Games Workshop Group PLC (LON:GAW) shares surged on Tuesday after the maker of Warhammer reported results for the “best year” in its history.
For the year ended May 31, the FTSE 250 firm reported a pre-tax profit of £89.4mln, up from £81.3mln in the prior year, while revenues climbed to £269.7mln from £256.6mln.
READ: Games Workshop jumps as pandemic recovery better than expected
The company also paid out 145p in dividend per share in the year, which was lower than the 155p from the prior year.
“An amazing set of results - the best year in Games Workshop's history, so far. You can once again see from these results that our business and the Warhammer hobby are in good shape. We look forward to the year ahead and will face any challenges head on and learn from our mistakes. We thank our staff and customers and other stakeholders for their continued support during these uncertain times. The board and I continue to believe that the prospects for the business are good”, said chief executive Kevin Rountree.
In a note on Wednesday, analysts at house broker Peel Hunt hiked their target price on the firm to 9,500p from 8,000p and retained their ‘buy’ rating, saying the results were “impressive” and demonstrated a “strong start” for the group.
“It is abundantly clear that [free cash flow] continues to be very strong, so the sales growth continues to translate into profits and cash. Also, the high level of dividend payments made over the last three years demonstrates the validity of the cash generation, particularly as the company did not have an overdraft facility until the onset of [coronavirus]”, Peel Hunt said.
“The shares have moved to new highs and are on a punchy rating; however, it has clear momentum and significant operational gearing”, they added.
Games Workshop shares jumped 8% to 9,130p in late-morning trading.