Press releases
Annual General Meeting: Trading update to 30 June 2007
05/07/2007
Peter Lewis, the Chairman of GAME, a leading European specialist retailer of PC and video games hardware and software, has made the following statement in advance of the Annual General Meeting at 10.00am today.
Trading Update
"The PC and video games market has grown strongly in this period and I am pleased to report that GAME is performing in line with our expectations for the first half of the year.
For the first 22 weeks to 30 June 2007, total Group sales (including Gamestation from 2 May 2007) were up by 74.1%. Like for like (lfl) Group sales (excluding Gamestation) for the same period were up by 45.6%.
In the UK and Ireland, total sales were up by 71.1% and lfl sales were up by 46.6%. In our International business, total sales and lfl sales were up by 82.8% and 42.6% respectively.
The Sony Playstation 3 launched on 23 March 2007. If we exclude all sales of the PS3 product category the UK and Ireland lfl sales were up by 24.6% (excluding Gamestation) and the International lfl sales were up by 20.1%.
Consumer demand remains strong for all formats, particularly for the Nintendo Wii. However, the UK trading environment in particular continues to be very competitive with retailers expanding their PC and video games offer to capitalise on the growing market.
As we said in April, the higher volumes of new generation platforms will increase hardware participation in the sales mix for the year to January 2008. The substantially lower margins achieved on hardware compared to software will reduce gross margins. The acquisition of Gamestation will also impact margins, as Gamestation has traditionally operated on lower margins than GAME. Taken together, the Board anticipates that gross margin for the half year will be around 230 basis points lower than the same period last year and for the full year will be around 250 basis points lower than last year. (Note 1).
Notwithstanding the decline in gross margin referred to above, we expect the group to report a net profit before tax of between £1m and £3m for the half year to 31 July 2007, before non-recurring costs relating to the acquisition of Gamestation.
We look forward to the second half of the year and the key Christmas trading season with an unprecedented range of products available. We will continue our expansion and grow our existing portfolio of 1,065 (Note 2) stores with up to 50 additional stores opening by our key Christmas trading period. The majority of the store openings will be outside of the UK."
Acquisition of Gamestation
"On 2 May 2007 we acquired Gamestation, a UK PC and video game retailer with 217 stores. As anticipated at the time of the announcement, to satisfy the regulatory process The Office of Fair Trading is reviewing the transaction, and we anticipate that this initial review will be completed by the end of July."
Notes:
- Group gross margin for the 6 months to 31 July 2006 was 28.3% and for the 12 months to 31 January 2007 was 27.2%
- Store portfolio
| As at 31 January | 30 June 2007 Number |
31 January 2007 Number |
|---|---|---|
| Company owned and concessions | ||
| UK and Ireland - GAME - Gamestation |
410 219 |
407 - |
| 629 | 407 | |
| France | 159 | 130 |
| Scandinavia | 60 | 64 |
| Iberia | 170 | 165 |
| 389 |
359 |
|
| Australia | 19 | 16 |
| International | 408 | 375 |
| Total owned and concessions | 1,037 | 782 |
| Franchises | ||
| France | 7 | 11 |
| Iberia | 15 | 18 |
| Australia | 6 | 6 |
| Total franchises | 28 | 35 |
| Total operational outlets | 1,065 | 817 |
Enquiries:
| The GAME Group plc | Lisa Morgan Group Chief Executive |
+44 (0)1256 784011 |
|---|---|---|
| David Thomas Deputy Chief Executive and Group Finance Director |
+44 (0)1256 784011 | |
| Brunswick | Jonathan Glass Wendel Verbeek Ash Spiegelberg |
+44 (0)20 7404 5959 |
