Press releases
Trading Statement
03/03/2008
The GAME Group plc (“GAME”), the leading European retailer of PC and video games products, is today providing a trading update as it enters its close period.
Financial year ended 31 January 2008
Further to the Christmas Trading Statement released on 15 January 2008 the Board expects that Group profit before taxation and non-recurring costs for the year to 31 January 2008 will be not less than £74m (2007: £29.5m) - slightly ahead of the £73m indicated previously.
Gamestation
On 16 January 2008 the Competition Commission announced that the acquisition of Gamestation had received final unconditional clearance.
At the time of the acquisition in May 2007 the Board anticipated realising cumulative pre-tax synergies of approximately £7m by April 2009. Given the preliminary outcome of work undertaken since the clearance decision, the Board considers that these can now be achieved fully within the current financial year and then annually thereafter. A further update on synergies will be provided at the time of the Preliminary Results announcement on 29 April 2008.
Current trading and outlook
The Group has traded well since the commencement of the new financial year and has continued to experience strong consumer demand for the unprecedented range of products in the market. The existence of five successful hardware formats and the evident broadening consumer appeal will also stimulate further growth.
We announced on 15 January 2008 that, following three years of market leading like for like (‘lfl’) growth with lfl sales up c43% for the 50 weeks ended 12 January 2008, we expected relatively limited lfl growth during the current financial year. The Board now believes that lfl growth of between 5% and 10% for the current year is achievable. We note that in the first quarter there are particularly strong comparatives as a result of the launch of the PS3 in March 2007.
In addition we anticipate the gross margin will improve by between 50 and 100 basis points for the year, as the proportion of software in the sales mix increases and we achieve benefits arising from the Gamestation acquisition.
There is a strong pipeline of innovative software with some highly anticipated products scheduled for European release in the next few months. These include Mario Kart for the Nintendo Wii on 11 April, Nintendo Wii Fit * on 25 April, and GTA IV ** on 29 April.
The Board believes that the market for PC and video games products remains buoyant. With a large and growing installed base of hardware in the market, a strong line-up of new product launches, the PS3 yet to reach the first anniversary of its launch and the benefits of a full year of the Gamestation acquisition in prospect, the Board remains very confident in the outlook for the 53 weeks to 31 January 2009.
As previously announced GAME will release its preliminary results on 29 April 2008.
Notes
*. Wii Fit launched in Japan on 1 December 2007 and sold over 1.4m units by 20 February 2008 (source: Nintendo press release).
**. This product is the follow on to GTA: San Andreas, which launched on 29 October 2004 and sold 677,000 units in the UK market in the opening week (source: ChartTrack)
