TIDMGMG
RNS Number : 9010Q
Game Group PLC
22 April 2009
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22 April 2009
THE GAME GROUP PLC
Preliminary Results
Highlights
_______________________________________________________________________________
_______________
THE GAME GROUP PLC, Europe's leading retailer of pc and video games products,
today announces Preliminary Results for the 53 weeks ended 31 January 2009.
Preliminary Results for the 53 weeks ended 31 January 2009
Highlights
+----------------------------------------+----------------+----------------+--------+
| All figures in GBP'm (unless stated) | 53 weeks ended | 52 weeks ended | Var% |
| | | 31 January | |
| | 31January 2009 | 2008 | |
| | | | |
+----------------------------------------+----------------+----------------+--------+
| Group turnover | 1,971.9 | 1,491.9 | 32.2% |
+----------------------------------------+----------------+----------------+--------+
| Gross profit margin (%) | 26.2% | 24.8% | |
+----------------------------------------+----------------+----------------+--------+
| Operating profit before non-recurring | 133.1 | 82.3 | 61.7% |
| costs | | | |
+----------------------------------------+----------------+----------------+--------+
| Non-recurring costs * | 6.6 | 7.1 | |
+----------------------------------------+----------------+----------------+--------+
| Operating profit | 126.5 | 75.2 | 68.3% |
+----------------------------------------+----------------+----------------+--------+
| Profit before non-recurring costs and | 126.2 | 75.5 | 67.2% |
| tax | | | |
+----------------------------------------+----------------+----------------+--------+
| Profit before tax | 119.6 | 68.4 | 74.9% |
+----------------------------------------+----------------+----------------+--------+
| Basic earnings per share before | 26.61p | 15.88p | 67.6% |
| non-recurring costs (pence) | | | |
+----------------------------------------+----------------+----------------+--------+
| Basic earnings per share (pence) | 24.70p | 13.79p | 79.1% |
+----------------------------------------+----------------+----------------+--------+
| Annual dividend per share (pence) | 5.50p | 4.40p | 25.0% |
+----------------------------------------+----------------+----------------+--------+
| Trading store numbers (including | 1,342 | 1,161 | 15.6% |
| franchises) | | | |
+----------------------------------------+----------------+----------------+--------+
| Trading square footage (sq. | 1,392.8 | 1,170.2 | 19.0% |
| ft. thousands) | | | |
+----------------------------------------+----------------+----------------+--------+
* The non-recurring costs relate to the acquisition of Gamestation.
Operational and financial highlights
* Record sales and profits.
* Group sales growth of 32.2% and like for like ('lfl') sales up by 8.8%.
* The Group's gross margin improved by 140 basis points.
* Strong UK and International profit performance with UK operating profits up by
63% to GBP112.7m (before non-recurring items) and International up by 54% to
GBP20.4m.
* eCommerce sales and operating profits rose by 85% and 109% respectively.
* Gamestation integration progressing in line with expectations with synergies of
GBP10m delivered for FY08/09 and a further GBP6m expected for FY09/10.
* Final dividend increased by 25% to 3.71p.
Current trading
* Current trading is ahead of expectation coupled with gross margin improving by
around 150 basis points compared to last year.
* For the 11 weeks to 18 April 2009, Total Group sales are up by 1.0% with Group
lfl sales down, against very strong comparatives, by 6.3%.
* In the UK and Ireland, total sales and lfl sales were down by 2.4% and 6.6%
respectively. In our International business, total sales were up by 9.9% and lfl
sales on a constant currency basis were down by 5.7%. On a reported currency
basis, Group lfl sales were down by 3.7%.
Peter Lewis, Chairman, said:
"These were exceptional results for the Group with a 67% increase in profit
before taxation and non-recurring costs to GBP126.2m (2008: GBP75.5m) and
continue a consistent growth trend for our business. The Group's basic earnings
per share before non-recurring costs in the last four years have increased by a
compound annual average of over 44%. The principal drivers have been third
generation formats with many products now having a wider demographic appeal, the
further development of our specialist credentials, successful international
expansion and the many benefits arising from our acquisition of Gamestation.
Current trading performance is ahead of our expectations and this is
particularly pleasing when set against the double digit growth achieved last
year. Year to date margin has also improved, up 150 basis points as a result of
higher margin products within the sales mix.
The Board is confident in the outlook for the year to 31 January 2010."
A presentation to investors and analysts will be held today at 9.00am (BST) at
The Lincoln Centre, 16 Lincolns' Inn Fields, London, WC2A 3ED.
A live webcast of the presentation to investors and analysts will be available
on the Company's website at www.gamegroup.plc.uk from 9.00am (BST) today and
will be available to view on demand from approximately 2.00pm (BST).
An interview with Lisa Morgan, Chief Executive will be available from 7:00 am
(BST) on www.gamegroup.plc.uk and on www.cantos.com
Enquiries:
+----------------------+----------------------------------+---------------------+
| The GAME Group plc | Lisa Morgan | +44 (0)1256 784050 |
| | Group Chief Executive | |
| | | |
+----------------------+----------------------------------+---------------------+
| | David Thomas | +44 (0)1256 784085 |
| | Deputy CEO & Group Finance | |
| | Director | |
| | | |
+----------------------+----------------------------------+---------------------+
| | Ben White | +44 (0)1256 784122 |
| | Reporting and Investor Relations | |
| | Director | |
| | | |
+----------------------+----------------------------------+---------------------+
| Brunswick | Jonathan Glass | +44 (0)20 7404 5959 |
| | Nina Coad | |
+----------------------+----------------------------------+---------------------+
www.gamegroup.plc.uk
Chairman's Statement
_______________________________________________________________________________
_______________
These were exceptional results for the Group with a 67% increase in profit
before taxation and non-recurring costs to GBP126.2m (2008: GBP75.5m) and
continue a consistent growth trend for our business. The Group's basic earnings
per share before non-recurring costs in the last four years have increased by a
compound annual average of over 44%. The principal drivers have been third
generation formats with many products now having a wider demographic appeal, the
further development of our specialist credentials, successful international
expansion and the significant benefits arising from our acquisition of
Gamestation.
We recognise the unusually challenging and uncertain economic conditions in
which we are operating today, and whilst we are not immune to wider economic
uncertainties, our record results during the crucial Christmas period provide
reassurance about the appeal and resilience of the products we sell and
therefore our business model. We continue to be encouraged by the ongoing demand
for third generation products which is in part being driven by their broadening
appeal. Video games and, in particular, our trade-in and preowned offers, which
provide consumers with a way to buy games for less, offer an even more
affordable alternative to many other family leisure activities. We remain
committed to delivering our customers the widest choice and value for money.
Results
Group turnover for the 53 weeks ended 31 January 2009 increased by 32.2% to
GBP1,971.9m (52 weeks ended 31 January 2008: GBP1,491.9m) with lfl sales up by
8.8%. In the UK and Ireland, total sales increased by 25.7% and lfl sales were
up by 10.7%. In our International operations, total sales increased by 50.6% and
lfl sales rose by 4.6%.
The Group's gross margin improved by 140 basis points. The overall improvement
was achieved through an increase in higher margin new and preowned software
within the overall sales mix, which rose from 59.7% to 62.2% and purchasing
synergies from Gamestation. In addition, later in the period, we delivered
efficiency and gross margin improvements from our UK preowned business.
Group operating profit before non-recurring costs was GBP133.1m (2008:
GBP82.3m). Profit before tax and non-recurring costs was GBP126.2m (2008:
GBP75.5m) and basic earnings per share before non-recurring costs were 26.61p
(2008: 15.88p).
Your Board is proposing a final dividend of 3.71p per share, an increase of 25%.
This will result in a full year dividend of 5.50p, an increase of 25%.
Our net cash position as at 31 January 2009 increased to GBP81.4m (2008:
GBP42.1m). The Group continues to be very cash generative and has a strong
balance sheet.
Business development
Our market and position
We developed the key differentiators of our business to ensure we were well
positioned ahead of the launch of the latest generation of formats:
- Our well established supplier relationships allow us to source appropriate
quantities of "must have" new products and present
innovative offers to
our customers;
- GAME and Gamestation's specialist retail proposition allows us to carry the
widest range of product on the high street;
- Our well trained and knowledgeable employees are instrumental in guiding
consumers to the products, deals and choices that
best suit their needs;
- Our GAME Reward Card scheme has over 12 million members; and
- Our trade-in programme and preowned product offer allow consumers to maximise
their purchases from their available cash
resources.
In addition, we have opened stores in the right territories and the right
locations. We now have 1,342 stores across two brands and ten countries,
reflecting our strategy of building our business in the most appropriate
markets.
We continue to invest in our multi-channel proposition to ensure we can deliver
growth in the future and maintain our competitive position. Our strategy
reflects customers' increasing adoption of multi-channel shopping, and we have
invested to ensure that the qualities of the GAME and Gamestation offer are
replicated for our eCommerce customers.
We continue to target the Group's resources towards those markets with the
strongest return on investment characteristics and where we believe our
expertise can deliver real improvements in performance.
The third generation consoles are all in good supply. Demand has continued to be
strong and the installed console base has now reached record levels at over 22.5
million in the key UK market. This level of console ownership has been achieved
in just over three years, while second generation consoles took eight years to
reach 17 million (source: GfK Chart Track).
An expanded base of hardware in the market leads to more software being sold,
both to the more traditional gamer and to new customers entering the market for
the first time. The consumer appeal of pc and video games is broadening with
more women and families, younger children and more mature customers buying games
in our stores.
The UK and Ireland
The market
In the final quarter of the period we saw unprecedented changes to the retail
landscape as some retailers of pc and video games ceased to trade. Consequently,
we are actively focused on securing further profitable market share and the
early signs are encouraging.
We opened a net 47 stores in the UK and Ireland across our GAME and Gamestation
brands.
Gamestation
In the UK, we are continuing to develop the distinctive dual brand position of
GAME and Gamestation.
We acquired Gamestation in May 2007 and received Competition Commission
clearance in January 2008. We have been very pleased with the performance of the
Gamestation business in the first full year under our control and it has again
exceeded our expectations.
We have continued to grow the Gamestation store portfolio with a focus on
locations that are complementary to the GAME brand.
We achieved ongoing synergies of GBP10m in the 53 weeks ended 31 January 2009 of
which around GBP8m was a reduction in cost of sales with GBP2m being a reduction
in operating expenses. We are targeting a further GBP6m of synergy benefits for
this year, giving an annualised rate of GBP16m going forward.
In order to achieve these synergies there will be a total non-recurring charge
of approximately GBP16m related to integrating the acquisition, of which GBP9.5m
has been incurred to date with GBP6.6m in the 53 weeks ended 31 January 2009 and
GBP2.9m in the prior year. In addition, the total capital expenditure required
to integrate the acquisition will be GBP7m of which GBP2m has been incurred in
the 53 weeks to 31 January 2009.
Concessions
On 29 September 2008, GAME entered into an agreement with Borders to open 20
concessions within a number of their stores in the UK. This store-in-store
concept, which is branded GAME, has broadened our consumer reach and will
complement the GAME standalone stores and our other 32 concessions with
retailers such as Debenhams, Selfridges, Hamleys and Fenwick. We will continue
to review opportunities to expand the concession footprint.
International
The International business continues to perform well in all territories despite
trading conditions deteriorating throughout the period, contributing 29.6% to
the Group revenue and 16.1% to operating profit.
We opened a net 112 international stores this year with 16 of these in France,
45 in Iberia, 47 in Australia and four in Scandinavia.
