Shares round-up: Games Workshop, Glencore, ConvaTec, Croda

Games Workshop Group (LSE:GAW) today hailed its “straightforward approach” after delivering another year of record performance for revenue, profit and dividends to shareholders.

The Warhammer figurines firm operates with no debt, doesn’t hedge against currency movements and only distributes “truly surplus cash” to shareholders as a dividend.

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According to chair John Brewis, avoiding distraction means a “laser focus” on things under the company’s control such as intellectual property, its class-leading miniatures and giving customers the maximum opportunity to engage with and enjoy the products.

And despite global expansion, the Nottingham-based firm maintains control of manufacturing and logistics so that it can maximise margins and ensure its decisions are for the long term.

The fruits of the strategy were revealed in another set of strong annual results, although Brewis added today: “If it was easy - everyone would do it.”

A clean sweep of 12 months of profitable sales growth at constant currency meant the bottom-line haul of £203 million for the year to 2 June beat £170.6 million the previous year.

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Dividends declared and paid in the period amounted to 420p, up 5p. A cash buffer to account for three months of working capital and tax requirements, as well as future profit share payments, is considered before dividends are declared.

Shares recovered from a weak start to reach lunchtime up 300p to 10,500p. That’s a rise of 11% in just over a month but City broker Peel Hunt reckons 12,000p is achievable.

It said today: “The company had an excellent year with a strong product line-up. The long-term prospects continue to look compelling and the company is expanding its production.”

The shares were among several strong mid-cap performers as the FTSE 250 index rose by 190.35 points to its highest level in over two years at 21,442.42.

In contrast, the FTSE 100 index weakened as Diageo (LSE:DGE) was joined on the fallers board by Glencore (LSE:GLEN), ConvaTec Group (LSE:CTEC) and Croda International (LSE:CRDA) as updates failed to ease recent City jitters.

The setback for Glencore followed a production update which showed a 5% drop in copper production to 462,600 tonnes for the first six months. Highlighting a year of two halves, chief executive Gary Nagle expects to see output catching up with 2024 guidance by the year-end.

Shares fell 12.4p to 415p as the uncertain China outlook continues to weigh on the wider sector through lower commodity prices. It also means the widely held stock has fallen by 14% since the company received regulatory approval for its transformational deal to buy the steelmaking coal business of Canada’s Teck Resources.

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The combination appears to make top-up returns to shareholders less likely, while Glencore focuses on bringing down debt ahead of a potential New York coal demerger.

ConvaTec fell by 8.9p to 232.9p, continuing recent pressure on the FTSE 100-listed medical products firm amid concerns over the impact of Medicare reforms in the US.

The company reported broad-based growth across all four of its categories, which cover advanced wound, ostomy, continence and infusion care. It now expects 2024 revenues growth at the upper end of the 5-7% forecast range, although Peel Hunt pointed out today that first half earnings were slightly short of hopes.

Croda International lost another 153p to 3951p, having been one of the worst performing stocks in the FTSE 100 index during the first half of the year.

The chemicals firm reported a return to year-on-year growth in the second quarter thanks to the more stable market conditions, price discipline and continued operational progress.

The largest division of consumer care has offered particular encouragement, although this has been offset by a weaker than anticipated performance in life sciences due to continued de-stocking by customers in the crop protection sector. This means the group now expects adjusted profit of between £260 million and £280 million, down from 2023’s £308.8 million.