of options granted within the sharesave scheme in 2021/22 or
2022/23.
There were no movements in directors’ interests in shares of the Company between 28 May 2023 and the date of this report.
Performance graph
The graph below represents the comparative total shareholder return performance of the Company against that of the index of the FTSE
250 companies during the previous ten years. The index of the FTSE 250 companies has been used because the constituents of this index
most appropriately reflect the Company’s size when compared to alternative indices.
3,000
GAMES WORKSHOP
2,500
FTSE 250
2,000
1,500
1,000
500
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
On behalf of the board
Kate Marsh
Remuneration committee chair
24 July 2023
46 Games Workshop Group PLC
DIRECTORS’ RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the annual report and the Group and parent company financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare Group and parent company financial statements for each financial period. Under that law
they are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and
applicable law and have elected to prepare the parent company financial statements on the same basis.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and parent company and of the Group’s profit or loss for that period. In preparing each of the Group and
parent company financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and reliable
• state whether they have been prepared in accordance with UK-adopted international accounting standards;
• assess the Group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a strategic report, directors’ report, remuneration
report and corporate governance report that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements will form part of the annual report
prepared using the single electronic reporting format under the TD ESEF Regulation. The auditor’s report on these financial statements
provides no assurance over the ESEF format.
Responsibility statement of the directors in respect of the annual report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• the strategic report includes a fair review of the development and performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that
they face.
We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy.
On behalf of the board
Rachel Tongue
CFO
24 July 2023
47 Games Workshop Group PLC
COMPANY DIRECTORS AND ADVISERS
Directors
John Brewis, non-executive chair
Kevin Rountree, chief executive officer
Rachel Tongue, chief financial officer
Randal Casson, non-executive director
Mark Lam, senior non-executive director
Kate Marsh, non-executive director
Company secretary
Ross Matthews
Registered office
Willow Road, Lenton, Nottingham, NG7 2WS
Registered number
2670969
Financial advisers and stockbrokers
Peel Hunt LLP, 100 Liverpool Street, London, EC2M 2AT
Chartered accountants and independent statutory auditor
KPMG LLP, 1 Snow Hill, Queensway, Birmingham, B4 6GH
Registrar
Equiniti Limited, Aspect House, Spencer Road, Lancing, BN99 6DA
48 Games Workshop Group PLC
INDEPENDENT AUDITOR’S REPORT
To the members of Games Workshop Group PLC
Our opinion is unmodified
We have audited the financial statements of Games Workshop Group PLC (‘the Company’) for the 52-week period ended 28 May 2023
which comprise the consolidated income statement, consolidated statement of comprehensive income, balance sheets, consolidated and
Company statements of changes in total equity, consolidated and Company cash flow statements and the related notes, including the
accounting policies in note 2.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 2 ay
202 and of the Group’s profit for the period then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities
are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the audit and risk committee.
We were first appointed as auditor by the shareholders on 15 September 2021.The period of total uninterrupted engagement is for two
financial periods ended 28 May 2023. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters (unchanged from 2022), in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
The risk
Our response
Core revenue
recognition
(Core revenue -
£445.4 million
(2022: £386.8
million))
Risk vs 2022:
unchanged
Refer to page 55
Core revenue relates to those channels that sell
product to external customers, through the
Group’s network of retail stores, independent
retailers and online via the global web stores
and consists of 5 (2022: ) of the Group’s
total revenue.
Professional standards require us to presume
(unless rebutted) that the fraud risk from
revenue recognition is a significant risk. Given
that core revenue is recognised at a point in
time, is simple in nature and individual sales are
of high volume and low value (meaning that a
large volume of sales transactions would need
to be misstated to result in a material
misstatement) we rebutted the presumption of
a significant risk due to fraud and we did not
identify a significant risk of misstatement due
to error.
However, due to the significance of core
revenue in the context of the financial
statements and our materiality, the risk that
core revenue is misstated due to error is
considered to be the area that had the greatest
effect on our overall Group audit.