As part of our international growth strategy we are continuing to buy-in or
close existing franchises. During the course of the year, we completed the
purchase of six of the remaining seven French franchise stores for a cost of
EUR3.2m (GBP2.9m). We also bought in four of our Spanish franchises at a cost of
EUR0.9m (GBP0.8m) and closed one. There are now only seven franchises within the
Group.
eCommerce
Our multi-channel proposition continues to evolve very successfully and our
sales and operating profits from eCommerce have grown 85% and 109% respectively
to GBP106.8m (2008: GBP57.8m) and to GBP6.1m (2008: GBP2.9m). Each of our
International businesses is actively participating in this area. In the period,
GAME invested GBP8m in distribution infrastructure and further consumer facing
development.
Acquisitions
On 21 August 2008, GAME acquired the Czech video games retailer JRC Czech a.s.
("JRC") for Czk112.0m (GBP3.6m) in cash of which Czk50.8m (GBP1.6m) was payable
immediately and the balance is payable over the course of the next two years.
JRC, based in Prague, is the leading specialist retailer of pc and video games
in the Czech Republic. JRC provides the opportunity to develop GAME's
international business in Central and Eastern Europe. The company now operates
22 specialist pc and video games stores, located in the principal cities in the
Czech market including six stores in Prague, and a transactional eCommerce site
www.jrc.cz. It is the leading retailer in the market with market share in excess
of 15%. JRC has a committed management team with more than 15 years of
experience.
The Czech business has contributed GBP0.5m to Group operating profits in the
year.
Treasury and Capital expenditure
Our net cash, as at 31 January 2009, was GBP81.4m compared with GBP42.1m in the
prior year. The increase was driven by strong operating cash flows.
In the 2009/10 financial year average net debt is anticipated to be around
GBP64m (2008: GBP67m). The Board is committed to an efficient capital structure
and continues to review the dividend policy and a share buyback strategy along
with continued organic or acquisitive growth of the store portfolio.
We anticipate that our total capital expenditure for the current year will be
around GBP35m (FY08/09: GBP53m). Store openings, refurbishment and information
technology requirements are expected to cost approximately GBP25m. In addition
we expect to spend GBP5m on eCommerce development and GBP5m on the Gamestation
integration.
The Board
On 3 July 2008, Dennis Woodside (40) was appointed as a non-executive director.
Mr Woodside is a senior executive of Google and is presently the head of their
North and South American operations.
On 13 January 2009, Terry Scicluna (51) was appointed to the Board as Chief
Operating Officer - UK and Ireland. Terry joined GAME on 15 October 2008 and has
30 years of experience in retail including the management of multiple brands.
His appointment adds further strength to the management team.
Employees
Our employees, at all levels, have worked tirelessly to engage with our
customers, provide outstanding customer service and have contributed to a great
financial performance through their significant efforts and enthusiasm.
It is an enormous tribute to all of our employees that GAME was awarded the
prestigious accolade of Speciality Retailer of the Year 2008 at the Retail Week
Awards in March 2009. On behalf of myself and the Board, I would like to thank
all of our employees for contributing to our success.
Corporate Responsibility
Corporate Responsibility ("CR") is right at the heart of GAME. As a responsible
retailer, we recognise that the way we operate as a business has a direct impact
on our reputation and our brand. We are continuing to develop our CR strategy
and our stakeholder relationships.
Current Trading and Future Prospects
We have made a very encouraging start to the financial year particularly given
the strong comparative period in 2008 (when Group lfl sales were 18%) was driven
by the launch of a number of popular software titles such as Mario and Sonic at
the Olympic Games and Mario Kart Wii.
In the first 11 weeks to 18 April 2009 the Group total sales were up by 1.0% and
lfl sales were down by 6.3%. The lfl sales reduction is less than we had
anticipated and the demand remains strong.
In the UK and Ireland, total sales and lfl sales were down by 2.4% and 6.6%
respectively. In our international business, total sales were up by 9.9% and lfl
sales on a constant currency basis were down by 5.7%. On a reported currency
basis, Group lfl sales were down by 3.7%.
Current trading performance is ahead of our expectations and this is
particularly pleasing when set against the double digit growth achieved last
year. Year to date margin has also improved, up 150 basis points as a result of
higher margin products within the sales mix.
As a result of these factors, we anticipate gross margin for the full year will
improve by 150 to 175 basis points compared to last year.
The unprecedented range of products has broadened the demographic appeal of
gaming, attracting new customers from all generations. With a large and growing
installed base of hardware in the market and a solid line up of new software
launches, the Board is confident in the outlook for the year to 31 January 2010.
Peter Lewis
Chairman
22 April 2009
Chief Executive's Review
_______________________________________________________________________________
_______________
I am pleased to report yet another strong set of results for the GAME Group
despite the challenges presented by wider economic issues.
Our success is based on placing our customers at the heart of our business. Our
specialist proposition is designed to give our customers a great shopping
experience and encourage their loyalty so they will come back to us time and
time again. We focus on offering the widest range and choice of products
available, combined with quality teams on hand to give helpful friendly advice,
extensive product knowledge and exceptional service. We are first-to-market with
leading promotions and multi-buy campaigns.
Our trade-in programme enables our customers to access new games for less and we
offer preowned products as a more affordable alternative to buying new and,
through our Reward Card scheme, we consistently reward their purchases and thank
them for shopping with us.
We believe we are positioned strongly to best serve customers as they seek ever
better value and to differentiate our stores and websites in a constantly
changing market place.
The Group has benefited from the continuing growth in the appeal of pc and video
games. With a worldwide market value of nearly $50bn (source: IDG), video games
are now a significant part of customers' entertainment spend. The variety of
product available offers something for everyone and, as a result, we have seen a
much broader range of customers enter our stores and visit us online.
The suppliers of hardware and software publishers have recognised the diversity
of demand. Over the course of our last financial year we saw the release of
titles such as Grand Theft Auto IV, Call of Duty: World at War and Gears of War
2, all focused at the more traditional gamer. At the other end of the spectrum,
we also saw innovative and interactive family products such as Wii Fit and
Guitar Hero perform extremely well in the market place.
We have experienced central teams who work closely with our suppliers to ensure
we get the right products to the right stores, in the right quantities, at the
right time, they also support our store teams so that they can focus on looking
after our customers.
Where our stores are located
+-------------------------------+------------+-------------------+-------------------+
| As at 31 January | | 2009 | 2008 |
+-------------------------------+------------+-------------------+-------------------+
| | | Number | Number |
+-------------------------------+------------+-------------------+-------------------+
| Company owned and concessions | | | |
+-------------------------------+------------+-------------------+-------------------+
| UK and Ireland | | 443 | 414 |
| - GAME | | 253 | 235 |
| - Gamestation | | | |
+-------------------------------+------------+-------------------+-------------------+
| Total UK and Ireland | | 696 | 649 |
+-------------------------------+------------+-------------------+-------------------+
| France | | 192 | 170 |
+-------------------------------+------------+-------------------+-------------------+
| Iberia | | 258 | 208 |
+-------------------------------+------------+-------------------+-------------------+
| Scandinavia | | 66 | 62 |
+-------------------------------+------------+-------------------+-------------------+
| Czech Republic | | 22 | - |
+-------------------------------+------------+-------------------+-------------------+
| Total Continental Europe | | 538 | 440 |
+-------------------------------+------------+-------------------+-------------------+
| Australia | | 101 | 51 |
+-------------------------------+------------+-------------------+-------------------+
| Total International | | 639 | 491 |
+-------------------------------+------------+-------------------+-------------------+
| Total owned and concessions | | 1,335 | 1,140 |
+-------------------------------+------------+-------------------+-------------------+
| Franchises | | | |
+-------------------------------+------------+-------------------+-------------------+
| France | | 1 | 7 |
+-------------------------------+------------+-------------------+-------------------+
| Iberia | | 5 | 10 |
+-------------------------------+------------+-------------------+-------------------+
| Australia | | 1 | 4 |
+-------------------------------+------------+-------------------+-------------------+
| Total franchises | | 7 | 21 |
+-------------------------------+------------+-------------------+-------------------+
| Total operational outlets | | 1,342 | 1,161 |
+-------------------------------+------------+-------------------+-------------------+
The continued focus on our specialist proposition has resulted in the best
revenue and profit performance we have ever delivered in each of our UK,
International and online operations.
UK
In the UK we trade from over 690 stores through our GAME and Gamestation brands.
The two brands appeal to different sets of customers, with Gamestation targeting
the more traditional core gamer and GAME the family. They complement each other
extremely well and as a result they both traded very successfully last year,
delivering 70% of Group revenue and 84% of Group operating profit.
The UK games' retail environment has changed considerably over the course of the
year, with both Woolworths and Zavvi going into administration and withdrawing
from the High Street. We are well placed to benefit from these changes.
We further expanded our concession partnerships to gain access to new markets
and customers. GAME concessions were opened in 20 Borders book stores across the
UK - providing a relatively low-cost route to expand into new locations and
reach even more customers.
It was our first full year of trading the Gamestation brand, following our
acquisition of the business in May 2007. Gamestation has exceeded our
expectations and we have continued to develop the brand and open new stores in
appropriate locations. We expect to see further profit improvements as we
complete the integration in 2009.
International
We trade from nearly 650 stores in eight international territories - France,
Spain, Portugal, Sweden, Denmark, Norway, Australia and the Czech Republic. Our
acquisition of JRC, a 19 store pc and video games business based in Prague
marked our first entry into Central Europe.
We had a busy store opening programme, with a net 134 stores opened outside the
UK which included the buy-in of ten franchises. The size of our store
portfolios, coupled with the GAME specialist offer and the capabilities of our
local management teams, have enabled us to trade the GAME brand successfully in
every country in which we operate. Our international businesses continue to
perform well and contributed GBP583.3m to revenue and GBP20.4m to our overall
operating profit.
Online
We are extremely focused on further developing our multi-channel offer. We
operate transactional eCommerce websites in all the countries in which we trade.
Over the course of the last two years we have invested nearly GBP12m into our
websites and online back office infrastructure. This has given us a credible
eCommerce offering that generated GBP106.8m of revenue this year and positions
us well to continue our growth trend in this area and benefit from future
technological advances.
Our specialist proposition
Regardless of where we trade, our success is founded on delivering our unique
specialist proposition which puts the customer at the centre of our activities.
Our specialist proposition is founded on our desire to provide an experience
that consistently exceeds our customer's expectations, builds relationships with
them, and better understands their needs.
This is underpinned by an impressive, purpose-built, infrastructure and support
network.
Our core attributes include:
* Employees - We recruit and train employees, with a passion for games and an
aptitude for retail, who are dedicated to giving our customers the highest
levels of services and advice. With such a broad range of products, requiring
varying levels of technical know-how, we pride ourselves on matching each
customer to the most relevant purchase.
* Product and range - The market is now in its third generation of hardware,
comprising three consoles (Sony PS3, Microsoft Xbox360 and the Nintendo Wii) and
two handhelds (Sony PSP and Nintendo DS). As a leading specialist we receive
significant quantities of hardware products. As well as offering a full
compliment of console bundles, we offer a large range of software and
peripherals, including our own brand accessories. We use our expertise and
customer insight to generate unique product offers and deals. We offer customers
what they want at prices they can afford.
* Trade-in and Preowned - The ability to trade-in and buy preowned games at GAME
and Gamestation provides a material benefit for customers, particularly in
today's tougher economic climate. Trading-in games is a unique way for customers
to save money, using their old games as currency against new purchases. Preowned
games enable us to offer a wider range and better value to today's more
price-conscious consumer, allowing them to buy products at prices lower than our
competitors.
* Customer Loyalty - Over 25,000 new customers are joining our reward card scheme
every week. Both our GAME and Gamestation brands have built up significant
levels of customer loyalty. The GAME Reward Card helps us to communicate with,
and reward, up to 12 million customers and we intend to launch a similar
programme for Gamestation. Through the Card our customers get points on every
purchase, which can be used as discounts against future purchases. The
transactional data allows us to learn more about our customers and their
shopping trends, enabling us to continually refine and target our offers.
