Christmas 2008 Trading Statement
January 13 2009 - 2:00AM
UK Regulatory
RNS Number : 5152L
Game Group PLC
13 January 2009
13 January 2009
The GAME Group plc
Christmas 2008 Trading Statement
The GAME Group plc ('GAME' or 'the Group') is today providing an update on its trading performance over the Christmas period and for the
50 weeks to 10 January 2009.
Sales for the 6 week period ended on 10 January 2009
* Total Group sales increased by 16.6%. Group like for like ('lfl') sales were up by 5.4%.
* Total sales for the UK and Ireland increased by 16.3% with lfl sales up by 10.0%.
* Total sales for International increased by 17.3% with lfl sales down by 3.0%, both on a constant currency basis.
Sales for the 50 week period ended on 10 January 2009
* Total Group sales increased by 24.2%. Group lfl sales were up by 9.5%.
* Total sales for the UK and Ireland increased by 22.7% with lfl sales up by 11.4%.
* Total sales for International increased by 28.1% with lfl sales up by 5.0%, both on a constant currency basis.
Commenting on the announcement Peter Lewis, Chairman said:
"The Group has delivered a strong Christmas sales performance in a very difficult trading environment.
The existence of five successful hardware formats throughout the year has, as anticipated, led to an increase in the proportion of
higher margin software in the sales mix. This trend continued through the Christmas trading period and combined with the success of other
margin enhancing initiatives we expect that Group gross margin for the 53 weeks to 31 January 2009 will be around 140 basis points ahead of
last year at 26.2% and slightly ahead of our previous guidance.
The Gamestation integration is progressing well and we now expect to deliver synergies of �10m, ahead of our previous guidance of �9m,
in the 53 weeks to 31 January 2009.
The Group has traded well in the year to date and the Board now expects the Group profit before non recurring costs and tax for the 53
weeks to 31 January 2009 to be not less than �122m (2008: �75.5m), slightly ahead of market expectations.
The Board is cautious about the outlook for 2009 and is aware that general economic conditions are likely to deteriorate further.
Revenue growth for the Group will be challenging and there will continue to be inflationary pressures on costs."
Trading update
The Group has delivered a strong Christmas sales performance in a very difficult trading environment.
The wider economic environment has led to challenging trading conditions, albeit that the UK also experienced significant changes to the
competitive landscape with some competitors having limited availability of stock or ceasing to trade. These events gave some upside to the
performance in the UK business during the latter part of this key trading period.
The existence of five successful hardware formats throughout the year has, as anticipated, led to an increase in the proportion of
higher margin software in the sales mix. This trend continued through the Christmas trading period and combined with the success of other
margin enhancing initiatives we expect that Group gross margin for the 53 weeks to 31 January 2009 will be around 140 basis points ahead of
last year at 26.2% and slightly ahead of our previous guidance.
The Gamestation integration is progressing well and we now expect to deliver synergies of �10m, ahead of our previous guidance of �9m,
in the 53 weeks to 31 January 2009.
Overall, the Group has traded well in the year to date and the Board now expects the Group profit before non recurring costs and tax for
the 53 weeks to 31 January 2009 to be not less than �122m (2008: �75.5m), slightly ahead of market expectations.
The Group remained focused on being the preferred destination for purchasing pc and video games, offering our customers great value
through our Preowned and Trade-in offer, innovative promotions, enthusiastic and knowledgeable employees and our Reward Card programme. Our
continuing strategy of evolving our specialist proposition and the hard work of our management team and all our dedicated employees has led
to a good Christmas performance.
The top selling multi-format games for the period included Call of Duty: World at War (publisher - Activision Blizzard), FIFA 09 (EA
Sports), Fallout 3 (Bethesda Softworks), Need for Speed Undercover (EA Games), and Guitar Hero World Tour (Red Octane). GAME experienced
exceptional consumer demand for a number of single format games, including Mario Kart and Wii Fit on Nintendo Wii, Little Big Planet on Sony
PS3, Gears of War 2 and Fable 2 on Microsoft Xbox360 and Brain Training and Professor Layton on Nintendo DS.
