Press releases
The GAME Group plc - Christmas 2008 Trading Statement
15/01/2008
Trading update:
The GAME Group plc ('GAME') is today providing an update on its trading performance over the Christmas period and for the 50 weeks to 12 January 2008.
Sales for the 6 week period ended on 12 January 2008:
- Total Group sales (including Gamestation) increased by 76.3%. Group like for like (lfl) sales (excluding Gamestation) were up by 31.9%.
- Total sales for the UK and Ireland increased by 77.9% with lfl sales up by 30.3%.
- Total sales for International increased by 72.8% with lfl sales up by 35.4%.
Sales for the 50 week period ended on 12 January 2008:
- Total Group sales increased by 86.7%. Group lfl sales were up by 41.7%.
- Total sales for the UK and Ireland were up by 89.6% with lfl sales up by 42.9%.
- Total sales for International increased by 79.0% with lfl sales up by 38.5%.
Commenting on the Christmas trading period Peter Lewis, Chairman said:
“The Group has delivered an outstanding Christmas sales performance particularly given the very strong comparatives for the prior year period when the Nintendo Wii launched. The management team and all of our employees have done an excellent job in delivering a market leading performance for the third consecutive Christmas.
Our customer demographics are changing, with more women and mature gamers buying products than ever before. Our strategy of evolving our specialist proposition to meet the demands of these customers has driven our record growth.
The Board now expects the Group profit before non recurring costs (note 1) and tax for the year to 31 January 2008 to be not less than £73m (2007: £29.5m).”
The top selling games during the period were FIFA 08 (publisher - EA Sports), Call of Duty 4: Modern Warfare (Activision), Pro Evolution Soccer 2008 (Konami), The Simpsons Game (EA Games), and Assassin’s Creed (Ubisoft) – all available on a range of formats. There was also an exceptional performance from some single format games including Mario and Sonic at the Olympic Games (Sega) for the Nintendo Wii, and Dr Kawashima’s Brain Training (Nintendo) for the Nintendo DS. Demand for both the Nintendo Wii and DS Lite consoles continued to exceed supply.
As we said last month, the ongoing popularity of all formats has increased the hardware share of total sales for the year to January 2008. The substantially lower margins achieved on hardware, and overall lower margins from Gamestation, have combined to reduce our gross margin. Taken together, the Board maintains the view that the gross margin for the full year will be around 290 basis points lower than last year.
Competition Commission:
On 5 December 2007 the Group welcomed the Competition Commission’s provisional clearance of the acquisition of Gamestation. The final report is expected no later than 23 January 2008.
Outlook:
The current range and quality of products in the market is unprecedented. We are confident that consumer demand for our products will remain strong as we approach the March anniversary of the launch of the Sony PS3, and that the supply of the Nintendo Wii and DS Lite consoles will continue to improve.
Next year the existence of five successful hardware formats and the evident broadening consumer appeal should stimulate further growth. Following three years of market leading lfl growth, we expect limited lfl growth during 2008 given the strong comparative period, accompanied by an improvement in the gross margin as the proportion of software in the sales mix increases.
The Board remains confident with the Group outlook for the year to 31 January 2009.
The Game Group plc will report its Preliminary Results for the 12 months to 31 January 2008 on Tuesday 22 April 2008.
Notes:
1. Non-recurring costs
The costs to the Group of complying with the requirements of the Competition Commission inquiry are anticipated to be around £4.5m in total, plus a non-recurring charge of approximately £3.5m related to integration connected with the acquisition of Gamestation.
2. Store numbers
| As at | 12 January 2008 Number |
8 December 2007 Number |
31 January 2007 Number |
|---|---|---|---|
| Company owned and concessions | |||
| UK and Ireland - GAME - Gamestation |
415 235 |
414 237 |
407 - |
| 650 | 651 | 407 | |
| France | 169 | 167 | 130 |
| Scandinavia | 62 | 62 | 64 |
| Iberia | 209 | 203 | 165 |
| Continental Europe | 440 | 432 | 359 |
| Australia | 51 | 45 | 16 |
| International | 491 | 477 | 375 |
| Total owned and concessions | 1,141 | 1,128 | 782 |
| Franchises | |||
| France | 7 | 7 | 11 |
| Iberia | 10 | 11 | 18 |
| Australia | 4 | 4 | 6 |
| Total franchises | 21 | 22 | 35 |
| Total operational outlets | 1,162 | 1,150 | 817 |
Enquiries
| GAME Group plc | Lisa Morgan, Chief Executive David Thomas, Deputy CEO and Group Finance Director Simon Soffe, Head of Investor Relations and Group Communications |
|
|---|---|---|
| Brunswick | Jonathan Glass Wendel Verbeek Ash Spiegelberg |