Our specialist proposition is further underpinned by:
* Property - With over 1,340 stores in the Group, we have strong relationships
with landlords and good access to new stores which is a key component of good
property strategy management.In each of the countries in which we operate, we
identify the very best store locations for our customers that we believe will
give us the best returns on our investment. We constantly review store
performance and manage our estate to maximise our customer reach and our
profitability.
* Ecommerce - We aim to have an online offering that matches the quality and
reputation of our stores. In whichever way the consumer wants to shop with us,
our product offer, availability and standards of service are consistently high.
* Business relationships - To provide customers with our range of products and
offers, it is vital that we maintain long term and successful relationships with
all the key hardware and software suppliers. We are committed to working in
partnership to constantly improve our specialist proposition.
* Distribution - Our distribution centres are dedicated to moving products quickly
and efficiently to final destinations, whether that is large volumes to our
stores or small individual packages direct to customers' homes via online
orders. Our state of the art systems and merchandising function ensures that we
get the correct products in time to every destination, which is key to our
customers' needs.
We aim to continually improve our offering and stay ahead of our competition by
spotting trends and opportunities and by evolving our offer accordingly. At the
same time, we constantly evaluate and invest in those aspects of our business
that give us the greatest returns for the future.
Our customer focus is delivered daily by our committed employees. We pride
ourselves on providing a great place to work: we recruit strong retailers, give
them excellent training in customer service and product knowledge and they get
the opportunity to work in a fun environment, in a constantly evolving industry.
We encourage our employees to seek opportunities within the business with the
result that many of our talented people within both stores and head office have
been promoted through the ranks.
Summary
The strength of our performance in the 53 weeks to 31 January 2009 was entirely
attributable to our employees and our credentials as a specialist retailer - we
will continue to nurture and develop these. We will also look to grow our store
portfolio organically with 70 to 80 new stores planned for this year, continue
to realise the benefits of the Gamestation acquisition and further enhance our
business online.
We recognise that the outlook for the wider global economy remains uncertain.
However, we have seen the pc and video games market expand to record levels. It
is now a key part of mass market entertainment. Console ownership continues to
grow and innovative products continue to attract new customers and we are
confident about our prospects going forward.
Lisa Morgan
Chief Executive
Financial Review
_______________________________________________________________________________
_________
Profit and Loss Account
Revenue
Total sales increased by 32.2% from GBP1,492m to GBP1,972m and lfl sales
increased by 8.8%.
Average sales per annum per sq. ft. increased by GBP141 to GBP1,416.
Gross Margin
Overall gross margin was 26.2% compared to a prior year margin of 24.8%. This
increase in gross margin was in line with our expectations. It was caused by the
increased participation of new software and preowned product in our sales mix
and the buying synergies we have been able to deliver through the acquisition of
GAME and Gamestation.
Operating Expenses
Total operating costs have increased by 30.8% from GBP237.3m to GBP310.3m,
excluding Gamestation and non-recurring costs, and as a percentage of sales were
15.7% compared to 15.9% last year. On a cash basis our operating expenditure has
increased year on year but this is in line with the increase in volumes traded
across our business. The decrease in operating costs as a percentage of sales is
a testament to our ability to control our expenditure across the operating
chain.
Profit before tax
We achieved a profit before tax of GBP119.6m compared to a profit before tax of
GBP68.4m for last year.
Taxation
The effective rate of Corporation Tax was 28.6% (2008: 31.0%) and we have
continued to provide deferred taxation in line with IAS 12.
Earnings per share
Basic earnings per share were 24.70p compared to 13.79p last year, an increase
of 79%. Diluted earnings per share were 24.62p compared to 13.65p last year, an
increase of 80%.
Dividend
The Board is recommending a final dividend of 3.71p per share, which will give a
total dividend for the period of 5.50p compared to 4.40p last year an increase
of 25%. The dividend will be paid on 17th July 2009, to shareholders on the
register at the 29th May 2009.
Balance Sheet
Capital Expenditure
Capital expenditure in the period, excluding acquisitions, amounted to GBP53m.
Approximately half of this expenditure was undertaken to open new stores
internationally and in the UK. Additionally we invested in the IT
infrastructure, distribution facilities and web operations across the Group. In
summary:
+----+----------------------------+----------------+--------------+
| | Capital Expenditure | 2009 | 2008 |
+----+----------------------------+----------------+--------------+
| | | GBPm | GBPm |
+----+----------------------------+----------------+--------------+
| | | | |
+----+----------------------------+----------------+--------------+
| | Stores | 29 | 25 |
+----+----------------------------+----------------+--------------+
| | Refits | 7 | 5 |
+----+----------------------------+----------------+--------------+
| | Web | 8 | 4 |
+----+----------------------------+----------------+--------------+
| | Infrastructure | 9 | 6 |
+----+----------------------------+----------------+--------------+
| | | | |
+----+----------------------------+----------------+--------------+
| | | _______ | _______ |
+----+----------------------------+----------------+--------------+
| | Total | 53 | 40 |
+----+----------------------------+----------------+--------------+
| | | _______ | _______ |
+----+----------------------------+----------------+--------------+
Stock
Stock at the end of the period represented GBP136k per owned store compared to
GBP127k for the same period last year. The increase in the average stock holding
per store reflects the fact that we were holding higher levels of hardware
product to meet ongoing consumer demand.
Cash flow
Net cash generated by operations was GBP118m compared to GBP172m last year. This
reflects a very strong year on year trading performance offset by the movements
in working capital. In particular, our trade creditor payments schedule has
normalised with payments, to the majority of our suppliers for December
deliveries, made just after the year end in both years.
Reporting
In the coming year we will adopt IFRIC 13 on Customer Loyalty Programmes. This
requires the business to recognise an element of revenue on accounting for
Loyalty Card points, where previously we have only recognised the cost of those
points. This is likely to result in a charge to the profit and loss for 2009/10
of GBP1m; and a prior year adjustment for the 2008/09 profit and loss of GBP3m.
When entering in to leases in France, businesses are required to pay key money
(called "Droit au bail" in France). The key money is not depreciated but the
carrying value is assessed annually on the basis of a formal property market
valuation. We have assessed the carrying value, based on a representative sample
of properties, as at 31 January 2009 and concluded that there is no material
diminution in value. The carrying value of the key money in our books is
approximately GBP31m. We will continue to review the position in 2009.
Consolidated Income Statement for the 53 weeks ended 31 January 2009
+----------------------------+----------------------------------+----------------------------------+---------------+
| | Note | 2009 | 2008 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | GBP'000 | GBP'000 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Revenue | 1 | 1,971,905 | 1,491,914 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Cost of sales | | 1,455,151 | 1,122,337 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Gross profit | | 516,754 | 369,577 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Other operating expenses | 2 | 390,214 | 294,385 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Operating profit before | | 133,128 | 82,340 |
| non-recurring costs | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Non-recurring costs | 3 | (6,588) | (7,148) |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Operating profit | 4 | 126,540 | 75,192 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Finance income | 5 | 1,805 | 1,511 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Finance costs | 6 | (8,732) | (8,341) |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Profit before taxation | | 119,613 | 68,362 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Taxation | 8 | 34,173 | 21,183 |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Profit for the year attributable to equity holders of the | 85,440 | 47,179 |
| parent | | |
+---------------------------------------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| Earnings per share | - basic | 24.70p | 13.79p |
| | 10 | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | - diluted | 24.62p | 13.65p |
| | 10 | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | _______ | _______ |
+----------------------------+----------------------------------+----------------------------------+---------------+
| | | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
| All amounts relate to continuing activities | | |
+----------------------------+----------------------------------+----------------------------------+---------------+
Consolidated Balance Sheet at 31 January 2009
_______________________________________________________________________________
_________
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | Note | 2009 | 2008 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | GBP'000 | GBP'000 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Non-current assets | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Property, plant & equipment | 11 | 165,609 | 130,662 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Intangible assets | 12 | 182,267 | 172,871 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Deferred tax asset | 18 | 2,738 | - | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | 350,614 | 303,533 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Current assets | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Inventories | 13 | 181,965 | 145,041 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Trade and other receivables | 14 | 55,465 | 53,845 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Cash and cash equivalents | | 139,614 | 137,899 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | 377,044 | 336,785 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Total assets | | 727,658 | 640,318 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Current liabilities | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Trade and other payables | 15 | 343,809 | 315,498 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Current portion of long term | 16 | 26,325 | 38,038 | |
| borrowings | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Leasehold property incentives | 19 | 904 | 846 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Current tax liabilities | | 26,037 | 15,862 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | 397,075 | 370,244 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Non-current liabilities | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Long term borrowings | 16 | 31,847 | 57,809 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Leasehold property incentives | 19 | 8,328 | 6,414 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Deferred tax liabilities | 18 | - | 1,929 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | 40,175 | 66,152 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Total liabilities | | 437,250 | 436,396 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Net assets | | 290,408 | 203,922 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Equity attributable to equity holders of the parent | | | |
+--------------------------------------------------------------------+-----------------------------+---------------+-----------------------------+
| Share capital | 20 | 17,316 | 17,167 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Share premium account | 21 | 46,462 | 44,848 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Capital redemption reserve | 22 | 2,248 | 2,223 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Shares held in trust | 22 | (6,451) | (4,403) | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Merger reserve | 22 | 76,907 | 76,907 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Foreign exchange reserve | 22 | 23,454 | 5,904 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| Retained earnings | 22 | 130,472 | 61,276 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | | | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | 290,408 | 203,922 | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
| | | _______ | _______ | |
+----------------------------------------+---------------------------+-----------------------------+---------------+-----------------------------+
Consolidated Statement of Recognised Income and Expense for the 53 weeks ended
31 January 2009
_______________________________________________________________________________
_________
+----------------------------+---------------------------------------+--------
=-------------------+----------------+
| |
Note | 2009 | 2008
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| |
| GBP'000 | GBP'000
|
+----------------------------+---------------------------------------+-----
-----------------------+----------------+
| Exchange differences on
translation of foreign currency | |
|
+--------------------------------------------------------------------+-----
-----------------------+----------------+
| net investments in subsidiary
undertakings | 17,550 |
9,663
|
+--------------------------------------------------------------------+-----
=----------------------+----------------+
| |
| |
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| Deferred income tax on share based
payments | (442) | 22
|
+--------------------------------------------------------------------+-----
-----------------------+----------------+
| Current tax on share based
payments | 1,789 |
-
|
+--------------------------------------------------------------------+-----
=----------------------+----------------+
| |
| _______ | _______
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| |
| |
|
+----------------------------+---------------------------------------+-----
-----------------------+----------------+
| Total income and expense
recognised directly in equity | 18,897 |
9,685
|
+--------------------------------------------------------------------+-----
=----------------------+----------------+
| |
| |
|
+----------------------------+---------------------------------------+-----
-----------------------+----------------+
| Profit on ordinary activities
after taxation | 85,440 |
47,179
|
+--------------------------------------------------------------------+-----
=----------------------+----------------+
| |
| _______ | _______
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| |
| |
|
+----------------------------+---------------------------------------+-----
-----------------------+----------------+
| Total recognised income and
expense for the year | |
|
+--------------------------------------------------------------------+-----
=----------------------+----------------+
| attributable to equity |
22 | 104,337 | 56,864
|
| holders | |
|
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| |
| _______ | _______
|
+----------------------------+---------------------------------------+-----
=----------------------+----------------+
| |
| |
|
+----------------------------+---------------------------------------+-----
-----------------------+----------------+
Consolidated Cash Flow Statement for the 53 weeks ended 31 January 2009
_______________________________________________________________________________
_________
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | Note | 2009 | 2008 |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | GBP'000 | GBP'000 |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Cash flow from operating activities | | |
+----------------------------------------------------------+--------------------------+----------------------------+
| Operating profit | | 126,540 | 75,192 |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Equity settled share-based payment expense | 1,968 | 1,204 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Depreciation and amortisation | 28,901 | 20,587 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Loss on disposal of non current assets | 146 | 286 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Market value movement on financial instrument | 211 | (139) |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | 157,766 | 97,130 |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Decrease /(Increase) in trade and other receivables | 212 | (20,772) |
+----------------------------------------------------------+--------------------------+----------------------------+
| Increase in inventories | | (30,293) | (28,562) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Increase in trade and other payables | 26,326 | 143,645 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Increase in leasehold incentives | 1,573 | 532 |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Cash generated from operations | 155,584 | 191,973 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Finance costs paid | | (8,732) | (8,341) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Corporation tax paid | | (28,844) | (11,580) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Net cash from operating activities | 118,008 | 172,052 |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | |
+----------------------------------------------------------+--------------------------+----------------------------+
| Cash flows from investing activities | | |
+----------------------------------------------------------+--------------------------+----------------------------+
| Acquisitions | 23 | (6,804) | (80,941) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Purchase of property, plant and equipment | (48,727) | (37,218) |
+----------------------------------------------------------+--------------------------+----------------------------+
| Purchase of intangible | | (4,718) | (2,703) |
| assets | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Proceeds from sale of equipment | 1,128 | 205 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Finance income received | | 1,805 | 1,511 |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Net cash used in investing activities | (57,316) | (119,146) |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Cash flows from financing activities | | |
+----------------------------------------------------------+--------------------------+----------------------------+
| Proceeds from issue of share capital | 1,740 | 2,726 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Shares purchased for Trust | | (3,828) | (3,667) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Purchase of own shares | | (1,241) | - |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Net (payment of) / proceeds from Term Loan | (25,000) | 80,000 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Net payment of other long term borrowings | (13,765) | (15,902) |
+----------------------------------------------------------+--------------------------+----------------------------+
| Payment of finance lease liabilities | (393) | (550) |
+----------------------------------------------------------+--------------------------+----------------------------+
| Dividends paid | | (16,490) | (10,541) |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Net cash used in financing activities | (58,977) | 52,066 |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Net increase in net cash and cash equivalents | 1,715 | 104,972 |
+----------------------------------------------------------+--------------------------+----------------------------+
| Cash and cash equivalents at beginning of year | 137,899 | 32,927 |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | _______ | _______ |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| | | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
| Cash and cash equivalents at end of year | 139,614 | 137,899 |
| 24 | | |
+----------------------------------------------------------+--------------------------+----------------------------+
| | _______ | _______ |
+----------------------------------------------------------+--------------------------+----------------------------+
| | | |
+----------------------------+-----------------------------+--------------------------+----------------------------+
Statement of Accounting Policies
_______________________________________________________________________________
_________
The financial information set out above and in the accompanying notes, does not
constitute the Company's statutory accounts for the years ended 31 January
2009 or 2008, but is derived from those Accounts. Statutory accounts for 2008
have been delivered to the Register of Companies and those for 2009 will
be delivered following the Company's Annual General Meeting. The auditors
have reported on those accounts; their reports were unqualified and did not
contain statements under the Companies Act 1985, s 237 (2) or (3).
