Within my SIPP, I hold a fairly diverse basket of companies, each selected to do one simple task – generate passive income. This includes a mix of lower and higher yielding dividend stocks like LondonMetric Property (real estate), Greencoat UK Wind (renewables), and Ecora Resources (mining).
But my largest position is Games Workshop (LSE:GAW) at a pretty substantial 30%.
What initially started as a modest position has grown a lot over the years. And so far, I haven’t had a good reason to sell a single share.
Obviously, letting portfolio positions grow unchecked introduces some significant capital concentration risk. But in the case of Games Workshop, that’s a risk I’m willing to take. In fact, I’m even considering buying more shares. Here’s why.
Exceptional success
As a niche retailer of expensive plastic miniatures, Games Workshop doesn’t immediately sound like a particularly enticing investment. But after spending decades cultivating a cult-like following from its core audience, the company arguably ranks among the top businesses in the world when it comes to pricing power.
Subsequently, this UK stock is actually one of the most successful investment stories of the last 25 years. Fun fact: a £10,000 initial investment at the start of 2000 is now worth a staggering £1.3m. And at the same time, while it hasn’t been a smooth ride, dividends have surged from 9.9p per share all the way to 560p on a trailing 12-month basis.
[fool_stock_chart ticker=LSE:GAW]
An incoming surge in 2026?
As we approach the winter holidays, the company’s Christmas Warhammer Battleforce boxes are set to help bolster sales and offset the impact of US tariffs in the immediate term. But looking out to 2026 and the anticipated launch of Warhammer 40,000 11th Edition, the group’s ongoing momentum could be set to accelerate.
Each new Edition of the group’s flagship tabletop hobby has historically been met with enormous enthusiasm and a spike in word-of-mouth activity. These intangible metrics are hard to quantify. But looking back at the launch of 10th Edition in June 2023, the firm swiftly announced a trading update with record sales and profits that vastly exceeded analyst expectations.
The same thing happened in July 2020 with the launch of 9th Edition despite the massive disruptions of the pandemic. And while there’s no guarantee this pattern will repeat, the business has continued to see its miniatures sell out repeatedly throughout 2025, signalling continued strong demand.
What to watch
2025 has been yet another record year for the business. But it’s been helped massively by a large jump in royalty income thanks to the success of the video game Space Marine 2.
This royalty income is expected to shrink significantly next year due to a lack of other major third-party game releases. And that could open the door to some tough comparables.
Even if the launch of 11th Edition exceeds expectations, overall growth could prove lacklustre compared to previous years as performance is ultimately offset by lower royalty income. And with the shares trading at a premium, this headwind may not be priced into the stock. In other words, Games Workshop shares could see some volatility in the coming quarters. Nevertheless, with its long-term trajectory continuing to impress, these potential dips could turn out to be phenomenal buying opportunities that I’m keen to capitalise on within my SIPP.
