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Interim Results for the six months ended 31 July 2008

30/09/2008

THE GAME GROUP PLC, Europe's leading retailer of PC and video games products, today announces interim results for the six months ended 31 July 2008.

Highlights

All figures in £'m (unless stated)	Six months ended 31/7/08	Six months ended 31/7/07
Group turnover	743.4	482.4
Gross profit margin (%)	27.0	25.8
Operating profit before non-recurring costs	39.0	6.2
Non-recurring costs	3.0	1.4
Profit before non-recurring costs and tax	36.4	2.7
Profit before tax	33.4	1.3
Basic earnings per share before non-recurring costs (pence)	7.66	0.67
Basic earnings per share (pence)	6.78	0.27
Interim dividend per share (pence)	1.79	1.43
Trading store numbers	1,245	1,084
Trading square footage (sq. ft.thousands)	1,296	1,123

Operational and financial highlights

• Record first half profit of £36.4m before non-recurring costs and tax (2007: £2.7m)
• Strong sales performance across the Group with total sales growth of 54.1% and like for like (‘lfl') sales ahead by 22.2%
• Good international performance with sales up 64.2% and lfl sales up 17.4%
• Gross margin up by 120 basis points for the half year compared to the same period last year (see full year guidance below)
• Gamestation integration progressing better than anticipated and we are on track to deliver £9m of synergies in the current year an increase of £2m from our prior guidance (see full year guidance below)
• Further broadening our reach with an acquisition, post the half year, in the Czech Republic of a 19 store specialist retail chain and a 33 store concession deal with Borders in the UK
• Store portfolio will be over 1,300 by the key Christmas trading season compared to 1,150 at the same time last year
• Strong balance sheet and minimal gearing
• Interim dividend increased by 25% to 1.79p
• Current trading remains good with total sales increase of 14.6% and lfl increase of 4.9% for the 8 weeks to 20 September (Prior year total sales lfl for the comparable period up by 44.9%) (see full year guidance below).

Revised Guidance

• Due to a strong performance to date and positive outlook, we have raised our guidance for the Group's full year LFL sales performance from 5-10% to 8-12%
• Gross margin growth guidance (including the gross margin benefit of the Gamestation synergies) for the full year raised to 80 – 110 basis points ('bps') from 50 - 100 bps
• Gamestation synergy guidance raised for the current year from £7m to £9m and a total of £14m of annualised benefits expected in the year to 31 January 2010

Peter Lewis, Chairman, said:
"I am very pleased to report a record first half for the Group with a very significant increase in profit before taxation and non-recurring costs to £36.4m (2007: £2.7m). The business has performed extremely well with both turnover and profit growth throughout the Group.

We deliver a compelling customer experience. Our specialist proposition is centred around customer service, our pre-owned offer, our Reward Card and our online capabilities, all of which have contributed to this success.

The third generation consoles are all in good supply. Demand has continued to be strong and the installed console base now stands at over 17.3 million in the key UK market. This level of console ownership has been achieved in just three years compared to second generation consoles which took a seven year period from 2000 until 2007 to reach similar levels.

Due to a strong performance to date, a broad and growing installed base of console ownership, and a strong pipeline of new and innovative software, we have raised our guidance for the Group's full year LFL sales performance from 5-10% to 8-12%.

We recognise the extraordinarily challenging and uncertain market conditions in which we are operating today, and we cannot be immune to wider economic uncertainties. However, we continue to be encouraged by the ongoing demand for third generation hardware and software which is in part being driven by the broadening demographic appeal. In addition, playing games provides a more affordable alternative to many other family leisure activities and we remain committed to delivering our customers the widest choice and value for money.

We look forward to the key Christmas trading period and remain confident in the outlook for the Group."

A presentation to investors and analysts will be held today at 9.30am (BST) at The City Presentation Centre, 4 Chiswell Street, EC1Y 4UP.

A live webcast of the presentation to analysts will be available on the Company's website at www.gamegroup.plc.uk from 9.30am (BST) today and will be available to view on demand from approximately 2.00pm (BST).

Enquiries:

The GAME Group plc	Lisa Morgan Group Chief Executive	+44 (0)1256 784050
	David Thomas Deputy CEO & Group Finance Director	+44 (0)1256 784085
	Simon Soffe Head of Investor Relations and Group Communications	+44 (0)1256 784162
Brunswick	Jonathan Glass Wendel Verbeek Ash Spiegelberg	+44 (0)20 7404 5959

www.gamegroup.plc.uk

View the full press release in PDF format.

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