Basis of Preparation
The accounting reference date of The GAME Group plc and all of its
subsidiary undertakings (the "Group") is 31 January. The comparative year's
results are for the 52 week period ended 26 January 2008. The current year's
results are for the 53 week period ended 31 January 2009.
The consolidated financial statements incorporate the results of the Group
made up to 31 January 2009. The Group has used the acquisition method of
accounting to consolidate the results of subsidiary undertakings. The results of
subsidiary undertakings are included from the date of acquisition.
The group consolidated financial statements have been prepared in
accordance with the Companies Act 1985 as applicable to companies reporting
under IFRS and those IFRS and IFRIC interpretations issued and effective and
endorsed by the European Union as at the time of preparing these financial
statements.
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
_______________________________________________________________________________
_________
1 Revenue, profit and net assets
Revenue, pre-tax profits and net assets all relate to the retail of pc and video
game products and the Group's operations are organised and managed by geographic
location only. Management consider the geographical locations split between the
UK and Ireland and International. The Directors are of the view that there is
only one identifiable business segment; retailing.
Revenue by origin and destination are not materially different.
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | United Kingdom | International | United Kingdom and | International |
| | and Ireland | | Ireland | |
| | 2009 | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | | | | |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Revenue | 1,388,634 | 583,271 | 1,104,657 | 387,257 |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Cost of sales | 1,015,077 | 440,074 | 829,630 | 292,707 |
| | ________ | _______ | ________ | _______ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Gross profit | 373,557 | 143,197 | 275,027 | 94,550 |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | | | | |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Other operating expenses | 260,810 | 122,816 | 205,913 | 81,324 |
| | ________ | _______ | ________ | _______ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | | | | |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Operating profit before | | | | |
| non-recurring costs | 112,747 | 20,381 | 69,114 | 13,226 |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | | | | |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Non-recurring costs | 6,588 | - | 7,148 | - |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | ________ | _______ | _______ | _______ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Operating profit | 106,159 | 20,381 | 61,966 | 13,226 |
| | ________ | ________ | ________ | ________ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Finance income/costs | (6,453) | (474) | (5,891) | (939) |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Taxation | (28,787) | (5,386) | (17,747) | (3,436) |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | ________ | _______ | _______ | _______ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| Profit after tax | 70,919 | 14,521 | 38,328 | 8,851 |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
| | ________ | _______ | ________ | _______ |
+-------------------------------------+-------------------+---------------+--------------------+----------------+
Other segmental information:
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Goodwill and other intangibles | 155,023 | 27,244 | 151,267 | 21,604 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Other assets | 287,237 | 258,154 | 259,839 | 207,608 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Assets | 442,260 | 285,398 | 411,106 | 229,212 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Liabilities | 275,695 | 161,555 | 233,117 | 203,279 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Net assets | 166,565 | 123,843 | 177,989 | 25,933 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Capital expenditure | 24,526 | 28,919 | 15,576 | 24,345 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Depreciation and amortisation | 16,822 | 12,079 | 12,886 | 7,701 |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| Share based payment expense | 1,968 | - | 1,204 | - |
+------------------------------------+-------------------+---------------+--------------------+---------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+-------------------+---------------+--------------------+---------------+
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
_______________________________________________________________________________
_________
1 Revenue, profit and net assets (continued)
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| | 2009 | | 2008 | |
+ +----------------------+-----------------------+-----------------------+-----------------+
| | GBP'000 | | GBP'000 | |
+-----------------------------+-----------------------------+----------------------+-----------------------+-----------------------+
| | Total | % of Total | Total | % of Total |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Revenue | | | | |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Hardware | 555,369 | 28.2% | 466,187 | 31.2% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Software | 873,835 | 44.3% | 633,808 | 42.5% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| | _______ | _______ | _______ | _______ |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| New hardware and software | 1,429,204 | 72.5% | 1,099,995 | 73.7% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Preowned | 353,409 | 17.9% | 257,285 | 17.2% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Other | 189,292 | 9.6% | 134,634 | 9.1% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| | _______ | _______ | _______ | _______ |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| Total | 1,971,905 | 100.0% | 1,491,914 | 100.0% |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
| | _______ | _______ | _______ | _______ |
+-----------------------------+----------------------+-----------------------+-----------------------+-----------------+
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| | 2009 | | 2008 | |
+ +----------------------+-----------------------+-----------------------+----------------+
| | GBP'000 | | GBP'000 | |
+-----------------------------+-----------------------------+----------------------+-----------------------+-----------------------+
| | Total | % of Total | Total | % of Total |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| Gross Margin | | | | |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| New hardware and software | 319,058 | 61.8% | 234,360 | 63.4% |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| Preowned | 138,176 | 26.7% | 94,871 | 25.7% |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| Other | 59,520 | 11.5% | 40,346 | 10.9% |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| | _______ | _______ | _______ | _______ |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| Total | 516,754 | 100.0% | 369,577 | 100.0% |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
| | _______ | _______ | _______ | _______ |
+-----------------------------+----------------------+-----------------------+-----------------------+----------------+
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| | | 2009 | | 2008 |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| | | % | | % |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| | | Total | | Total |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| Gross Margin | | | | |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| New hardware and software | | 22.3% | | 21.3% |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| Preowned | | 39.1% | | 36.9% |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| Other | | 31.4% | | 30.0% |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| | | _______ | | _______ |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| Total Group | | 26.2% | | 24.8% |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
| | | _______ | | _______ |
+----------------------------------------+-----------+--------------------+-----------------------+----------------+
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
_______________________________________________________________________________
_________
1 Revenue, profit and net assets (continued)
+--------------------------------------+--------+--------+--------------+-----
=-+--------------+-----+----------------+
|
| | | | | 53 weeks | | 52
weeks |
| | | |
| | ended | | ended |
|
| | | | | 31 January | |
31 January |
| | | |
| | 2009 | | 2008 |
|
| | | | | | |
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | GBP'000 | |
GBP'000
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Turnover by territory
| | | | | | |
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| United Kingdom and Ireland
| | | | | 1,388,634 | |
1,104,657
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| France
| | | | | 196,397 | |
141,183
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Iberia
| | | | | 265,237 | |
175,808
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Scandinavia
| | | | | 53,429 | |
43,485
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Australia
| | | | | 63,662 | |
26,781
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Czech Republic
| | | | | 4,546 | |
-
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | 1,971,905 | |
1,491,914
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | | |
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Stores by territory
| | | | | Number | |
Number
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| United Kingdom and Ireland
| | | | | 696 | |
649
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| France
| | | | | 192 | |
170
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Iberia
| | | | | 258 | |
208
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Scandinavia
| | | | | 66 | |
62
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Australia
| | | | | 101 | |
51
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Czech Republic
| | | | | 22 | |
-
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | 1,335 | |
1,140
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Franchises
| | | | | | |
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| France
| | | | | 1 | |
7
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Iberia
| | | | | 5 | |
10
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Australia
| | | | | 1 | |
4
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | 7 | |
21
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
-----+--------------+-----+----------------+
| Trading square footage by
territory | | | | | Sq ft | |
Sq ft |
| at year end | | |
| | | |
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| United Kingdom and Ireland
| | | | | 808,322 | |
712,408
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| France
| | | | | 177,729 | |
162,014
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Iberia
| | | | | 218,395 | |
177,427
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Scandinavia
| | | | | 62,367 | |
59,729
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Australia
| | | | | 113,417 | |
58,639
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
| Czech Republic
| | | | | 12,611 | |
-
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | 1,392,841 | |
1,170,217
|
+--------------------------------------+--------+--------+--------------+--
=----+--------------+-----+----------------+
|
| | | | | _______ | |
_______
|
+--------------------------------------+--------+--------+--------------+--
-----+--------------+-----+----------------+
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
_______________________________________________________________________________
_________
2 Other operating expenses
+-------------------------------------------------------------+------------------------------------+---------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+------------------------------------+---------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------+------------------------------------+---------------+
| | | |
+-------------------------------------------------------------+------------------------------------+---------------+
| Selling and distribution | 304,428 | 234,450 |
+-------------------------------------------------------------+------------------------------------+---------------+
| Administrative expenses | 85,786 | 59,935 |
+-------------------------------------------------------------+------------------------------------+---------------+
| | _______ | _______ |
+-------------------------------------------------------------+------------------------------------+---------------+
| | | |
+-------------------------------------------------------------+------------------------------------+---------------+
| | 390,214 | 294,385 |
+-------------------------------------------------------------+------------------------------------+---------------+
| | _______ | _______ |
+-------------------------------------------------------------+------------------------------------+---------------+
Administrative expenses include non-recurring costs of GBP6,587,603 (2008:
GBP7,147,721) (see note 3).
