Former taxman makes a killing with fantasy war games

A former tax inspector who runs his business from a Portakabin in Nottinghamshire is proving to be one of the winners in the cut-throat toys and hobbies industry of the 1990s.

In a market increasingly dominated by computer games, Tom Kirby's Games Workshop is recording booming sales and profits. Operating as both a manufacturer and retailer, the company produces a range of fantasy war games based on the Warhammer theme.

While the UK and US toy markets are seeing sales volumes down by 5 per cent year-on-year, Games Workshop yesterday reported a 47 per cent increase in profits, making pounds 9m on sales 40 per cent higher at pounds 45m.

The company opened 25 new shops last year, taking the total to 118 world- wide. Its monthly magazine, White Dwarf, which gives users tips on new game strategies, is selling 100,000 copies a month.

Updated versions of the miniature toy armies are launched regularly and shipped from the factory next to the Portakabin. Teenage boys and older generations rush to snap up the additions to armies with names like Orks and Goblins, Dark Elves and Imperial Guard. Devotees often play the warrior board games for days, or even weeks. A new game called Warhammer Battle is planned for September. Mr Kirby, a Yorkshireman who even addresses City bankers wearing jeans and a T-shirt, says the success of the company should come as no surprise.

"I know we make toy soldiers but we quite definitely do not see ourselves as being in the toy market. We are dealing with enthusiasts who love their hobbies. In our shops we teach people how to play the games and how to paint the characters. It becomes an obsession. It's completely different to buying a few toys and then chucking them away."

He likens Games Workshop to the hobby companies of the 1950s such as Hornby and Meccano. "Kids' teens is when they get really interested in certain things. Some stay with us for just a few years, others stay for life. We always say that our main competition is sex and drugs and rock 'n' roll. People go to college and they find other things."

Games Workshop is already looking for new markets to explore. It has started an operation in Hong Kong and has yet to sell its games in Japan, where Mr Kirby feels they will be popular.

The company also has operations in Europe, where sales rose by 69 per cent last year, Australia and the US. In America the company has switched to direct selling after struggling to find suitable distributors.

The company has proved hugely lucrative for Mr Kirby. Shares in the company have tripled in value since floating on the stock market at 115p in 1994. Yesterday they rose a further 3p to 447p.

Earlier this year Mr Kirby sold shares worth just over pounds 3m, though he is not planning a huge spending spree.

"I am from Yorkshire and so is my wife. We've put it in the building society, though we might buy a little cottage by the sea."