Our procedures included:
• Test of detail: For certain trade sales customers, we
performed data analytics procedures to reconcile the
movement from the opening to the closing trade
receivables position;
• Test of detail: For the remaining in-scope components
where revenue was not covered by the data analytics
procedure described above, we substantively sampled the
revenue in the period to match sales invoices to related
orders, dispatch notes and/or cash and/or trade debtors;
and
• Test of detail: We inspected a sample of sales
transactions either side of the balance sheet date as well
as credit notes issued after period end and assessed
whether revenue has been recognised in the appropriate
period.
We performed the detailed tests above rather than seeking to
rely on any of the Group’s controls because our knowledge of
the design of these controls indicated that we would not be able
to obtain the required evidence to support reliance on controls.
Our results:
We found the recognition of core revenue to be acceptable
(2022: acceptable).
49 Games Workshop Group PLC
INDEPENDENT AUDITOR’S REPORT continued
The risk
Our response
Recoverability of
parent company
investments in and
intercompany
receivables from
subsidiaries
(Investments £30.6
million (2022: £30.6
million),
receivables from
Group companies
£6.4 million (2022:
£8.5 million), loans
to Group
companies £24.6
million (2022: £31.6
million))
Risk vs 2022:
unchanged
Refer to note 17 on
page 70 and notes
20 and 21 on pages
71 and 72
Low risk, high value
The carrying amount of the parent company’s
investments in subsidiaries and intercompany
receivables represents 66% (2022: 70%) of the
parent company’s total assets. Their
recoverability is not at a high risk of significant
misstatement or subject to significant
judgement. However, due to their materiality
in the context of the parent company financial
statements, this is considered to be the area
that had the greatest effect on our overall
parent company audit.
Our procedures included:
• Tests of detail: We compared the carrying amount of each
investment and intercompany receivable to the net assets
of the relevant subsidiary included within the group
consolidation, to identify whether their net assets, being
an approximation of their minimum recoverable amount,
were in excess of their carrying amount and assessing
whether those subsidiaries have historically been profit-
making.
We performed the detailed tests above rather than seeking to
rely on any of the Group’s controls because our knowledge of
the design of these controls indicated that we would not be able
to obtain the required evidence to support reliance on controls.
Our results:
We found the Company’s conclusion that there is no impairment
of its investments in subsidiaries and intercompany receivables
to be acceptable (2022: acceptable).
Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £8.5m (2022: £7.5m), determined with reference to a benchmark of
Group profit before tax, of which it represents 5.0% (2022: 4.8%).
Materiality for the parent company financial statements as a whole was set at £1.0m (2022: £0.9m), determined with reference to a
benchmark of the parent company’s net assets, of which it represents 1.4 (2022: 1. ).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2022: 75%) of materiality for the financial statements as a whole, which equates to £6.4m (2022:
£5.6m) for the Group and £0.75m (2022: £0.675m) for the parent company. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating an elevated level of risk.
We agreed to report to the audit and risk committee any corrected or uncorrected identified misstatements exceeding £0.425m (2022:
£0.375m), in addition to other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s 56 (2022: 54) reporting components, we subjected 6 (2022: ) to full scope audits for group purposes and 2 (2022: 1) to
specified risk-focused audit procedures over revenue. The latter were not financially significant enough to require a full-scope audit for
group purposes, but did present specific individual risks that needed to be addressed.
The components within the scope of our work accounted for 91% of total Group revenue (2022: 90%), 96% of Group profit before tax
(2022: 90%) and 94% of total Group assets (2022: 92%).
The remaining 9% (2022: 10%) of total Group revenue, 4% (2022: 10%) of Group profit before tax and 6% (2022: 8%) of total Group assets
is represented by 48 (2022: 46) reporting components, none of which individually represented more than 3% (2022: 3%) of any of total
Group revenue, Group profit before tax or total Group assets. For the residual components, we performed analysis at an aggregated Group
level to re-examine our assessment that there were no significant risks of material misstatement within these.
The scope of the audit work performed was predominantly substantive as we placed limited reliance upon the Group’s internal control
over financial reporting.
The work on all of the components, including the audit of the parent company, was performed by the Group team.