3 Non-recurring costs
In the current year administrative expenses include non-recurring costs of
GBP6,587,603 in relation to integration costs following the acquisition of
Gamestation. In the prior year, non-recurring costs totalled GBP7,147,721;
GBP2,957,051 was in relation to integration fees on the acquisition of
Gamestation and GBP4,190,670 was incurred dealing with the merger control review
of the Gamestation acquisition by the Office of Fair Trading and Competition
Commission
4 Operating profit
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | | 2009 | 2008 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | | GBP'000 | GBP'000 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | | | |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| This is stated after charging: | | | |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| Depreciation charge | | 25,264 | 18,583 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| Amortisation of intangible fixed assets | 3,637 | 2,004 |
+---------------------------------------------------------------------------------------+-----------+----------------+
| Operating lease rentals | - leasehold premises | 82,392 | 65,569 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - other | 1,627 | 1,214 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| Loss on disposal of non current assets | 146 | 286 |
+---------------------------------------------------------------------------------------+-----------+----------------+
| Auditors' remuneration | - Fees payable to the company's auditor for the | 85 | 87 |
| | audit of the company's annual accounts | | |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - Fees payable for the audit of the company's | 330 | 294 |
| | subsidiaries, pursuant to legislation | | |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - other services supplied pursuant to | 32 | 44 |
| | legislation | | |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - other services relating to tax | 178 | 117 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - Recruitment and remuneration services | - | 31 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | - All other services | 70 | 11 |
+----------------------------------+----------------------------------------------------+-----------+----------------+
| | | _______ | _______ |
+----------------------------------+----------------------------------------------------+-----------+----------------+
5 Finance income
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | 2009 | 2008 |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | GBP'000 | GBP'000 |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | | |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| Interest income on financial assets classified as loans and receivables | 1,805 | 1,511 |
+--------------------------------------------------------------------------+-----------------------+---------------+
| | | _______ | _______ |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | | |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | 1,805 | 1,511 |
+----------------------------+---------------------------------------------+-----------------------+---------------+
| | | _______ | _______ |
+----------------------------+---------------------------------------------+-----------------------+---------------+
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
_______________________________________________________________________________
_________
6 Finance costs
+-------------------------------------------------------------------+----------------------------+-----------------+
| | 2009 | 2008 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| | | |
+-------------------------------------------------------------------+----------------------------+-----------------+
| Interest expense for finance lease and hire purchase arrangements | 35 | 102 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| Interest expense for borrowings at amortised cost | 8,667 | 8,223 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| Other interest | 30 | 16 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| | _______ | _______ |
+-------------------------------------------------------------------+----------------------------+-----------------+
| | | |
+-------------------------------------------------------------------+----------------------------+-----------------+
| Finance costs | 8,732 | 8,341 |
+-------------------------------------------------------------------+----------------------------+-----------------+
| | _______ | _______ |
+-------------------------------------------------------------------+----------------------------+-----------------+
7 Employees
Staff costs for all employees (including directors) consist of:
+----------------------------------------------------------------------------+---------------------+---------------+
| | 2009 | 2008 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| Wages and salaries | 127,001 | 101,878 |
+----------------------------------------------------------------------------+---------------------+---------------+
| Social security costs | 16,807 | 12,831 |
+----------------------------------------------------------------------------+---------------------+---------------+
| Other pension costs | 1,445 | 743 |
+----------------------------------------------------------------------------+---------------------+---------------+
| Share-based payment expense | 1,968 | 1,204 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | _______ | _______ |
+----------------------------------------------------------------------------+---------------------+---------------+
| | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| | 147,221 | 116,656 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | _______ | _______ |
+----------------------------------------------------------------------------+---------------------+---------------+
| | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| The average number of employees of the Group | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| during the year, including directors, was as follows: | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| | 2009 | 2008 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | Number | Number |
+----------------------------------------------------------------------------+---------------------+---------------+
| | | |
+----------------------------------------------------------------------------+---------------------+---------------+
| Selling | 9,571 | 7,271 |
+----------------------------------------------------------------------------+---------------------+---------------+
| Administration | 879 | 688 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | _______ | _______ |
+----------------------------------------------------------------------------+---------------------+---------------+
| | 10,450 | 7,959 |
+----------------------------------------------------------------------------+---------------------+---------------+
| | _______ | _______ |
+----------------------------------------------------------------------------+---------------------+---------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
8 Taxation
+--------------------------------------------------------------------------+-----------------------+--------------+
| (a) Analysis of charge in the year | 2009 | 2008 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Current tax | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| UK corporation tax | 34,235 | 19,615 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Adjustments in respect of prior periods | 190 | (1,191) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Overseas tax payable | 4,903 | 3,436 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Total current tax | 39,328 | 21,860 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Deferred tax | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Current year movement | (5,194) | (191) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Adjustment to estimated recoverable deferred tax asset | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| arising in previous period | - | 825 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Prior year movement | 39 | (1,274) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Change in tax rates | - | (37) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Taxation on profit on ordinary activities | 34,173 | 21,183 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| (b) Factors affecting the tax charge for the year | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | 2009 | 2008 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Profit on ordinary activities before taxation | 119,613 | 68,362 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Profit on ordinary activities multiplied by the standard | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| rate of corporation tax in the UK of 28.3% (2008: 30%) | 33,884 | 20,509 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Effects of: | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Expenses not deductible for tax purposes | 1,892 | 1,441 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Effect of foreign tax rates | 538 | 439 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Tax losses incurred and (utilised)/not utilised in the year | (1,903) | 471 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Adjustment to estimated recoverable deferred tax asset | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| arising in previous period | - | 825 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Adjustments to tax charge in respect of previous periods | 229 | (2,465) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Other items | (467) | (37) |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | | |
+--------------------------------------------------------------------------+-----------------------+--------------+
| Tax charge for the year | 34,173 | 21,183 |
+--------------------------------------------------------------------------+-----------------------+--------------+
| | _______ | _______ |
+--------------------------------------------------------------------------+-----------------------+--------------+
The Group has approximately GBP16 million (2008: GBP20 million) of unrelieved
trading losses available for offset against future taxable profits of certain
Group companies.
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
9 Dividends
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | 2009 | 2009 | 2008 | 2008 |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | Pence | | Pence | |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | per share | GBP'000 | per share | GBP'000 |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | | | | |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| Final paid | 2.97 | 10,292 | 1.66 | 5,636 |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| Interim paid | 1.79 | 6,198 | 1.43 | 4,905 |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | | _______ | | _______ |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | | | | |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | | 16,490 | | 10,541 |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
| | | _______ | | _______ |
+-------------------------------------------------+-----------------------+------------+-------------+---------------+
It is proposed that a final dividend of 3.71p will be paid on 17 July 2009 to
shareholders on the register on 29 May 2009.
10 Earnings per share
The calculation of earnings per share for the 53 weeks ended 31 January 2009 is
based on the profit after taxation of GBP85,440,116 (2008: GBP47,178,969). The
calculation of basic earnings per share is based on a weighted average number of
345,895,311 (2008: 342,198,365) shares in issue during the year. The number of
shares used in these calculations and the reconciliation of denominators used
for basic and diluted earnings per share calculations is set out in the table
below:
+--------------------------------------------+----------------------------+--------------------+-----------------+
| | | Effect of | |
+--------------------------------------------+----------------------------+--------------------+-----------------+
| | Basic | share options | Diluted |
+--------------------------------------------+----------------------------+--------------------+-----------------+
| | | | |
+--------------------------------------------+----------------------------+--------------------+-----------------+
| Year ended 31 January 2009 | 345,895,311 | 1,128,717 | 347,024,028 |
+--------------------------------------------+----------------------------+--------------------+-----------------+
| | | | |
+--------------------------------------------+----------------------------+--------------------+-----------------+
| Year ended 31 January 2008 | 342,198,365 | 3,405,544 | 345,603,909 |
+--------------------------------------------+----------------------------+--------------------+-----------------+
Additional disclosure has been provided in respect of earnings per share before
non-recurring costs as the directors believe this gives a better view of ongoing
maintainable earnings in the prior year.
+--------------------------------------------------------------------------------------+------------+--------------+
| | 2009 | 2008 |
+--------------------------------------------------------------------------------------+------------+--------------+
| | Pence | Pence |
+--------------------------------------------------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------------------------------------------------+------------+--------------+
| Basic earnings per share | 24.70 | 13.79 |
+--------------------------------------------------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------------------------------------------------+------------+--------------+
| Non-recurring costs per share | 1.91 | 2.09 |
+--------------------------------------------------------------------------------------+------------+--------------+
| | ________ | ________ |
+--------------------------------------------------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------------------------------------------------+------------+--------------+
| Basic earnings per share before | | |
+--------------------------------------------------------------------------------------+------------+--------------+
| non-recurring costs | 26.61 | 15.88 |
+--------------------------------------------------------------------------------------+------------+--------------+
| | ________ | ________ |
+--------------------------------------------------------------------------------------+------------+--------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
11 Property, plant and equipment
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | Short | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | Freehold | leasehold | Improvements | Fixtures, | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | land and | land and | to leasehold | fittings and | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | property | property | property | equipment | Total |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Group | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Cost | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2007 | 19,474 | 35,246 | 50,742 | 53,628 | 159,090 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Additions | 1,089 | 5,071 | 18,091 | 12,967 | 37,218 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Acquisitions | - | - | 13,629 | 5,848 | 19,477 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Disposals | - | (25) | (1,873) | (1,683) | (3,581) |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Exchange adjustment | - | 2,851 | 2,572 | 1,609 | 7,032 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2008 | 20,563 | 43,143 | 83,161 | 72,369 | 219,236 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Additions | 110 | 4,090 | 19,085 | 25,442 | 48,727 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Acquisitions | 125 | 224 | 33 | 224 | 606 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Disposals | (13) | (423) | (2,326) | (1,915) | (4,677) |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Exchange adjustment | 9 | 6,126 | 6,419 | 3,298 | 15,852 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2009 | 20,794 | 53,160 | 106,372 | 99,418 | 279,744 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Accumulated Depreciation and Impairment | | | | |
+-----------------------------------------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2007 | 934 | 6,730 | 19,046 | 31,385 | 58,095 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Charge for the year | 389 | 1,335 | 8,145 | 8,714 | 18,583 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Acquisitions | - | - | 9,639 | 3,880 | 13,519 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Disposals | - | (375) | (1,434) | (1,266) | (3,075) |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Exchange adjustment | - | 89 | 631 | 732 | 1,452 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2008 | 1,323 | 7,779 | 36,027 | 43,445 | 88,574 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Charge for the year | 581 | 1,663 | 11,578 | 11,442 | 25,264 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Acquisitions | 71 | - | 7 | 85 | 163 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Disposals | (16) | (338) | (1,068) | (2,087) | (3,509) |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Exchange adjustment | (116) | 255 | 1,987 | 1,517 | 3,643 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2009 | 1,843 | 9,359 | 48,531 | 54,402 | 114,135 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| Carrying Amount | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2009 | 18,951 | 43,801 | 57,841 | 45,016 | 165,609 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2008 | 19,240 | 35,364 | 47,134 | 28,924 | 130,662 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | | | | | |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| At 31 January 2007 | 18,540 | 28,516 | 31,696 | 22,243 | 100,995 |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+----------------+-----------------+-------------------+----------------+---------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
11 Property, plant and equipment (continued)
The net book value of tangible fixed assets includes an amount of GBP1,217,221
(2008: GBP1,358,429) in respect of assets held under finance lease and hire
purchase contracts, and these are recorded in fixtures, fittings and equipment.
