AGM Statement
July 02 2009 - 2:00AM
UK Regulatory
TIDMGMG
RNS Number : 9544U
Game Group PLC
02 July 2009
2 July 2009
GAME GROUP PLC ("GAME")
ANNUAL GENERAL MEETING: TRADING UPDATE TO 27 JUNE 2009
Peter Lewis, the Chairman of GAME, Europe's leading specialist retailer of
pc and video games products, has made the following statement in advance of the
company's Annual General Meeting at 10.00am today.
Trading Update
"I am pleased to report that GAME continues to perform in line with our
expectations.
For the first 21 weeks to 27 June 2009, total Group sales were down by 9.1%.
Like for like (lfl) Group sales for the same period were down by 15.4%. In the
UK and Ireland, total sales were down by 12.4% and lfl sales were down by 15.8%.
In our International business, total sales were down by 1.1% and lfl sales were
down by 14.4%.
These lfl results are in line with expectations given the very strong sales in
the comparative period (+25.0% lfl) in 2008, which included unprecedented
software releases such as Mario Kart, Wii Fit and Grand Theft Auto (GTA) IV.
We have seen good gross margin growth due to higher margin software and
accessory sales being a larger part of the sales mix and our preowned
proposition continuing to perform well.
Our sales performance to date, together with our gross margin increases and
continued cost focus, means that we expect to deliver first half profits before
tax and non-recurring costs in line with plan at between GBP13m and
GBP16m (2008/09: GBP36.4m). The profit performance last half year was
exceptional and this half year should be viewed in the context of our seasonal
business, when customarily all Group profits are made in the second half.
Integration
The integration of our GAME and Gamestation businesses is progressing well and
remains in line with the planned timetable. We expect the two brands to share
the same operating and distribution platform by September 2009.
We remain confident of generating synergies of around GBP16m this
year
(2008/09: GBP10m). The non-recurring costs of the integration will be
in the region of GBP6.5m this year and the capital costs will be approximately
GBP5m.
Capital Expenditure and store portfolio
In the year to date, we have opened a net 25 stores bringing the existing
portfolio to 1,367 stores (Note 1). We plan to open up to 50 to 60 additional
stores before the key Christmas trading period. The majority of the store
openings will be in our International business.
We are continuing to invest in our multi-channel proposition, both in the UK and
Internationally. This will allow us to enhance the online customer shopping
experience and continue the growth we have experienced in our eCommerce
business.
Our capital expenditure for the year is estimated to be between GBP30m and
GBP35m (2008/09: GBP55m) excluding capital costs relating to the integration of
Gamestation.
The Board
As previously announced, Ben White will today be appointed to the Board as Group
Finance Director following the resignation of David Thomas. I am very pleased
to welcome Ben to the Board. His range of experience and knowledge of GAME will
be an asset to the business.
Outlook
To date, the first half performance in all our markets has been in line with our
expectations. We have maintained or improved market share in each of our
territories, and we remain focussed on providing the best service and value for
our customers through our unrivalled specialist retail proposition.
Whilst we remain mindful of the significant challenges in the wider economic
environment, our full year performance will be driven by the increased ownership
of consoles which will increase demand for software.
The installed base of third generation hardware continues to grow, albeit at
a slower rate than last year. (Note 2). In the UK the ownership of third
generation hardware rose by 54% in the 12 months to June 2009.
The second half software line up is very encouraging with strong titles such as
Wii Fit Plus, DJ Hero, Mario and Sonic at the Winter Olympics, Professor Layton
and Pandora's Box, Assassins Creed 2, Forza Motorsport 3, Singstar: Take That
and Halo ODST, along with the annual sequels to bestsellers including Call of
Duty Modern Warfare 2, FIFA 2010, Pro Evolution Soccer 2010, Need for Speed and
Splinter Cell. We expect our preowned business to continue to grow as consumers
focus increasingly on value for money.