50 Games Workshop Group PLC
The impact of climate change on our audit
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial statements.
With the support of our climate professionals, we performed a risk assessment of the impact of climate change on the financial statements
and our audit approach.
Taking into account the nature of the business operations of the Group, the potential increase in costs relating to decarbonisation, climate
related taxes and changes in regulations, we did not identify any risks that significantly impact our audit or key audit matters. We read the
climate related disclosures in the front half of the annual report and considered consistency with the financial statements and our audit
knowledge.
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the parent
company or to cease their operations, and as they have concluded that the Group’s and the parent company’s financial position means
that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their
ability to continue as a going concern for at least a year from the date of approval of the financial statements (‘the going concern period’).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and parent company’s financial resources or ability to continue operations
over the going concern period. The risk that we considered most likely to adversely affect the Group’s and parent company’s available
financial resources over this period was inflationary pressures increasing the cost of raw materials and reducing the gross margin earned on
core revenue sales.
We considered whether these risks could plausibly affect the liquidity in the going concern period by comparing severe, but plausible,
downside scenarios that could arise from these risks individually and collectively against the levels of available financial resources indicated
by the Group’s financial forecasts.
We assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s or parent company’s ability to continue as a going
concern for the going concern period;
• we have nothing material to add or draw attention to in relation to the directors’ statement in note 2 to the financial statements on the
use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and parent
company’s use of that basis for the going concern period, and we found the going concern disclosure in note 2 to be acceptable; and
• the related statement under the Listing Rules set out on page 27 is materially consistent with the financial statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the parent
company will continue in operation.
Fraud and breaches of laws and regulations - ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (‘fraud risks’) we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• enquiring of directors, the audit and risk committee, internal audit and inspection of policy documentation as to the Group’s high-level
policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for
‘whistleblowing’, as well as whether they have knowledge of any actual, suspected or alleged fraud;
• reading board, audit and risk committee, and remuneration committee minutes;
• considering remuneration incentive schemes for executive directors; and
• using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets, we perform procedures to address the
risk of management override of controls, in particular the risk that Group management may be in a position to make inappropriate
accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because core revenue is recognised
at a point in time, is simple in nature and individual sales are of high volume and low value (meaning that a large volume of sales
transactions would need to be misstated before resulting in a material error). Licensing revenue is also non-complex, with a small number
of non-judgemental transactions.
51 Games Workshop Group PLC
INDEPENDENT AUDITOR’S REPORT continued
Fraud and breaches of laws and regulations - ability to detect continued
Identifying and responding to risks of material misstatement due to fraud continued
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries and other adjustments to test for all full scope components based on risk criteria and comparing the
identified entries to supporting documentation. These included postings to cash or to revenue with an unexpected pairing.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from
our general commercial and sector experience and through discussion with the directors and other management (as required by auditing
standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation
(including related companies legislation), distributable profits legislation, and taxation legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect
on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery and employment law. Auditing
standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not
disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
We assessed the legality of the distributions made in the period by assessing whether relevant accounts to support the distribution had
been properly prepared and filed at Companies House. As disclosed to us by directors, in regards to the dividend paid on 25 November
2022 sufficient distributable reserves had not been in place at the time of the previous audited accounts and interim accounts were not
filed at Companies House ahead of the interim dividend being paid. We obtained the interim accounts which were subsequently filed at
Companies House and confirmed that sufficient distributable reserves were available at the time the dividend was declared, though the
lack of interim accounts being filed before the dividend was paid means that the dividend remains illegal. We assessed the disclosures in
notes 12 and 21 against our understanding from legal correspondence and consider them to be appropriate.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in
the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For
example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement.
We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and
regulations.
We have nothing to report on the other information in the annual report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work
we have not identified material misstatements in the other information.
52 Games Workshop Group PLC
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial period is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Remuneration report
In our opinion the part of the remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confirmation set out on page 14 that they have carried out a robust assessment of the emerging and principal risks
facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
• the risks and uncertainties disclosures describing these risks and how emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the going concern and viability statement of how they have assessed the prospects of the Group, over
what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on pages 26 and 27 under the Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s
longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our
audit knowledge:
• the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business
model and strategy;
• the section of the annual report describing the work of the audit and risk committee, including the significant issues that the audit and
risk committee considered in relation to the financial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control
systems.