The related depreciation charge for the year was GBP579,056 (2008:
GBP1,284,695). The main finance leases are for EPOS equipment and motor
vehicles.
The amount of interest capitalised during the year amounted to GBPnil (2008:
GBPnil), bringing the total amount of capitalised interest to date to
GBP741,500. The related depreciation charge for the year was GBP31,500 (2008:
GBP31,500).
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
12Intangible fixed assets
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | Goodwill | Brands | Computer | Total |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | Software | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Group | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Cost | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2007 | 98,828 | 1,002 | 5,151 | 104,981 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Acquisitions | 52,770 | 16,300 | 1,750 | 70,820 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Additions | - | - | 2,703 | 2,703 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Foreign exchange adjustment | 519 | 689 | (624) | 584 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Disposals | - | - | (8) | (8) |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2008 | 152,117 | 17,991 | 8,972 | 179,080 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Acquisitions | 6,233 | 187 | 122 | 6,542 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Additions | 306 | 25 | 4,433 | 4,764 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Foreign exchange adjustment | 2,001 | 44 | 112 | 2,157 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Disposals | - | (83) | (24) | (107) |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2009 | 160,657 | 18,164 | 13,615 | 192,436 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Amortisation | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2007 | 3 | 136 | 3,320 | 3,459 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Acquisitions | - | - | 711 | 711 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Charge for the period | - | 984 | 1,020 | 2,004 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Foreign exchange adjustment | 32 | - | 52 | 84 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Disposals/impairments | - | - | (49) | (49) |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2008 | 35 | 1,120 | 5,054 | 6,209 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Acquisitions | - | 5 | 68 | 73 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Charge for the period | - | 1,155 | 2,482 | 3,637 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Foreign exchange adjustment | 170 | (4) | 84 | 250 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Disposals/impairments | - | - | - | - |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2009 | 205 | 2,276 | 7,688 | 10,169 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| Carrying Amount | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2009 | 160,452 | 15,888 | 5,927 | 182,267 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2008 | 152,082 | 16,871 | 3,918 | 172,871 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | | | | |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| At 31 January 2007 | 98,825 | 866 | 1,831 | 101,522 |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
| | _______ | _______ | _______ | _______ |
+--------------------------------------------+------------------+---------------------+---------------+--------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
12Intangible fixed assets (continued)
Goodwill principally relates to the GAME and Gamestation brands. The goodwill is
allocated, for impairment testing purposes, to cash generating units as follows:
+--------------------------+--------------------+
| | GBP'000 |
+--------------------------+--------------------+
| | |
+--------------------------+--------------------+
| UK and Ireland | 135,033 |
+--------------------------+--------------------+
| International | 25,419 |
+--------------------------+--------------------+
| | _______ |
+--------------------------+--------------------+
| Total | 160,452 |
+--------------------------+--------------------+
| | _______ |
+--------------------------+--------------------+
The carrying value of goodwill has been assessed on a value-in-use basis. The
key assumptions for the calculations are those regarding growth rates and
expected changes to selling prices and direct costs. The growth rates are based
on industry forecasts, changes in selling prices and direct costs are based on
past practices and expectations of future changes in the market. The Group
prepares cash flow forecasts derived from the most recent financial budgets
approved by management for the next 3 years and extrapolates cash flows for no
more than 13 years using a steady growth rate applicable to the relevant market.
This rate does not exceed the average long-term growth rate for the relevant
markets. The cash flows were discounted using pre-tax discount rates between 8%
and 13% dependent on the territories concerned and GAME's operations in those
territories. No impairments were recognised in the year.
To cause the carrying value of any of the Group's business units to exceed their
recoverable amount would require material and significant adverse changes in one
or a number of the assumptions made. The Board do not consider these to be
reasonably possible changes.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
13 Inventories
+-------------------------------------------------------+----------------------------------------+----------------+
| | 2009 | 2008 |
+-------------------------------------------------------+----------------------------------------+----------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------+----------------------------------------+----------------+
| | | |
+-------------------------------------------------------+----------------------------------------+----------------+
| Finished goods and goods held for resale | 181,965 | 145,041 |
+-------------------------------------------------------+----------------------------------------+----------------+
| | _______ | _______ |
+-------------------------------------------------------+----------------------------------------+----------------+
The Directors consider that the replacement value of inventories is not
materially different from their carrying value. The stock provision in the
current year is GBP20,338,000 (2008: GBP11,748,000).
14 Trade and other receivables
+--------------------------------------------------------+----------------------------------------+---------------+
| | 2009 | 2008 |
+--------------------------------------------------------+----------------------------------------+---------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------------+----------------------------------------+---------------+
| | | |
+--------------------------------------------------------+----------------------------------------+---------------+
| Amounts falling due within one year: | | |
+--------------------------------------------------------+----------------------------------------+---------------+
| Trade receivables | 16,197 | 18,921 |
+--------------------------------------------------------+----------------------------------------+---------------+
| Other receivables | 22,066 | 14,050 |
+--------------------------------------------------------+----------------------------------------+---------------+
| VAT recoverable | 64 | 324 |
+--------------------------------------------------------+----------------------------------------+---------------+
| | _______ | _______ |
+--------------------------------------------------------+----------------------------------------+---------------+
| | | |
+--------------------------------------------------------+----------------------------------------+---------------+
| Total trade and other receivables | 38,327 | 33,295 |
+--------------------------------------------------------+----------------------------------------+---------------+
| Prepayments and accrued income | 17,138 | 20,550 |
+--------------------------------------------------------+----------------------------------------+---------------+
| | _______ | _______ |
+--------------------------------------------------------+----------------------------------------+---------------+
| | | |
+--------------------------------------------------------+----------------------------------------+---------------+
| | 55,465 | 53,845 |
+--------------------------------------------------------+----------------------------------------+---------------+
| | _______ | _______ |
+--------------------------------------------------------+----------------------------------------+---------------+
A large proportion of the trade receivables of the Group relates to customers
using credit cards or similar arrangements to purchase goods. GAME bears no
risk of recovery and as a result, the risk of impairment of accounts receivable
is not considered by the Directors to be significant.
As at 31 January 2009 and 31 January 2008 there were no amounts which were past
due and no amounts which were impaired.
15 Trade and other payables
+--------------------------------------------------+----------------------------------------------+---------------+
| | 2009 | 2008 |
+--------------------------------------------------+----------------------------------------------+---------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+----------------------------------------------+---------------+
| | | |
+--------------------------------------------------+----------------------------------------------+---------------+
| Amounts falling due within one year: | | |
+--------------------------------------------------+----------------------------------------------+---------------+
| Trade payables | 216,156 | 192,529 |
+--------------------------------------------------+----------------------------------------------+---------------+
| Other payables | 6,895 | 7,838 |
+--------------------------------------------------+----------------------------------------------+---------------+
| Tax and social security costs | 8,930 | 4,039 |
+--------------------------------------------------+----------------------------------------------+---------------+
| VAT payable | 45,359 | 50,206 |
+--------------------------------------------------+----------------------------------------------+---------------+
| Accruals and deferred income | 66,469 | 60,886 |
+--------------------------------------------------+----------------------------------------------+---------------+
| | _______ | _______ |
+--------------------------------------------------+----------------------------------------------+---------------+
| | | |
+--------------------------------------------------+----------------------------------------------+---------------+
| | 343,809 | 315,498 |
+--------------------------------------------------+----------------------------------------------+---------------+
| | _______ | _______ |
+--------------------------------------------------+----------------------------------------------+---------------+
Trade payables are non-interest bearing and are normally settled on 30 days
following the end of the month of receipt.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
16 Borrowings
+-----------------------------------------------------------+---------------------------------------+--------------+
| | 2009 | 2008 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Long term: | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Current portion: | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Bank loans | 25,948 | 37,515 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Obligations under finance leases and | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| hire purchase contracts | 377 | 523 |
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | 26,325 | 38,038 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Non current portion: | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Bank loans | 31,183 | 56,897 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| Obligations under finance leases and | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| hire purchase contracts | 664 | 912 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | 31,847 | 57,809 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| The borrowings are repayable as follows: | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| On demand or within one year | 25,948 | 37,515 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| In one to two years | 31,183 | 25,924 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| In more than two years but less than five years | - | 30,973 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| After five years | - | - |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | 57,131 | 94,412 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| The finance leases are repayable as follows: | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| On demand or within one year | 377 | 523 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| In one to two years | 221 | 712 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| In more than two years but less than five years | 443 | 200 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| After five years | - | - |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | | |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | 1,041 | 1,435 |
+-----------------------------------------------------------+---------------------------------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------+---------------------------------------+--------------+
There is no material difference between the book value and current value of
these borrowings.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
17 Financial Instruments
Financial risk management
Categories of financial instruments
+-----------------------------------------------------------------------------------+--------------+----------------+
| Financial assets | Loans and Receivables |
+-----------------------------------------------------------------------------------+-------------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Current financial assets | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Trade and other receivables (Note 14) | 38,327 | 33,295 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Net cash and cash equivalents (Note 24) | 139,614 | 137,899 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | 177,941 | 171,194 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Financial Liabilities | Financial liabilities |
+-----------------------------------------------------------------------------------+-------------------------------+
| | measured at |
+-----------------------------------------------------------------------------------+-------------------------------+
| | amortised cost |
+-----------------------------------------------------------------------------------+-------------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Current financial liabilities | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Trade and other payables (Note 15) | 343,809 | 315,498 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Loans and borrowings (Note 16) | 26,325 | 38,038 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Total current financial liabilities | 370,134 | 353,536 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Non-current financial liabilities | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Loans and borrowings (Note 16) | 31,847 | 57,809 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Total non-current financial liabilities | 31,847 | 57,809 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------------------------------------------------+--------------+----------------+
| Total financial liabilities | 401,981 | 411,345 |
+-----------------------------------------------------------------------------------+--------------+----------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+--------------+----------------+
The Directors consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements
approximate their fair values.
The maximum exposure to credit risk at the reporting date is represented by the
carrying value of the financial assets in the balance sheet.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
17 Financial Instruments (continued)
The Directors review any requirement for interest rate hedging during the year
dependent upon the level of borrowings.
(a) Interest rate and currency of borrowings
The currency and interest rate exposure of the Group's borrowings is shown
below:
+--------------------------------------------+----------------------------------------------------+-----------------+
| | 2009 | 2008 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | | |
+--------------------------------------------+----------------------------------------------------+-----------------+
| Floating rate Euro borrowings | 2,131 | 14,412 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| Floating rate Sterling borrowings | 56,041 | 81,164 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| Floating rate AUD borrowings | - | 271 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | _______ | _______ |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | | |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | 58,172 | 95,847 |
+--------------------------------------------+----------------------------------------------------+-----------------+
| | _______ | _______ |
+--------------------------------------------+----------------------------------------------------+-----------------+
The floating rate borrowings comprise bank borrowings and finance leases bearing
interest rates based upon LIBOR and EURIBOR.
The Group holds a Revolving Credit Facility (RCF) of GBP70 million to be used
for general corporate and working capital purposes. As at 31 January 2009 an
amount of EURnil (2008: EUR15 million) was drawn down for use in Spain. The interest
rate on the RCF is based on LIBOR and EURIBOR.
The floating rate sterling borrowings comprise a GBP55 million Term Loan taken
out in order to fund the purchase of Gamestation and refinance the existing debt
at GAME. The interest rate on the loan is based on LIBOR. The second repayment
was made in January 2009 and two further instalments are due.