In line with previous guidance we anticipate that, as higher margin new and
preowned software increases within the overall sales mix, the Group gross margin
for the year to 31 January 2010 will improve by 150 to 175 basis points (Note
3).
With the benefits from the GAME and Gamestation integration, good cost control
disciplines, the continued strength of preowned and online sales, the growing
installed base of hardware and the strong software line up, the Board remains
confident in the outlook for the year to 31 January 2010."
- ends -
Enquiries
The GAME Group plc: +44 (0)1256 784566
Lisa Morgan, Group Chief Executive
Ben White, Group Finance Director
Simon Soffe, Head of Group Communications
www.gamegroup.plc.uk
Brunswick: +44 (0)20
7404 5959
Jonathan Glass
Nina Coad
Oliver Hughes
Notes:
1. Store portfolio
+-------------------------------+------------+-------------------+-------------------+
| | | 27 June 2009 | 31 January 2009 |
+-------------------------------+------------+-------------------+-------------------+
| | | Number | Number |
+-------------------------------+------------+-------------------+-------------------+
| Company owned and concessions | | | |
+-------------------------------+------------+-------------------+-------------------+
| UK and Ireland | | 444 | 443 |
| - GAME | | 254 | 253 |
| - Gamestation | | | |
+-------------------------------+------------+-------------------+-------------------+
| Total UK and Ireland | | 698 | 696 |
+-------------------------------+------------+-------------------+-------------------+
| France | | 198 | 192 |
+-------------------------------+------------+-------------------+-------------------+
| Iberia | | 270 | 258 |
+-------------------------------+------------+-------------------+-------------------+
| Scandinavia | | 67 | 66 |
+-------------------------------+------------+-------------------+-------------------+
| Czech Republic | | 21 | 22 |
+-------------------------------+------------+-------------------+-------------------+
| Total Continental Europe | | 556 | 538 |
+-------------------------------+------------+-------------------+-------------------+
| Australia | | 107 | 101 |
+-------------------------------+------------+-------------------+-------------------+
| Total International | | 663 | 639 |
+-------------------------------+------------+-------------------+-------------------+
| Total owned and concessions | | 1,361 | 1,335 |
+-------------------------------+------------+-------------------+-------------------+
| Franchises | | | |
+-------------------------------+------------+-------------------+-------------------+
| France | | - | 1 |
+-------------------------------+------------+-------------------+-------------------+
| Iberia | | 5 | 5 |
+-------------------------------+------------+-------------------+-------------------+
| Australia | | 1 | 1 |
+-------------------------------+------------+-------------------+-------------------+
| Total franchises | | 6 | 7 |
+-------------------------------+------------+-------------------+-------------------+
| Total operational outlets | | 1,367 | 1,342 |
+-------------------------------+------------+-------------------+-------------------+
2. UK Installed Base (units, million)
+-----------+------+---------+---------+---------+---------+---------+---------+
| | Wii | NDS | DSi | PS3 | PSP | XB360 | Total |
+-----------+------+---------+---------+---------+---------+---------+---------+
| 27 Jun 09 | 5.4 | 9.1 | 0.3 | 2.2 | 3.3 | 3.9 | 24.2 |
+-----------+------+---------+---------+---------+---------+---------+---------+
| 31 Jan 09 | 5.1 | 9.0 | | 1.9 | 3.2 | 3.3 | 22.5 |
+-----------+------+---------+---------+---------+---------+---------+---------+
| 28 Jun 08 | 3.1 | 6.4 | | 1.3 | 2.8 | 2.2 | 15.8 |
+-----------+------+---------+---------+---------+---------+---------+---------+
| 02 Feb 08 | 2.2 | 5.5 | | 1.0 | 2.7 | 1.9 | 13.3 |
+-----------+------+---------+---------+---------+---------+---------+---------+
Source: GfK ChartTrack (www.chart-track.co.uk)
3. Group gross margin for the 6 months to 31 July 2008 was 27.0% and for the 12
months to 31 January 2009 was 26.2%
This information is provided by RNS
The company news service from the London Stock Exchange
END
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