We are required to review the part of the corporate governance statement
relating to the Group’s compliance with the provisions of the
UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.
We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements and the part of the remuneration report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
53 Games Workshop Group PLC
INDEPENDENT AUDITOR’S REPORT continued
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 47, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern
basis of accounting unless they either intend to liquidate the Group or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does
not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting
format specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been
prepared in accordance with that format.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Anna Barrell (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
One Snow Hill
Snow Hill Queensway
Birmingham
B4 6GH
24 July 2023
54 Games Workshop Group PLC
CONSOLIDATED INCOME STATEMENT
52 weeks ended
28 May 2023
£m
52 weeks ended
29 May 2022
£m
Notes
Core revenue
Licensing revenue
Revenue
4
Cost of sales
(149.2 )
(127.4 )
Core gross profit
Licensing gross profit
Gross profit
Operating expenses
4,5
(151.4 )
(130.3 )
Core operating profit
Licensing operating profit
Operating profit
Finance income
7
Finance costs
8
(0.9 )
(0.8 )
Profit before taxation
9
Income tax expense
10
(35.9 )
(28.1 )
Profit attributable to owners of the parent
Earnings per share for profit attributable to the owners of the parent during the period (expressed in pence per share):
Notes
52 weeks ended
28 May 2023
52 weeks ended
29 May 2022
Basic earnings per ordinary share
11
Diluted earnings per ordinary share
11
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
52 weeks ended
28 May 2023
£m
52 weeks ended
29 May 2022
£m
Notes
Profit attributable to owners of the parent
Other comprehensive income
Exchange (losses)/gains on translation of foreign operations
29
(1.5 )
Other comprehensive income for the period
(1.5 )
Total comprehensive income attributable to owners of the
parent
All items disclosed in the statements of comprehensive income will not be reclassified to the income statement.
As permitted by section 40 of the Companies Act 2006, the Company’s income statement and statement of comprehensive income have not been included
in these financial statements.
The notes on pages 59 to 80 are an integral part of these financial statements.
55 Games Workshop Group PLC
BALANCE SHEETS
Group
Company
Notes
£m
29 May 2022
£m
28 May 2023
£m
29 May 2022
£m
Non-current assets
Goodwill
13
-
-
Other intangible assets
14
-
-
Property, plant and equipment
15
-
-
Right-of-use assets
16
-
-
Investments in subsidiaries
17
-
-
30.6
30.6
Deferred tax assets
18
-
-
Non-current receivables
20
24.2
31.6
54.8
62.2
Current assets
Inventories
19
-
-
Trade and other receivables
21
7.0
8.8
Current tax assets
-
-
Cash and cash equivalents
22
32.2
30.4
39.2
39.2
Total assets
94.0
101.4
Current liabilities
Lease liabilities
24
(9.9 )
(9.2 )
-
-
Trade and other payables
25
(37.0 )
(33.5 )
(2.4)
(2.0)
Current tax liabilities
(0.4 )
(1.1 )
-
-
Provisions for other liabilities and charges
27
(0.9 )
(0.8 )
-
-
(48.2 )
(44.6 )
(2.4)
(2.0)
Net current assets
36.8
37.2
Non-current liabilities
Lease liabilities
24
(40.0 )
(39.7 )
-
-
Other non-current liabilities
26
(0.5 )
(0.6 )
(20.6)
(27.9)
Deferred tax liabilities
18
(1.4 )
-
-
Provisions for other liabilities and charges
27
(1.6 )
(1.5 )
-
-
(43.5 )
(41.8 )
(20.6)
(27.9)
Net assets
71.0
71.5
Capital and reserves
Called up share capital
28
1.6
1.6
Share premium account
28
18.9
16.3
Other reserves
29
0.1
0.1
Retained earnings
50.4
53.5
Total equity
71.0
71.5
The Company’s profit after taxation for the 52 weeks ended 2 ay 202 is 1 2.4m (2022: 10 .2m).
