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This good UK inventory has risen from £99 per share on the flip of the yr to round £143 immediately. I consider it might be one of many FTSE 100‘s finest performing shares in 2025 as properly.
Right here’s why.
Fantasy hero
Video games Workshop (LSE:GAW) shares haven’t hit the Footsie simply but. However they’ll get a seat among the many large boys simply earlier than Christmas, on 23 December.
Different upcoming promotions from the FTSE 250 are Alliance Witan and St James’ Place.
Because the begin of 2024, Video games Workshop’s share value has surged a whopping 45%. It now has a market cap of £4.7bn, which — on the face of it — is outstanding, contemplating the area of interest merchandise that it specialises in.
Beloved merchandise
In a nutshell, the enterprise designs, manufactures, distributes, and sells miniature plastic fashions in package kind. People select from a variety of figures that they construct and paint, after which put into battle in tabletop wargaming eventualities.
This isn’t certainly one of your on a regular basis industries, then. However make no mistake: this can be a fast-growing international phenomenon, and Video games Workshop has positioned it on the forefront with market-leading franchises like Warhammer 40,000.
Gathering and constructing Warhammer miniatures is very addictive, and has led to Video games Workshop’s merchandise being playfully known as ‘plastic crack.’ This permits gross sales to stay broadly secure even throughout downturns. It additionally means the corporate enjoys beautiful revenue margins (core gross margins have been 69.4% within the final monetary yr).
Value drivers?
However what could lead on Video games Workshop’s shares even increased in 2025?
One potential driver might be additional sturdy product launches. New releases have offered like proverbial scorching desserts in current quarters, with pre-orders (particularly on Warhammer 40,000 merchandise) promoting out inside minutes on Video games Workshop’s personal web site, alongside these of third-party retailers.
One other might be speedy gross sales will increase as the corporate grows its international retailer property and improves its on-line store. Hovering curiosity for fantasy gaming means it now has 548 shops, up from round 420 a decade in the past.
Video games Workshop might additionally see an additional sharp rise in licencing income, which rose 22% within the final monetary yr. The agency is seeking to more and more licence its mental property to media and leisure firms, and is in talks with Amazon to provide tv and movie content material based mostly on Warhammer 40,000.
A prime purchase
It’s essential to notice that Video games Workshop’s shares carry a meaty premium at present costs. A price-to-earnings (P/E) ratio of 29.1 occasions is approach above the FTSE 100 common of 14.3.
This may occasionally not solely restrict additional value beneficial properties within the new yr. It might even immediate a value reversal if earnings come beneath surprising stress, reminiscent of from rising prices or rising aggressive threats.
However on stability, I’m nonetheless anticipating the corporate to be one of many Footsie’s finest peformers in 2025.
I already personal Video games Workshop shares in my Self-Invested Private Pension (SIPP). And I’m planning on shopping for extra as quickly as I subsequent have spare money to take a position.
