Press releases
Annual general meeting: trading update to 2 July 2005
06/07/2005
Peter Lewis, the Chairman of GAME, Europe’s leading retailer of video games, has made the following statement in advance of the Annual General Meeting at 10.00am today.
“For the first 22 weeks to 2 July 2005, total Group sales were up by 6.3%. Like for like (lfl) Group sales for the same period were down by 2.6%.
In the UK and Ireland total sales were up by 0.5% and lfl sales were down by 5.4%. In Continental Europe total sales and lfl sales were up by 37.2% and 12.0% respectively.
The successful launch of the Nintendo DS in March mitigated an otherwise tough retail environment. As we reported in April our gross margins have reduced reflecting a higher proportion of lower margin hardware sales and cyclical deflation in software selling prices, which is consistent with the previous cycle. Consequently, we anticipate that first half gross margin will be 100 to 125 basis points lower than the corresponding period last year. Trading conditions continue to be challenging with ongoing price deflation and a continued lack of strong software releases.
There are underlying inflationary pressures within the business, particularly with regard to rent and rates. However, our cost base is tightly controlled and we have continued to drive through cost reduction initiatives.
Looking forward, the planned September launch of Sony’s new handheld “PSP” will benefit our second half as will our Europe wide store opening programme which is on track for 80 new stores this year. Our portfolio (including franchises) will exceed 700 stores by the key Christmas trading period.
The eagerly anticipated Xbox 360 and PlayStation 3, are expected to make significant contribution to our sales in 2006 and beyond.
Settlement of legal claim
The legal claim arising from the 2001 acquisition of our French business (ABC Games International SA), which was disclosed as a contingent liability for an amount of €22.8 million in our annual accounts for the two years ended 31 January 2005, has been settled for €3.1 million. The Board felt that the claim itself had little merit but when taking account of the litigation and reputation risk, considered that it was in the best interests of the Group to agree to a settlement. This amount will be treated as a charge to the profit and loss account in the 6 months to 31 July 2005.
The Board
Mr William Slee (Senior non-executive director) has indicated his intention to reduce the number of his non-executive directorships and will retire from the Board in September 2005. I would like to thank him both personally and on behalf of the Board for his contribution throughout his time with us. A replacement appointment will be made in due course.”
International Financial Reporting Standards (IFRS)
The Company will make a statement regarding the impact of the change to International Financial Reporting Standards on Wednesday, 20 July 2005.
Enquiries:
| The GAME Group plc | Martin Long Group Chief Executive |
+44 (0)1256 784085 |
|---|---|---|
| David Thomas Group Finance Director |
+44 (0)1256 784085 | |
| Simon Soffe Head of PR |
+44 (0)1256 784442 | |
| Brunswick | Jonathan Glass Wendel Verbeek Ash Spiegelberg |
+44 (0)20 7404 5959 |
