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Games Workshop (LSE:GAW) is my favourite FTSE 100 share. Though if Wise was also in the blue-chip index, it would be a very strong contender. But it’s not and probably never will be after announcing plans to move its primary listing to the US.
Some people may be surprised by my choice. After all, on the surface, this is just a niche British retailer selling board games and plastic toy soldiers. Its high street stores aren’t exactly flashy, while cost-of-living pressures linger on.
Yet, Games Workshop’s share price has soared nearly 3,000% over the past decade. That’s not including dividends, which have regularly poured forth from the Warhammer 40,000 maker.
So, what’s so special about Games Workshop?
A unique company
Over the past few decades, Games Workshop has built a passionate global community that often treats Warhammer more like a lifestyle than just a hobby. Fans regularly meet up to play or paint the miniatures, or compete in tournaments.
In my eyes, this community element is what some investors underappreciate. The stores can double as social hubs and staff act as local champions for the hobby. Meanwhile, there’s a huge online ecosystem, ranging from casual players to serious hobbyists and collectors.
Crucially, Warhammer fans don’t just purchase a board game once, like with Scrabble or Monopoly. They regularly buy new armies, tubs of paint, limited editions, merch, video games, books, and more. There’s also a Warhammer+ subscription service.
All this means the brand is truly unique and customers stay very loyal, which is reflected in the financials. Between 2020 and mid-2025, sales more than doubled while profits soared at an even higher rate.
Through a powerful combination of largely fixed costs and strong pricing power, Games Workshop is incredibly profitable. Last year, its operating margin was above 42%!
Strong trading update
The stock jumped 13% to an all-time high of 18,182p today (20 November). This followed a characteristically brief trading update — totalling just 91 words — from the war game specialist.
For the six months to 30 November, it expects at least £310m in core revenue, which would represent 15% year-on-year growth. Pre-tax profit is “estimated to be not less than £135m”, up from £126.8m last year.
In January, investors will also get a £1 dividend for every share they hold. This brings the dividends declared so far in 2025/26 to £3.25, up from £1.85 at the same point last year.
Intellectual property
One figure that didn’t go up in the first half was licencing revenue, which is expected to fall to £16m from £30.1m. However, last year’s figure was boosted by the successful release of video game Warhammer 40,000: Space Marine 2.
Therefore, while being incredibly profitable, licensing revenue is unpredictable. So any slowdown in the core business selling miniatures and paints would be a setback, especially with the stock trading at an ultra-premium 30 times forward earnings.
Investors seeking a high-quality FTSE 100 company with unique characteristics might want to consider Games Workshop. But given the record stock price and high valuation, waiting for a dip could be a better option, in my opinion.
Over the long run though, I’m very optimistic, particularly with Amazon currently developing Warhammer TV and film projects. As Games Workshop says: “We own what we believe is some of the best underexploited intellectual property globally.”