GAME has benefited from its expansion strategy and now trades from over 1,340 stores with nearly half of the portfolio within
international operations (note 2). Our eCommerce offer has continued to evolve and in the 50 weeks to 10 January 2009 our eCommerce sales
increased by 75.1% to �99.2m.
Board Changes
We have announced today that Terry Scicluna will join the Board as Chief Operating Officer - UK and Ireland. Terry joined GAME on 15
October 2008 and has 30 years experience in retail including the management of multiple brands. His appointment adds further strength to the
management team headed by Lisa Morgan, Chief Executive and David Thomas, Deputy Chief Executive and Group Finance Director.
Outlook for 2009/2010 financial year
The installed base of 3rd generation consoles has reached unprecedented levels with around 22 million units (note 1) already sold in the
UK market. We anticipate that the existence of these successful hardware formats will continue to lead to increased demand for software
during 2009.
However, given the uncertain macro economic environment both in the UK and internationally, the Board is cautious about the outlook for
2009 and is aware that general economic conditions are likely to deteriorate further. Revenue growth for the Group will be challenging and
there will continue to be inflationary pressures on costs.
GAME will continue to exercise strong cost disciplines and effective management of working capital together with a more cautious
expansion strategy. The Group has a strong balance sheet with expected net cash of �30m to �40m as at 31 January 2009. It is anticipated
that average net debt this year will be around �70m and in the region of �50m in the year to January 2010.
In addition, in line with our previous guidance, we expect to deliver integration synergies from our UK dual brand business, in the year
to 31 January 2010, of up to �14m. (2009: �10m).
The GAME Group plc will report its Preliminary Results for the 12 months to 31 January 2009 on Tuesday 21 April 2009.
Notes:
1. Installed base UK & Ireland - 3rd Generation Hardware
3 January 2009 5 January 2008
Millions of units Millions of units
Sony Playstation 3 1.9 0.9
Microsoft Xbox 360 3.2 1.8
Nintendo Wii 4.9 2.0
Total console 10.0 4.7
Playstation Portable (PSP) 3.2 3.4
Nintendo DS and DS Lite 8.8 5.4
Total handheld 12.0 8.8
Total installed base 22.0 13.5
Source - Charttrack factored installed base
2. Store portfolio
10 January 2009 29 November 2008 31 January 2008
Number Number Number
Company owned and concessions
UK and Ireland:
- GAME - Stores 397 397 381
- GAME - Concessions 51 51 33
- Gamestation 253 252 235
Total UK and Ireland 701 700 649
France 192 190 170
Iberia 258 252 208
Scandinavia 66 66 62
Czech Republic 21 21
Total Continental Europe 537 529 440
Australia 101 98 51
Total International 638 627 491
Total owned and concessions 1,339 1,327 1,140
Franchises
France 1 1 7
Iberia 5 6 10
Australia 1 1 4
Czech Republic 2 1
Total franchises 9 9 21
Total operational outlets 1,348 1,336 1,161
Enquiries
GAME Group plc Lisa Morgan, Chief Executive +44 1256 784566
David Thomas, Deputy CEO and Group Finance
Director
Ben White and Simon Soffe, Investor
Relations
Brunswick Jonathan Glass +44 207 404 5959
Nina Coad
Ash Speigelberg
There will be an analyst conference call at 9am UK time today. The dial-in-details are as follows:
International dial in: +44 (0) 1452 541 076
Conference ID: 80245118
Replay facility available for 7 days:
International dial in: +44 (0) 1452 55 00 00
Encore Replay Access Number: 80245118�
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTBIGDBXSBGGCD
Game (LSE:GMG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Game (LSE:GMG)
Historical Stock Chart
From Jul 2023 to Jul 2024
