TIDMGMG
RNS Number : 4612Z
Game Group PLC
23 September 2009
RNS
Half Year Results for the six months ended 31 July 2009
THE GAME GROUP PLC, Europe's leading retailer of pc and video games products,
today announces half year results for the six months ended 31 July 2009.
Summary of results
+----------------------------------------+---------------+----------------+
| All figures in GBP'm (unless stated) | Six months | Six months |
| | ended 31/7/09 | ended 31/7/08 |
+----------------------------------------+---------------+----------------+
| Group turnover | 690.8 | 742.6 |
+----------------------------------------+---------------+----------------+
| Gross profit margin (%) | 28.9 | 27.0 |
+----------------------------------------+---------------+----------------+
| Operating profit before non-recurring | 16.7 | 38.5 |
| costs | | |
+----------------------------------------+---------------+----------------+
| Non-recurring costs | 3.7 | 3.0 |
+----------------------------------------+---------------+----------------+
| Operating profit | 13.0 | 35.5 |
+----------------------------------------+---------------+----------------+
| Profit before tax | 10.8 | 32.8 |
+----------------------------------------+---------------+----------------+
| Profit before non-recurring costs and | 14.5 | 35.8 |
| tax | | |
+----------------------------------------+---------------+----------------+
| Basic earnings per share before | 3.29 | 7.51 |
| non-recurring costs (pence) | | |
+----------------------------------------+---------------+----------------+
| Basic earnings per share (pence) | 2.23 | 6.63 |
+----------------------------------------+---------------+----------------+
| Interim dividend per share (pence) | 1.88 | 1.79 |
+----------------------------------------+---------------+----------------+
| Trading store numbers | 1,368 | 1,245 |
+----------------------------------------+---------------+----------------+
| Trading square footage (sq. | 1,417 | 1,296 |
| ft.thousands) | | |
+----------------------------------------+---------------+----------------+
Financial highlights
* Total Group sales down 7.0% and like for like ('lfl') sales down by 16.3%
* Strong growth in gross margin, up 190 basis points ('bps')
* First half profit in line with expectations at GBP14.5m before non-recurring
costs and tax (2008: GBP35.8m)
*
* Interim dividend up 5.0% to 1.88pTotal sales in the 33 weeks ended 19 September 2009 down 8.8% and lfl sales down 16.6%
Operational highlights
* Dual brand proposition working well and on track to deliver full year synergies
of GBP16m
* Revenues for preowned increased to GBP177.3m (2008: GBP157.8m) representing
25.7% (2008: 21.3%) of first half sales.
* Preowned gross margin up by 290 bps to 41.0%
* Online strategy progressing well, with 12.1% increase in revenues
* Continued focus on costs
* Strong balance sheet with minimal gearing, and refinanced facilities
Revised Guidance
* Gross margin growth guidance for the full year raised to 170 - 220 bps from 150
- 175 bps
Peter Lewis, Chairman, said:
"These were solid results for the Group. We have returned to more normal trading
patterns where historically we have generated nearly all Group profits in the
second half of the year.
We outperformed markets that showed year on year declines following last year's
unprecedented sales of hardware and record breaking software launches.
Key elements of our business have shown resilience. We achieved year on year
growth in preowned sales, which increased 12.3% and now account for 25.7% (2008:
21.3%) of total sales, and in our online business we increased revenues by
12.1%. Our Reward Card membership has increased by over 1 million customers
since the start of the year to more than 13.3m.
We have increased total half year gross margins by 190 bps to 28.9%, with
preowned margins up 290 basis points to 41.0%.
In the second half, the installed base of third generation consoles will
continue to build. The recent manufacturer price reductions on the Microsoft
Xbox 360 Elite and Sony's new model Playstation 3 are helping to stimulate the
market for hardware. There is a broad and exciting line up of software and
accessory products scheduled for all consoles before Christmas.
The retail environment continues to be tough. In uncertain times, our brand
loyalty and our unique specialist proposition have never been more important.
This, combined with our strict cost disciplines, the record console installed
base and strong software line-up, means we remain optimistic for the key
Christmas selling period."
