Press releases
Christmas 2003 Trading Statement
09/01/2004
- Record Sales and Profits expected for the fourth consecutive year
- GAME increases Market Share
- Strong sales growth at lower average selling prices
The GAME Group Plc (‘GAME’) announces that sales in its core UK market for the 5 week period ended 3 January 2004 increased by 9%. Like for like sales were up 5.6% and in the year to date GAME has increased its software unit sales by over 25%*. Total Group turnover for the 11 months to 3 January 2004 rose by 9% with like for like sales up 2%.
By contrast, the total UK market for video games and computer software in 2003, as reported by ChartTrack, declined in value by 1.5%* largely driven by lower manufacturer prices for console hardware which saw a 15%* drop in value on similar volumes. Software sales for the market benefited from the ever increasing installed base with a 15%* increase in volume, delivering record sales up 7%* in value. Best selling software for the key Christmas season included, Need for Speed Underground, Medal of Honor Rising Sun, and FIFA 2004 from Electronic Arts; Simpsons Hit and Run from Vivendi; Tony Hawks Underground and True Crime: Streets of LA from Activision; the Eye Toy from Sony plus increasing demand for Dance Mats.
From the outset of the financial year, the strategy for the Group has been to use its competitive advantages as a specialist to attract new customers, as our products increase their mass market appeal. As the leading specialist in an increasingly challenging market, the Group was able to source a series of strong Christmas promotions, coupled with our high standards of personal customer service in the stores. This, together with our targeted marketing, advertising campaigns and extensive communication with our customers who hold a GAME Reward Card (membership now at 4.5m), ensured that once again the Group outperformed the industry and delivered market share gains in both hardware and software.
The policy pursued through the year by manufacturers of reducing console selling prices distorts like for like value comparison in the short term. Console sales represented approximately a quarter of the total market value and selling prices were around 20% lower in the fourth quarter compared with the previous year. However, there is both the medium and longer term benefit from the increased demand for software prompted by wider hardware ownership and the installed base for the current generation of hardware formats in the UK having increased in 2003 by 60% to over 10 million**, with Sony’s PS2 being the clear market leader with over 50% of the market to date.
Our European businesses continued their improvement but, as yet, these three territories represent a small proportion of our activities and are not yet material to the Group’s results.
The Board of GAME also reports:
- the on-line gaming division is closed with immediate effect. One-off closure costs, which are not expected to be material, will be treated as an exceptional charge. Future annual savings are forecast to be in the region of £500,000.
- E.Commerce will still be vigorously pursued on the dedicated GAME.net website. Indeed, online sales in the Christmas period, increased by over 80%.
- the appointment of a Group Financial Director to succeed Martin Long will be announced shortly.
As a result of this successful trading period the Board is confident that the results for the year to 31 January 2004, for the fourth consecutive year, will show record sales and profits, which before taxation, goodwill amortisation and any exceptional charge, will be in line with current market consensus.
Peter Lewis, Chairman of GAME commented:-
- “These are good trading results demonstrating our ability to adapt quickly and effectively and to win customers in a fast changing retail environment. We have improved on our already leading UK market position with an increase in our market share of more than 1%*. We now look forward without complacency to what is likely to be another challenging year.”
* source: ChartTrack
** source : ChartTrack (includes PS2/Xbox/Gamecube/GBA/SP)
For further information please contact:
| The GAME Group | ||||
| Martin Long | CEO Designate | 01344 464085 | ||
| Lisa Morgan | Deputy Chief Executive Designate | |||
| Financial Dynamics | ||||
| Charlie Armitstead | 020 7831 3113 | |||
| Nic Bennett |