The notes on pages 59 to 80 are an integral part of these financial statements.
The financial statements on pages 55 to 80 were approved by the board of directors on 24 July 2023 and were signed on its behalf by:
Kevin Rountree, Director
Rachel Tongue, Director
Registered number 2670969
56 Games Workshop Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
Share
premium
account
£m
Called up
share capital
£m
Other reserves
(note 29)
£m
Retained
earnings
£m
Total
equity
£m
At 30 May 2021 and 31 May 2021 1.6 14.5
Profit for the 52 weeks to 29 May 2022 - -
Exchange differences on translation of foreign operations - -
Total comprehensive income for the period
Transactions with owners:
Share-based payments - -
Shares issued under employee sharesave scheme (note 28) - 1.8
Deferred tax credit relating to share options - -
(1.4 )
(1.4 )
Current tax credit relating to exercised share options - -
Dividends paid to Company shareholders - -
(93.5 )
(93.5 )
Total transactions with owners - 1.8
(92.6 )
(90.8 )
At 29 May 2022 and 30 May 2022 1.6 16.3
Profit for the 52 weeks to 28 May 2023 - -
Exchange differences on translation of foreign operations - -
(1.5 )
(1.5 )
Total comprehensive income for the period
(1.5 )
Transactions with owners:
Share-based payments - -
Shares issued under employee sharesave scheme (note 28) - 2.6
Deferred tax debit relating to share options - -
(0.2 )
(0.2 )
Current tax credit relating to exercised share options - -
Dividends paid to Company shareholders - -
(136.5 )
(136.5 )
Total transactions with owners - 2.6
(135.4 )
(132.8 )
At 28 May 2023 1.6 18.9
COMPANY STATEMENT OF CHANGES IN TOTAL EQUITY
Share
premium
account
£m
Called up
share capital
£m
Other reserves
(note 29)
£m
Retained
earnings
£m
Total
equity
£m
At 30 May 2021 and 31 May 2021
1.6 14.5
0.1 42.2
58.4
Profit for the 52 weeks to 29 May 2022
- -
- 103.2
103.2
Total comprehensive income for the period
- -
- 103.2
103.2
Transactions with owners:
Share-based payments
- -
- 1.6
1.6
Shares issued under employee sharesave scheme (note 28)
- 1.8
- -
1.8
Dividends paid to Company shareholders
- -
- (93.5)
(93.5)
Total transactions with owners
- 1.8
- (91.9)
(90.1)
At 29 May 2022 and 30 May 2022
1.6 16.3
0.1 53.5
71.5
Profit for the 52 weeks to 28 May 2023
- -
- 132.4
132.4
Total comprehensive income for the period
- -
- 132.4
132.4
Transactions with owners:
Share-based payments
- -
- 1.0
1.0
Shares issued under employee sharesave scheme (note 28)
- 2.6
- -
2.6
Dividends paid to Company shareholders
- -
- (136.5)
(136.5)
Total transactions with owners
- 2.6
-
(135.5)
(132.9)
At 28 May 2023
1.618.9
0.1
50.4
71.0
The notes on pages 59 to 80 are an integral part of these financial statements.
57 Games Workshop Group PLC
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
Group
Company
Notes
52 weeks ended
28 May 2023
£m
52 weeks ended
29 May 2022
£m
52 weeks ended
28 May 2023
£m
52 weeks ended
29 May 2022
£m
Cash flows from operating activities
Cash generated from operations
30
135.0
101.8
UK corporation tax paid
(31.3 )
(34.0 )
-
-
Overseas tax paid
(7.7 )
(3.7 )
-
-
Net cash generated from operating activities
135.0
101.8
Cash flows from investing activities
Purchases of property, plant and equipment
(14.8 )
(17.0 )
-
-
Purchases of other intangible assets
(0.4 )
(1.4 )
-
-
Expenditure on product development
14
(13.1 )
(13.9 )
-
-
Interest received
2.0
0.1
Net cash (used in)/generated from investing activities
(27.1 )
(32.1 )
2.0
0.1
Cash flows from financing activities
Proceeds from issue of ordinary share capital
28
2.6
1.8
Repayment of principal under leases
24
(11.8 )
(11.1 )
-
-
Lease interest paid
24
(0.9 )
(0.8 )
-
-
Interest paid
(1.3)
-
Dividends paid to Company shareholders
12
(136.5 )
(93.5 )
(136.5)
(93.5)
Net cash used in financing activities
(146.6 )
(103.6 )
(135.2)
(91.7)
Net increase/(decrease) in cash and cash equivalents
(14.2 )
1.8
10.2
Opening cash and cash equivalents
30.4
20.2
Effects of foreign exchange rates on cash and cash equivalents
(0.2 )
-
-
Closing cash and cash equivalents
22
32.2
30.4
The notes on pages 59 to 80 are an integral part of these financial statements.