-ends -
+------------------------------------+------------------------------------+
| Enquiries: | |
+------------------------------------+------------------------------------+
| The GAME Group plc | +44 (0)1256 784566 |
+------------------------------------+------------------------------------+
| Lisa Morgan, Group Chief Executive | |
+------------------------------------+------------------------------------+
| Ben White, Group Finance Director | |
+------------------------------------+------------------------------------+
| Simon Soffe, Director of Investor Relations and Group Communications |
+-------------------------------------------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Brunswick | +44 (0)20 7404 5959 |
+------------------------------------+------------------------------------+
| Jonathan Glass | |
+------------------------------------+------------------------------------+
| Nina Coad | |
+------------------------------------+------------------------------------+
| Oliver Hughes | |
+------------------------------------+------------------------------------+
CHAIRMAN'S REPORT
Introduction:
"These were solid results for the Group, as we have returned to more normal
trading patterns where historically we have generated nearly all Group profits
in the second half of the year.
We outperformed markets that showed year on year declines following last year's
unprecedented sales of hardware and record breaking software launches including
Mario Kart, Wii Fit and Grand Theft Auto IV.
Key elements of our business have shown resilience. We achieved year on year
growth in preowned sales, which increased 12.3% and now account for 25.7% (2008:
21.3%) of total sales, and in our online business we increased revenues by
12.1%. Our Reward Card membership has increased by over 1 million customers
since the start of the year to more than 13.3m.
We have increased total half year gross margins by 190 bps to 28.9% with
preowned margins up 290 basis points to 41.0%.
Our performance is shaped by the technology in the market place and the customer
demand that it creates. The third generation of video games consoles is now well
established in the market with an installed base of just over 25m consoles, an
increase of 45% on last year. Manufacturers and publishers are focussed on
leveraging the substantial console installed base by releasing new software and
innovative ways to play, and a significant number of exciting new releases will
be launched into the market before Christmas.
Whilst we recognise that we are operating in a challenging wider economic
environment, the sales performance of the limited number of AAA new software
releases in the first half gives us continued confidence in customer demand for
video game products. Furthermore, the performance of our preowned business has
benefited the Group as customers increasingly seek out the best value for money.
Results
Group turnover for the six months to 31 July 2009 decreased by 7.0% to GBP690.8m
(2008: GBP742.6m), with lfl sales down by 16.3%. In the UK and Ireland, total
store sales decreased by 14.2% and lfl sales were down by 17.9%. In our
International operations, total store sales increased by 7.3% and lfl sales
decreased by 15.5%. Sales in our online business increased by 12.1%. This
overall Group performance can be attributed to the slower rate of hardware sales
and the paucity of major software launches, particularly compared to the first
half of last year.
We have delivered an increase in our gross margin of 190 bps. The increase was
achieved predominantly through higher margin preowned sales becoming a larger
part of the overall mix, and the improved gross margin on those preowned sales.
Additionally, we continue to benefit from our Gamestation acquisition synergies.
Group profit before tax and non-recurring costs was GBP14.5m (2008: GBP35.8m).
Profit before tax was GBP10.8m (2008: GBP32.8m) and basic earnings per share
were 2.23p (2008: 6.63p).
Your Board is declaring an interim dividend of 1.88p per share, an increase of
5%. Whilst the Board remains mindful of wider economic conditions, this
progressive dividend policy reflects the Board's views on the quality of the pc
and video games launch schedule in the second half.
Our net debt position at 31 July 2009 was GBP80.2m (2008: GBP57.8m). The slight
increase in cash outflow year on year is attributable to the reduced operating
profit and the timing of non-stock supplier payments.
Business Development
Our Market
The pc and video games market was worth approximately GBP4bn in the UK last
year, larger than either the music (GBP1.3bn3) or film markets (GBP2.3bn). The
third generation consoles and handheld machines from each of the main hardware
manufacturers, namely PS3 (Sony), Xbox360 (Microsoft), Wii (Nintendo), PSP
(Sony) and DS (Nintendo), have all been available in the market for at least two
years. In the first half of the year Nintendo launched a new version of the
Nintendo DS (the DSi). The overall rate of hardware growth has slowed compared
to the record levels of last year. However a price cut on the Xbox 360 Elite and
the introduction of a new Sony Playstation 3 model at a lower price have
stimulated sales in recent weeks.
