Pokémon hits profits at Games Workshop

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The Independent Online

Games Workshop, the fantasy games company hit by the success of the Pokémon card phenomenon, issued a fresh profits warning yesterday, saying a recovery would not take place until the second half of its current financial year.

Games Workshop, the fantasy games company hit by the success of the Pokémon card phenomenon, issued a fresh profits warning yesterday, saying a recovery would not take place until the second half of its current financial year.

Reporting a near-halving of full-year profits from £12.5m to £6.5m for the year to May, the company said tough trading conditions in Britain and continental Europe were continuing.

Games Workshop warned in April that the Pokémon craze had dented markets, with UK like-for-like sales falling. This position "has not yet changed significantly", the company said.

The second warning forced the shares down another 15p to 150p. They stood at more than 450p at the start of the year, having peaked at 857.5p in 1998.

Games Workshop specialises in role-playing fantasy games where players assemble armies of toy soldiers that have specific powers. The group's top game is Warhammer, which features characters such as Orc warlord Ghazghkull Thracka.

The games are played by adults and teenagers, but their popularity has suffered in the eight to eleven age group, with Pokémon a significant factor. To counter this Games Workshop is restructuring, with peripheral operations shut, stock control improved and more emphasis on sales and marketing.

In the year to May, group sales rose 7.5 per cent to £78m, with sales in the Americas up by 30 per cent. Tom Kirkby, the chairman, said: "By our standards this has been a disappointing year, but we are resilient and are taking radical action to address the position."

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