58 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS
1. General information
the development of video games and other products utilising the Group’s intellectual property.
The Company is a public listed company , incorporated and domiciled in the United Kingdom . The address of its registered office is Willow Road, Lenton,
The Company’s ordinary share capital is listed on the London Stock Exchange.
2. Summary of significant accounting policies
The principal accounting policies applied in these financial statements are set out below. These policies have been consistently applied to all the periods
presented, unless otherwise stated.
59 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
2. Summary of significant accounting policies continued
60 Games Workshop Group PLC
61 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
62 Games Workshop Group PLC
63 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
64 Games Workshop Group PLC
65 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
- - Owned property, plant and equipment
- - Owned computer software
- - Development costs
- Audit of the Group and Company’s financial statements
66 Games Workshop Group PLC
- UK corporation tax on profits for the period
- Overseas corporation tax on profits for the period
NOTES TO THE FINANCIAL STATEMENTS continued
68 Games Workshop Group PLC
69 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
70 Games Workshop Group PLC
71 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
72 Games Workshop Group PLC
73 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
74 Games Workshop Group PLC
75 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
76 Games Workshop Group PLC
- - Increase/(decrease) in provisions
31. Analysis of net funds
Group
2023
£m
2022
£m
Cash at bank and in hand
90.2
71.4
Lease liabilities
(49.9)
(48.9)
Net funds
40.3
22.5
Company
2023
£m
2022
£m
Cash at bank and in hand
32.2
30.4
Net funds
32.2
30.4
77 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
31. Analysis of net funds continued
Group
Lease liabilities
£m
Cash at bank
£m
Total
£m
Net funds as at 30 May 2021 and 31 May 2021
(47.0)
85.2 38.2
Cash flows
11.1
(14.2) (3.1)
Lease additions
(11.4)
- (11.4)
Interest expense
(0.8)
- (0.8)
Interest payments
0.8
- 0.8
Foreign exchange movement
(1.6)
0.4 (1.2)
Net funds as at 29 May 2022 and 30 May 2022
(48.9)
71.4 22.5
Cash flows
11.8
19.1 30.9
Lease additions
(12.9)
- (12.9)
Interest expense
(0.9)
- (0.9)
Interest payments
0.9
- 0.9
Foreign exchange movement
0.1
(0.3) (0.2)
At 28 May 2023
(49.9)
90.2
40.3
Cash flows in respect of lease liabilities reflects repayments of principal amounts.
The Company holds no lease liabilities and had net cash flows of less than £0.1 million (2022: less than £0.1m) arising from financing activities during the
period.