The terms of the loan facility indicates a fixed charge over the freehold
property and a floating charge over assets.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
17 Financial Instruments (continued)
(b) Interest rate and currency of cash balances
The currency and interest rate exposure of the Group's floating rate cash
balances is shown below:
+-----------------------------------------------------------------------------------+---------------+--------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | | |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Sterling | 109,254 | 84,840 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Euro | 21,765 | 47,237 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Swedish Krona | 3,377 | 1,757 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Danish Krone | 624 | 147 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Norwegian Krone | 1,115 | 490 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| Australian Dollar | 3,157 | 3,428 |
| Czech Koruna | 322 | - |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | | |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | 139,614 | 137,899 |
+-----------------------------------------------------------------------------------+---------------+--------------+
| | _______ | _______ |
+-----------------------------------------------------------------------------------+---------------+--------------+
The floating rate assets comprise bank accounts bearing interest rates based
upon LIBOR and EURIBOR. There are no fixed rate financial assets.
(c) Sensitivity analysis
The sensitivity analyses below are based on a change in an assumption while
holding all other assumptions constant. In practice this is unlikely to occur
and changes in some of the assumptions may be correlated, for example, a change
in interest rate and a change in foreign currency interest rates. The
sensitivity analysis prepared by management for foreign currency risk and
interest rate risk illustrates how changes in the fair value or future cash
flows of a financial instrument will fluctuate because of changes in foreign
exchange rates.
At 31 January 2009, if interest rates on the floating rate borrowings
denominated in sterling had been 100 basis points higher with all other
variables held constant, profit after tax for the period would be GBP1,137,427
lower (2008: GBP1,037,910 lower).
At 31 January 2009, if interest rates on the floating rate borrowings
denominated in euros had been 100 basis points higher with all other variables
held constant, profit after tax for the period would be GBP145,682 lower (2008:
GBP173,231 lower).
The Directors consider that 100 basis points is the maximum likely change to
sterling and euro interest rates over the next year, being the period up to the
next point at which the Group expects to make these disclosures.
The tables in (a) and (b) above present financial liabilities and assets
denominated in foreign currencies held by the Group in 2009 and 2008. If the
euro weakened or strengthened by 10% against sterling, with all other variables
held constant, profit after tax and equity would reduce by GBP850,255 (2008:
reduce by GBP352,146).
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
17 Financial Instruments (continued)
(d) Fair value of borrowings and financial assets
Set out below is an analysis of all the Group's borrowings and financial assets
by category. The fair value of floating rate borrowings is the amortised cost
because the interest rate payments are based on market value.
+------------------------------------------------------------+--------------------------------------+--------------+
| | 2009 | 2008 |
+------------------------------------------------------------+--------------------------------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+--------------------------------------+--------------+
| | | |
+------------------------------------------------------------+--------------------------------------+--------------+
| Trade and other receivables | 38,327 | 33,295 |
+------------------------------------------------------------+--------------------------------------+--------------+
| Net cash and cash equivalents | 139,614 | 137,899 |
+------------------------------------------------------------+--------------------------------------+--------------+
| Current portion of long term debt | (26,325) | (38,038) |
+------------------------------------------------------------+--------------------------------------+--------------+
| Non current portion of long term debt | (31,847) | (57,809) |
+------------------------------------------------------------+--------------------------------------+--------------+
| | _______ | _______ |
+------------------------------------------------------------+--------------------------------------+--------------+
There is no material difference between the book value and current value of
these borrowings.
(e) The Group had no material monetary assets or liabilities that are not
denominated in the functional currency of the
operating unit
involved
(f) As at 30 March 2009, the Group had undrawn working capital facilities
available to it of GBP32.0 million (2008:
GBP20.8 million) and Euro
nil (2008: Euro nil). There are no significant conditions attached to these
facilities.
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
17 Financial Instruments (continued)
Capital risk management
The capital structure of the Group consists of debt, which includes the
borrowings disclosed in note 16, cash and cash equivalents and equity
attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings as disclosed in notes 20, 21 and 22.
Gearing ratio
It is the Group's policy to maintain its gearing ratio within the range of
0-100% (2008: 0-100%). The Group's gearing ratio at the balance sheet date is
shown below:
+-------------------------------------------------------------+-------------------------------------+----------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | | |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Debt (i) | 58,172 | 95,847 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Trade and other payables | 343,809 | 315,498 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Net cash and cash equivalents | (139,614) | (137,899) |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | _______ | _______ |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | | |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Net debt | 262,367 | 273,446 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | _______ | _______ |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | | |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | | |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Equity (ii) | 290,408 | 203,922 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | _______ | _______ |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | | |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Capital and net debt | 552,775 | 477,368 |
+-------------------------------------------------------------+-------------------------------------+----------------+
| | _______ | _______ |
+-------------------------------------------------------------+-------------------------------------+----------------+
| Gearing ratio | 47% | 57% |
+-------------------------------------------------------------+-------------------------------------+----------------+
(i) Debt is defined as current and non-current portion of long term debt, as
detailed in note 16.
(ii) Equity includes all capital and reserves of the Group.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
18 Deferred taxation
+-------------------------------------------------------------------+------------------------------+--------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | | |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Accelerated capital allowances | 68 | (1,369) |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Tax losses carried forward | 1,596 | - |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Share options | 2,123 | 2,615 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Other temporary and deductible differences | (1,049) | (3,175) |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | _______ | _______ |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | | |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Deferred tax asset / (liability) | 2,738 | (1,929) |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | _______ | _______ |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | | |
+-------------------------------------------------------------------+------------------------------+--------------------+
| At 1 February 2008 | (1,929) | 1,111 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Acquisition of subsidiary | (46) | (3,739) |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Deferred tax charge in the income statement for the year (Note 8) | 5,155 | 677 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| Deferred tax taken to equity | (442) | 22 |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | _______ | _______ |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | | |
+-------------------------------------------------------------------+------------------------------+--------------------+
| At 31 January 2009 | 2,738 | (1,929) |
+-------------------------------------------------------------------+------------------------------+--------------------+
| | _______ | _______ |
+-------------------------------------------------------------------+------------------------------+--------------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
19 Leasehold property incentives
+--------------------------------------------------------------------+----------------------------+----------------+
| Rent free periods and reverse premiums | 2009 | 2008 |
+--------------------------------------------------------------------+----------------------------+----------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| At 1 February | 7,260 | 4,662 |
+--------------------------------------------------------------------+----------------------------+----------------+
| Rent free periods and reverse premiums received during the year | 3,240 | 3,239 |
+--------------------------------------------------------------------+----------------------------+----------------+
| Released to profit and loss account | (1,268) | (641) |
+--------------------------------------------------------------------+----------------------------+----------------+
| | _______ | _______ |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| At 31 January | 9,232 | 7,260 |
+--------------------------------------------------------------------+----------------------------+----------------+
| | _______ | _______ |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| Due within one year | 904 | 846 |
+--------------------------------------------------------------------+----------------------------+----------------+
| Due greater than one year | 8,328 | 6,414 |
+--------------------------------------------------------------------+----------------------------+----------------+
| | _______ | _______ |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| At 31 January | 9,232 | 7,260 |
+--------------------------------------------------------------------+----------------------------+----------------+
| | _______ | _______ |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
| | | |
+--------------------------------------------------------------------+----------------------------+----------------+
20 Called up share capital
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| | 2009 | 2008 |
+-----------------------------------------+------------------------------------------+---------------------------------+
| | GBP'000 | Number | GBP'000 | Number |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| | | | | |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| Authorised | | | | |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| Ordinary shares of 5p | 24,000 | 480,000,000 | 24,000 | 480,000,000 |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| | _______ | _________ | _______ | __________ |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| | | | | |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| Allotted, called up and fully paid | | | | |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| Ordinary shares of 5p | 17,316 | 346,323,657 | 17,167 | 343,344,566 |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
| | _______ | _________ | _______ | __________ |
+-----------------------------------------+----------------+-------------------------+-----------------+---------------+
a) Shares issued
During the year, 3,479,091 (2008: 3,273,405) shares were issued to employees
exercising share options granted under various option schemes. The total
consideration received on the exercise of these options was GBP1,763,287 (2008:
GBP2,725,551).
Between the year end and 1 April 2009, no shares have been exercised.
b) Shares purchased
During the year, 500,000 shares (2008: nil ) were repurchased for cancellation
by the Company at a cost of GBP1,240,950 (2008 : GBPnil).
c) Trust shares
During the year 1,800,000 shares (2008: 1,892,460 shares) were purchased at a
cost of GBP3,828,470 (2008: GBP3,666,622). These shares are to be used wholly
and exclusively to pay LTIP awards when they become due for payment.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
21 Share premium account
+------------------------------------------------------------------------+------------------------+----------------+
| | 2009 | 2008 |
+------------------------------------------------------------------------+------------------------+----------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------------------+------------------------+----------------+
| | | |
+------------------------------------------------------------------------+------------------------+----------------+
| Amount subscribed for share capital in excess of nominal value. | | |
+------------------------------------------------------------------------+------------------------+----------------+
| | | |
+------------------------------------------------------------------------+------------------------+----------------+
| At 1 February | 44,848 | 42,286 |
+------------------------------------------------------------------------+------------------------+----------------+
| Arising on issue of shares during the year (net of expenses) | 1,614 | 2,562 |
+------------------------------------------------------------------------+------------------------+----------------+
| | _______ | |
| | | _______ |
+------------------------------------------------------------------------+------------------------+----------------+
| | | |
+------------------------------------------------------------------------+------------------------+----------------+
| At 31 January | 46,462 | 44,848 |
+------------------------------------------------------------------------+------------------------+----------------+
| | _______ | _______ |
+------------------------------------------------------------------------+------------------------+----------------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
22 Reconciliation of Changes in Equity
+---------------------------+-----------+--------------+----------------+-----
=----+-----------+------------+-------------+-----------+
|
| Share | Share | Capital | Shares | Merger |
Retained | Foreign | Total
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| Capital | Premium | Redemption | held in | Reserve |
Earnings | Exchange |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| | | Reserve | Trust | |
| Reserve |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| At 1 February
2007 | 17,003 | 42,286 | 2,223 | (1,176) | 76,907
| 23,852 | (3,759) | 157,336
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Exchanges
differences | - | - | - | - |
- | - | 9,663 | 9,663
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| on translation
of foreign | | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| currency net
investment | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| in subsidiaries
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Deferred income
tax | - | - | - | - | - |
22 | - | 22
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| on share based
payments | | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| credited to
equity | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | ______ | ___ |
_____ | ______ | ______
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Net income
recognised | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| directly in
equity | - | - | - | - |
- | 22 | 9,663 | 9,685
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Net income
recognised | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| in income
statement | - | - | - | - |
- | 47,179 | - | 47,179
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | ______ | ______ |
________ | ______ | _____
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Total
recognised income | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| and expense
| - | - | - | - | - |
47,201 | 9,663 | 56,864
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Issue of shares
| 164 | 2,562 | - | - | - |
- | - | 2,726
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Purchase of
shares | - | - | - | (3,667) |
- | - | - | (3,667)
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Exercise of
options | - | - | - | 440 |
- | (440) | - | -
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Dividends paid
| - | - | - | - | - |
(10,541) | - | (10,541)
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Share based
payments | - | - | - | - |
- | 1,204 | - | 1,204
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | ______ | _____ | _____ |
____ | ____ | ______
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| At 1 February
2008 | 17,167 | 44,848 | 2,223 | (4,403) | 76,907
| 61,276 | 5,904 | 203,922
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | ______ | ______ |
____ | ______ | ______
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Exchanges
differences | - | - | - | - |
- | - | 17,550 | 17,550
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| on translation
of foreign | | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| currency net
investment | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| in subsidiaries
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Income tax on
share | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| based payments
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| - Deferred
tax | - | - | - | - | - |
(442) | - | (442)
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| - Current
tax | - | - | - | - | - |
1,789 | - | 1,789
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | ______ | ______ |
______ | ______ | ______
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| | | | | |
| |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Net income
recognised | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| directly in
equity | - | - | - | - |
- | 1,347 | 17,550 | 18,897
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Net income
recognised | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| in income
statement | - | - | - | - |
- | 85,440 | - | 85,440
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | ______ | ______ |
_____ | _____ | ______
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Total
recognised income | | | | |
| | |
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| and expense
| - | - | - | - | - |
86,787 | 17,550 | 104,337
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Issue of shares
| 126 | 1,614 | - | - | - |
- | - | 1,740
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Purchase of
shares | - | - | - | (3,828) |
- | - | - | (3,828)
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| Exercise of
options | - | - | - | 1,828 |
- | (1,828) | - | -
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Dividends paid
| - | - | - | - | - |
(16,490) | - | (16,490)
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
| Share buyback
| (25) | - | 25 | - | - |
(1,241) | - | (1,241) |
| Share based payments | -
| - | - | - | - | 1,968 |
- | 1,968 |
| Net settled options | 48 | - |
- | (48) | - | - | - | -
|
+---------------------------+-----------+--------------+----------------+--
=-------+-----------+------------+-------------+-----------+
|
| _____ | ______ | _______ | _____ | ______ |
_____ | | ______ |
| |
| | | | | |
____ |
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
| At 31 January
2009 | 17,316 | 46,462 | 2,248 | (6,451) | 76,907
| 130,472 | 23,454 | 290,408
|
+---------------------------+-----------+--------------+----------------+--
--------+-----------+------------+-------------+-----------+
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
Share Capital - The amount subscribed for share capital at nominal value
Share Premium - The amount subscribed for share capital in excess of nominal
value
Capital Redemption Reserve - relates to the capital redemption reserve; amounts
transferred from share capital on redemption of issued shares.
