Games Workshop Group - Encouraging trading in H123

Games Workshop’s (GAW’s) H123 trading update indicates an encouraging start to the year, with reported revenue and operating profit representing more than half of our full year estimate. With around three-quarters of revenue earned overseas, GAW is a beneficiary of sterling’s weakness, notably versus the US dollar, which alone, we estimate, contributed c 6% to GAW’s core revenue growth in H123. Although sterling has recently strengthened, at current exchange rates it continues to provide good support for the remainder of the year. We upgrade our FY23 and FY24 revenue estimates by c 2% due to favourable exchange rates, but maintain our prior profit estimates. Our discounted cash flow-based valuation of £100/share is unchanged ahead of publication of H123 results.