By Rosemary Banyard, Fund Manager, VT Downing Unique Opportunities Fund
As a fund manager, I am drawn to businesses with a unique edge—those that can grow sustainably by leveraging a strong competitive advantage. Games Workshop (GAW), a top holding in the VT Downing Unique Opportunities Fund (DUO), exemplifies this. It is a truly British success story, showcasing the strength of homegrown talent and ingenuity on the global stage.
At the end of November, Games Workshop delivered a typically concise yet impactful first-half trading update. True to its reputation for focused communication, the company announced that trading is ahead of expectations. Revenues are estimated to be up by over 10%, profit before tax (PBT) to have risen nearly 25%, and licensing income more than doubled. These figures highlight both the operational efficiency of the core business and the growing value of its intellectual property.
The doubling of licensing income is particularly significant. Games Workshop’s intellectual property, steeped in the richly detailed Warhammer universe, is increasingly being licensed into complementary industries, particularly computer games. This strategy not only diversifies the company’s revenue streams but also extends its reach to a wider global audience. The success of this licensing approach highlights the enduring appeal of its brand and its ability to resonate across different entertainment platforms.
Yet the best may still be to come. While the market eagerly awaits potential news of a licensing deal with Amazon TV, Games Workshop’s core business continues to deliver exceptional results. Its combination of innovative product development, passionate customer engagement, and disciplined financial management sets a high benchmark.
The company’s ascent toward the FTSE 100 is another testament to its success. Games Workshop’s global appeal, rooted in its deep understanding of its niche market, positions it as one of the standout performers in the UK market. This achievement not only reflects its strong financial performance but also reinforces its role as a flagbearer for British creativity and entrepreneurship.
For the VT Downing Unique Opportunities Fund, Games Workshop represents the type of investment we seek to champion. It combines a strong growth trajectory, a resilient business model, and an ability to monetise its unique intellectual property in innovative ways. As always, we will continue to monitor the company closely, but we are confident that its remarkable journey still has many chapters yet to be written.
Rosemary Banyard
Fund Manager, VT Downing Unique Opportunities Fund
Risk warnings: Please note that past performance is not a reliable indicator of future results. Capital is at risk. Opinions expressed represent the views of the fund manager at the time of publication, are subject to change, and should not be interpreted as investment advice.
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