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Investing.com -- Shares of Games Workshop (LSE:GAW) tumbled by 3.15% on Friday after the company provided an update on its financial guidance for FY25.
The latest update indicated that while the company expects to surpass market expectations for profit before tax (PBT), it does not anticipate the record level of Licensing revenue driven by Space Marine 2 to be repeated in FY26.
Games Workshop announced its core revenue is projected to reach approximately £560 million, marking a 13% increase YoY, and Licensing revenue is expected to surge to around £45 million, a significant 167% rise.
Consequently, the group’s PBT for FY25 is forecasted to be around £255 million, comfortably ahead of market consensus, which was around £240 million.
Notably, the second half of FY25 is set to see an operating profit of £210 million, reflecting a 22% growth, accelerating from the 18% growth observed in the first half.
Despite the positive outlook for FY25, Games Workshop has cautioned that the exceptional Licensing revenue from Space Marine 2 is not expected to be replicated in FY26.
Analysts at Jefferies have commented on the update, acknowledging the "remarkable year" for Games Workshop, bolstered by the success of Space Marine 2 and a core profit increase of 20%, even when compared to the challenging comparatives from the Warhammer 40,000 franchise.
Looking ahead, FY26 may be a quieter year in terms of new releases, but the company’s core business momentum remains robust, with significant developments on the horizon, including an Amazon (NASDAQ:AMZN) series, the 11th edition of Warhammer 40,000, and the development of Space Marine 3.
Investors seem to be digesting the mixed signals, appreciating the strong performance in FY25 but also weighing the potential slowdown in Licensing revenue growth for FY26.
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