Business Deconstructed - Games Workshop

Project Report, 2012

26 Pages, Grade: 2.1



Company Profile

Legal Form
Advantages and Disadvantages of a Public Limited company

Company/Shareholder Relationship

Financial Strategy
Horizontal Analysis
Key Financial Ratios
Proposed Strategy

Implementing Strategy

Organisational Structure



Company Profile

For the assignment the report will be evaluating the British company Games Workshop Group PLC. The Games Workshop principle activities are the design, manufacture and retail of miniature figures, metal soldiers and rulebooks. It offers its products under Warhammer and Warhammer 40,000 brands and operates in the UK, USA, Canada, France, Germany Spain, Italy, Japan and Australia. It is headquartered in Nottingham, the UK and employs around 2,066 people.

The business was founded in in 1975 and was originally a manufacturer of wooden board games and later became an importer of the Dungeons & Dragons role playing game from the United States and expanded from a mail order company to opening its own retail shop in 1979. The company continued its growth in the 80’s and 90’s and floated on the London Stock Exchange in October 1994. In 2011 Games Workshop reported a turnover of £123,100,000

The assignment is looking at how legal form determines the company’s relationship with the stakeholders. To do this effectively the report will look at what legal form is and what shareholders are?

Legal Form

There are various legal forms in Business which can be seen in the following table and also gives a brief description of advantages and disadvantages of each

illustration not visible in this excerpt

Games Workshop Group plc is a public limited company. Public Limited companies can offer shares of the company for sale to the public as stated by the UK Companies Act 1980. For a business to be a public liability company, the business must have plc at the end of the name and must register with Companies House which is an Executive Agency of the Department for Business. For a business to be formed as a plc it must have

- A certificate of entitlement to do business and borrow capital
- A minimum of £50,000 of share capital, of which 25% must have been paid for.
- Two directors, one of whom may be the company secretary.
- Two shareholders
- Section 86 of the Companies Act 2006 requires all plc’s to have registered address


Clayton (2008) states that a limited company as

“A ‘separate legal identity’. Profits and losses are the company’s and has its own debts and obligations. The business continues despite the resignation, death or bankruptcy of management and shareholders and it offers the ideal vehicle for expansion and the participation of outside investors.”

Clayton writes that a public limited company is the “the ideal vehicle for expansion” and this refers to a plc offering shares for sales to the public. Companies can do this to generate money for the business to possibly invest or expand, and in return a percentage is paid to the shareholder in a dividend1.

Advantages and Disadvantages of a Public Limited company

Bové et al (2005) writes that the main advantage of a public limited company is that it has unlimited capital available to them through the investment from shareholders. This gives a public limited company the opportunity to invest in marketing, development or expansion easier than a private organisation due to access of capital. This investment by shareholders also means that the shareholders have a vested interest in the business, and with this comes a responsibility of the business to the shareholders as well. Also as there are shareholders to take into consideration, this could hold back a business from being more revolutionary due to financial risks and also shareholders may not want to take risky business decisions as it may affect their share value. These reasons are the disadvantages of a plc.

This section has touched upon shareholders, and the next section goes into detail about what they are.


The assignment brief asks how the company’s legal form determines the organisations relationship with its stakeholders (the emphasis should be on the investor stakeholder group. Figure 1 shows who the stakeholders are in the Games Workshop Group plc.

illustration not visible in this excerpt

Figure 1 showing the companies stakeholders

As the assignment has specifically identified the investor stakeholder group, the report will look at the relationship between the two.

Shareholders (or stockholders2) have been defined by William (2005, p179) as

“people who own a coprporations stock- and thus own part of the corporation – are called stockholders or sometimes shareholders. Once a corporation has been formed, it may sell its shares to individuals or other companies that want to invest in the corporation. It also may issue stock as a reward to key employees in return for services.”

People who invest into a business would do so by purchasing shares in the company, and for this investment the person becomes a shareholder and, if the company creates a profit, the shareholder is entitled to a part of the profit called a dividend. With this in mind, the shareholder has a vested interest in the company, and for the business to be run in a manner that protects the shareholders’ investment, shareholders vote for a ‘director’ who would be responsible for the everyday running of the company. (Dine, 1994)

Company/Shareholder Relationship

The relationship between the shareholder and the company is controlled by Corporate Governance and is a way of protecting the shareholders interest. This is done by enabling shareholders to

- Secure methods of ownership registration
- Transfer shares
- Obtain information on the corporation
- Participate and vote in shareholder meetings
- Elect members of the board
- Share in the profits of the company.

(Tricker, 2003)

The annual report of the Games Workshop Group plc stipulates on page 15 that

“The Listing Rules of the Financial Services Authority require listed companies to disclose, in relation to section 1 of the June 2008 Combined Code on Corporate Governance (the Combined Code), how they have applied its principles and whether they have complied with its provisions throughout the accounting period. The Combined Code can be found at .

This statement, together with the remuneration report on pages 19 to 22, explains how the Company has applied the principles and complied with the provisions set out in the Code.”

The annual report also informs the reader that the board operates through monthly meetings, however the Companies Act 2006, section 336 stipulates

“ Every public company must hold a general meeting as its annual general meeting in each period of 6 months beginning with the day following its accounting reference date”

The annual report is to ensure that all shareholders are aware of how the company is performing.

The Annual Report also offers information to prospective investors with the figures from the balance sheet; however investors would look at specifically at the Independent Auditors Report. This report gives information on the validity of the annual reports results and this can be found on page 25. For the Games Workshop Group plc the Independent Auditors Report states that

“In our opinion

- The financial statements give a true and fair view of the state of the groups and of the parents companies affairs as of 29th May 2011”

The overall aim of corporate governance is to ensure that the people, who run the company, do so for the good of the company and not for the personal gain of themselves.


Excerpt out of 26 pages


Business Deconstructed - Games Workshop
New College Durham
BA Management
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ISBN (eBook)
ISBN (Book)
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1507 KB
Business Deconstructed, New College Durham, BAM, BAMBA
Quote paper
Dave Ray (Author), 2012, Business Deconstructed - Games Workshop, Munich, GRIN Verlag,


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