78 Games Workshop Group PLC
79 Games Workshop Group PLC
NOTES TO THE FINANCIAL STATEMENTS continued
80 Games Workshop Group PLC
FIVE YEAR SUMMARY
2022
£m
2021
£m
2020
£m
2019
£m
2023
£m
Core revenue
445.4
386.8
353.2 269.7 256.6
Licensing revenue
25.4
28.0
16.3 16.8 11.3
Revenue
470.8
414.8
369.5 286.5 267.9
Operating profit
170.2
157.1
151.7 90.0 81.2
Finance income
1.3
0.2
0.2 0.1 0.1
Finance costs
(0.9)
(0.8)
(1.0) (0.7) -
Profit before taxation
170.6
156.5
150.9 89.4 81.3
Income tax expense
(35.9)
(28.1)
(28.9) (18.1) (15.5)
Profit attributable to owners of the parent
134.7
128.4
122.0 71.3 65.8
Basic earnings per ordinary share (pence per share)
409.7
391.3
372.7 218.7 202.9
FINANCIAL CALENDAR
Annual general meeting
20 September 2023
Announcement of half yearly report January 2024
Financial period end
2 June 2024
Announcement of final results July 2024
81 Games Workshop Group PLC
GLOSSARY
Alternative Performance Measures (APMs)
Closest equivalent
IFRS measure
APM definitions
Reconciliation to closest IFRS measure where applicable
Core revenue
Direct sales made of our core products to
external customers, through the Group’s
network of retail stores, independent retailers
and online through the global web stores
Revenue
Core revenue is reconciled to revenue in note 4 to the financial statements.
Core gross profit
Core gross profit is core revenue less all related
cost of sales
Gross profit
Core gross profit is reconciled to gross profit in note 4 to the financial statements.
Core operating expenses
Operating expenses relating to the core
business of selling directly to external customers
Operating
expenses
Core operating expenses are reconciled to operating expenses in note 4 to the
financial statements.
Core operating profit
Core operating profit is core revenue less all
related cost of sales and operating expenses
Operating profit
Core operating profit is reconciled to operating profit in note 4 to the financial
statements.
Licensing revenue
Income relating to royalties earned from third
party licensees
Revenue
Licensing revenue is reconciled to revenue in note 4 to the financial statements.
Licensing gross profit
Licensing gross profit is licensing revenue less
any related cost of sales
Gross profit
Licensing gross profit is reconciled to gross profit in note 4 to the financial
statements.
Licensing operating expenses
Operating expenses relating to the licensing
segments
Operating
expenses
Licensing operating expenses are reconciled to operating expenses in note 4 to the
financial statements.
Licensing operating profit
Licensing operating profit is licensing revenue
less all related cost of sales and operating
expenses
Operating profit
Licensing operating profit is reconciled to operating profit in note 4 to the financial
statements.
Revenue at constant currency
Revenue
These are calculated by converting underlying revenue, core operating profit and
licensing operating profit amounts at local currency values for the current period at
the prior period average exchange rate.
Core operating profit at constant currency
Operating profit
Licensing operating profit at constant currency
Amounts for current and prior periods, stated at
a constant exchange rate.
Operating profit
2023
2022
Actual
Impact of FX
Constant currency
Actual
Revenue
470.8
(23.5)
447.3
414.8
Core operating profit
148.2
(16.3)
131.9
131.7
Licensing operating profit
22.0
(2.1)
19.9
25.4
Core average capital employed
This is a measure of the capital employed in the
core business averaged over a 12 month period
None
This value is calculated by taking monthly net assets and adjusting for any cash,
borrowings, licensing receivables, exceptional provisions, taxation and dividends,
for each of the 12 months. These are then added together and divided by 12 to give
the core average capital employed.
12 month average
2023
2022
£m
£m
Net assets
257.4
228.5
Cash
(105.3)
(87.0)
Licensing receivables
(22.5)
(20.2)
Taxation
(17.9)
(10.0)
Core average capital employed
111.7
111.3
Return on capital employed (ROCE)
Measure of the profit relative to the amount of
capital employed. The higher the ROCE, the
greater the return for the capital employed
None
Return is a percentage calculated by dividing the core operating profit (2023:
£148.2m, 2022: £131.7m) by the core average capital employed (2023: £111.7m,
2022: £111.3m).
Cash generated - pre dividends paid
Movement in cash in the period before any
payments of dividends are taken into account
Net
increase/(decrease)
in cash and cash
equivalents
Net increase in cash-pre dividends paid can be calculated by taking the net
increase/(decrease) in cash and cash equivalents (2023: £19.0m, 2022: (£14.2m))
and adding back the dividends which have been paid in the period (2023: £136.5m,
2022: £93.5m).
82 Games Workshop Group PLC