Shares held in Trust - relates to shares held in trust, being the weighted
average cost of own shares held in treasury and by the ESOP Trust, the Employee
Benefit Trust was established in January 2002 to provide for the future
obligations of the company for share awards under the Performance Share Plan and
other share based plans. Under the scheme the trustee, BDO Guernsey Trustees
Limited, purchases the Company's ordinary shares in the open market.
Merger Reserve - relates to the merger reserve which holds the share premium
arising on the share for share exchange on acquisition of Game Plc.
Retained Earnings - relates to retained earnings, being the cumulative net gains
and losses recognised in the consolidated income statements.
Foreign Exchange Reserve - relates to the foreign exchange reserve, which holds
gains/losses arising on re-translating the net assets of overseas operations
into sterling since 1 February 2004.
The cumulative amount of goodwill resulting from acquisitions in previous years
prior to the adoption of FRS10 (Goodwill and intangible assets) which has been
eliminated against Group reserves, net of goodwill attributable to disposals
before 31 January 2009, is GBP9,639,000 (2008: GBP9,639,000).
Notes to the Financial Statements for the 53 weeks ended 31 January 2009
(continued)
23 Acquisitions
Current year acquisitions
On 21 August 2008, the Group acquired 100% of the share capital of the Czech pc
and video games retailer JRC Czech a.s. On acquisition, JRC Czech a.s. owned 19
specialist pc and video games stores located in the principal cities in the
Czech market and transactional e-commerce site www.jrc.cz.
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | Book | | Fair |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | value | Adjustment | Value |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | | | |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Property, plant and equipment | 216 | - | 216 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Inventories | 903 | (48) | 855 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Trade and other receivables | 203 | (40) | 163 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Long-term debtors | 88 | - | 88 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Trade and other payables | (1,282) | (32) | (1,314) |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Cash and cash equivalents | (210) | - | (210) |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Intangible fixed assets - goodwill | 234 | (234) | - |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Intangible fixed assets - brand | 18 | 164 | 182 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | _______ | _______ | _______ |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Total net assets / (liabilities) | 170 | (190) | (20) |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | | | |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Initial cash consideration | | | 1,633 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Deferred consideration | | | 1,998 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | | | _______ |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | | | |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| Goodwill | | | 3,651 |
+-------------------------------------------------------------+---------------------+---------------+----------------+
| | | | _______ |
+-------------------------------------------------------------+---------------------+---------------+----------------+
From the date of acquisition JRC added GBP4.5 million to turnover and
GBP0.5 million to operating profit.
If the acquisition had been completed on the first day of the financial year,
Group revenues for the year would have been increased by GBP4.1 million and the
Group profit attributable to equity holders of the parent would have been
decreased by GBP13,000.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
23 Acquisitions (continued)
Current year acquisitions
On 2 July 2008 ABC Games International S.A., a subsidiary of GAME Group plc,
acquired five French franchises for a total consideration of GBP2.2 million,
reflecting cash of GBP0.6 million and other working capital. In addition, on 21
August 2008, a further franchise was acquired for an initial consideration of
GBP0.7 million.
During the period the trade and assets of four Spanish franchises were acquired
by Engine Tecnology Systems SL, a subsidiary of GAME Group plc, for a total
consideration of GBP0.8 million.
The results of these operations have been incorporated from the date of
acquisition.
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | French | Spanish | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | franchises | franchises | JRC | Total |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | Fair value | Fair value | Fair value | Fair value |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Property, plant and equipment | 263 | 18 | 216 | 497 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Inventories | 262 | 390 | 855 | 1,507 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Trade and other receivables | - | - | 163 | 163 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Long-term debtors | - | - | 88 | 88 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Trade and other payables | (221) | (331) | (1,314) | (1,866) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash and cash equivalents | 684 | - | (210) | 474 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Intangible fixed assets - goodwill | 1,882 | 700 | 3,651 | 6,233 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Intangible fixed assets - brand | - | - | 182 | 182 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Total purchase price | 2,870 | 777 | 3,631 | 7,278 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash and cash equivalents | (684) | - | 210 | (474) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash flows on acquisition net | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| of cash acquired | 2,186 | 777 | 3,841 | 6,804 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | ______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
From the date of acquisition the French franchises added GBP2.3 million to
turnover and GBP338,000 to operating profit.
From the date of acquisition the Spanish franchises added GBP1.5 million to
turnover and GBP160,000 to operating profit.
If these acquisitions had been completed on the first day of the financial year,
it is not anticipated that the operating profit would have been materially
different. No fair value adjustments were required on these acquisitions.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
23 Acquisitions (continued)
Prior year acquisitions
On 2 May 2007 the Group acquired 100% of the share capital of the UK pc and
video games retailer Gamestation. On acquisition Gamestation operated 217 owned
stores throughout the UK. The business was acquired for an initial consideration
of GBP76 million and a post completion deferred payment of GBP7.6 million, to
reflect cash of GBP4.3 million and other working capital, plus fees of
GBP2.6 million.
On 1 July 2007 Engine Tecnology Systems SL, a subsidiary of Game Group PLC,
acquired 100% of the share capital of the Spanish retailer Mail Vigo which owned
a GAME Spanish franchise. On acquisition Mail Vigo operated three owned stores
throughout Spain. The business was acquired for an initial consideration of
GBP413,000.
In addition four Spanish franchises were acquired - Vigo Pontevedra,
Fuenguirola, Valladolid and Coruna - for a total consideration of GBP512,000.
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | | Spanish | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | Mail Vigo | franchises | Gamestation | Total |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | Fair value | Fair value | Fair value | Fair value |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Property, plant and equipment | 87 | - | 5,871 | 5,958 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Inventories | 169 | 236 | 31,148 | 31,553 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Trade and other receivables | 19 | - | 4,813 | 4,832 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Trade and other payables | (240) | (250) | (25,169) | (25,659) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash and cash equivalents | 94 | - | 4,289 | 4,383 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Long term borrowings | (109) | - | - | (109) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Tax asset | - | - | (3,898) | (3,898) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Intangible fixed assets - goodwill | 393 | 526 | 51,851 | 52,770 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Intangible fixed assets - brand | - | - | 16,300 | 16,300 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Intangible fixed assets - other | - | - | 1,039 | 1,039 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Total purchase price | 413 | 512 | 86,244 | 87,169 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash and cash equivalents | (94) | - | (4,289) | (4,383) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Non-cash | - | - | (1,845) | (1,845) |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | _______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| Cash flows on acquisition net | | | | |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| of cash acquired | 319 | 512 | 80,110 | 80,941 |
+------------------------------------------+--------------+--------------+-----------------+--------------+
| | ______ | _______ | _______ | _______ |
+------------------------------------------+--------------+--------------+-----------------+--------------+
From the date of acquisition Mail Vigo, Vigo Pontevedra, Fuenguirola,
Valladolid and Coruna added GBP1,544,000, GBP271,000, GBP785,000, GBP222,000,
and GBP294,000 to turnover respectively and GBP237,000, GBP36,000, GBP113,000,
GBP9,000 and GBP31,000 to operating profit respectively.If these acquisitions
had been completed on the first day of the financial year, it is not anticipated
that the operating profit would have been materially different. No fair value
adjustments were required on these acquisitions.
From the date of acquisition Gamestation added GBP273 million to turnover and
GBP12 million to operating profit.If the acquisition had been completed on the
first day of the financial year, Group revenues for the year would have been
increased by GBP67 million and the Group profit attributable to equity holders
of the parent would have been decreased by GBP1.5 million.
Notes to the Financial Statements for the 53 weeks ended 31 January
2009 (continued)
24 Analysis of net funds
+-----------------------------------------------------------+-----------------------------+------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | | |
+-----------------------------------------------------------+-----------------------------+------------------------+
| Cash and cash equivalents | 139,614 | 137,899 |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | _______ | _______ |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | | |
+-----------------------------------------------------------+-----------------------------+------------------------+
| Net cash and cash equivalents | 139,614 | 137,899 |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | | |
+-----------------------------------------------------------+-----------------------------+------------------------+
| Current portion of long term borrowings | (26,325) | (38,038) |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | | |
+-----------------------------------------------------------+-----------------------------+------------------------+
| Long term borrowings | (31,847) | (57,809) |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | _______ | _______ |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | | |
+-----------------------------------------------------------+-----------------------------+------------------------+
| Net funds | 81,442 | 42,052 |
+-----------------------------------------------------------+-----------------------------+------------------------+
| | _______ | _______ |
+-----------------------------------------------------------+-----------------------------+------------------------+
During the year, the Group entered into new finance lease arrangements in
respect of assets with a total capital cost of GBP443,270 (2008: GBP279,695).
25 Operating lease commitments
The Group leases certain land and buildings on short term leases. The rents
payable under these leases are subject to re-negotiation at various intervals
specified in the leases. At the balance sheet date, the Group has outstanding
commitments for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | Motor | Land & | Motor | Land & |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | vehicles | buildings | vehicles | buildings |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | 2009 | 2009 | 2008 | 2008 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | | | | |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| The total future minimum lease payments are due | | | | |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| as follows: | | | | |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| Not later than one year | 88 | 1,495 | 189 | 486 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| Later than one year but not later than five years | 980 | 83,507 | 352 | 53,396 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| Later than five years | 95 | 384,509 | - | 402,460 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | _______ | _______ | _______ | _______ |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | | | | |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | 1,163 | 469,511 | 541 | 456,342 |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
| | _______ | _______ | _______ | _______ |
+----------------------------------------------------------+------------+--------------+--------------+----------------+
The average remaining term on operating leases over land and buildings is 6
years.
The operating leases over land and buildings in International operations have
lengths of term for a maximum period of 9 years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FGGZDLMLGLZG
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