The installed base of consoles in each of the territories in which we operate is
at significant levels, ranging from 140% of households in the UK to 66% in
France. The pc and video games market has a larger and more diverse customer
base than ever before with customers playing across multiple formats, and genre
types inspired by products offering new and innovative ways to play.
The schedule of new software releases across all formats is very strong for the
second half of this year and into 2010. There will be titles such as Call of
Duty Modern Warfare 2, Halo 3 ODST and Assassin's Creed 2 for the core gamers,
and much loved titles such as Mario & Sonic at the Winter Olympic Games, FIFA
2010, Professor Layton and Pandora's Box, and Wii Fit Plus for the more casual
players. Historically we have seen that popular new software releases also drive
the sale of hardware.
Our Proposition
In a marketplace which displays significant product range, choice and technical
innovation, the role of the specialist is crucial.
We offer customers the same unique specialist proposition through every market
in which we trade:
* 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 service and advice.
* Product and Range: We stock the widest range of pc and video games on the high
street and, as a leading specialist, we receive significant quantities of new
product. We are able to offer unique promotions, hardware bundle deals, limited
edition products and offers, and our own range of accessories. We offer
customers what they want at prices they can afford.
* Preowned: This is a vital component of our specialist offer. The ability to
trade-in and buy preowned games at GAME and Gamestation provides a material
benefit for customers, particularly in today's challenging economic climate. We
have developed our preowned offering over more than ten years, allowing us to
perfect our customer offer and enhance gross margins.
* Customer Loyalty: We have 13.3m Reward Card members around the world. They
receive points on every purchase that can later be used as discounts against
future purchases. This, together with preowned, is a significant part of our
customer value proposition. The resulting customer and transactional data allows
us to achieve a unique point of difference in our customer relationship
management.
Our customer facing proposition is underpinned by a strong operating
infrastructure:
* Property: We identify the store locations that will give us the best returns on
our investment in each country in which we operate. In the first half we have
opened a net 26 stores, bringing us to a total store number of 1,368. We plan to
open a further 50-60 stores before the end of the year.
* Ecommerce: We have an online offering that matches the quality and reputation of
our stores, selling both boxed and digital products. We continue to evolve our
online brand presence and digital offer as customers become more comfortable
with the technology.
* Business Relationships: To provide customers with a range of product and offers,
it is important that we maintain long-term and successful relationships with all
key suppliers.
* Distribution: Our distribution centres are dedicated to getting product quickly
and efficiently to our stores and to customers' homes.
We continue to target the Group's resources towards each of these operating
features, in each of our markets, depending on which displays the strongest
return on investment characteristics.
Store portfolio
+-------------------------------+--+----------------+---------------+--------------------+
| | | 31 July 2009 | 31 July 2008 | 31 January 2009 |
+-------------------------------+--+----------------+---------------+--------------------+
| | | Number | Number | Number |
+-------------------------------+--+----------------+---------------+--------------------+
| Company owned and concessions | | | | |
+-------------------------------+--+----------------+---------------+--------------------+
| UK and Ireland | | 444 | 423 | 443 |
| - GAME | | 254 | 246 | 253 |
| - Gamestation | | | | |
+-------------------------------+--+----------------+---------------+--------------------+
| Total UK and Ireland | | 698 | 669 | 696 |
+-------------------------------+--+----------------+---------------+--------------------+
| France | | 198 | 187 | 192 |
+-------------------------------+--+----------------+---------------+--------------------+
| Iberia | | 270 | 241 | 258 |
+-------------------------------+--+----------------+---------------+--------------------+
| Scandinavia | | 67 | 62 | 66 |
+-------------------------------+--+----------------+---------------+--------------------+
| Czech Republic | | 21 | - | 22 |
+-------------------------------+--+----------------+---------------+--------------------+
| Australia | | 108 | 72 | 101 |
+-------------------------------+--+----------------+---------------+--------------------+
| Total International | | 664 | 562 | 639 |
+-------------------------------+--+----------------+---------------+--------------------+
| Total owned and concessions | | 1,362 | 1,231 | 1,335 |
+-------------------------------+--+----------------+---------------+--------------------+
| Franchises | | | | |
+-------------------------------+--+----------------+---------------+--------------------+
| France | | - | 2 | 1 |
+-------------------------------+--+----------------+---------------+--------------------+
| Iberia | | 5 | 10 | 5 |
+-------------------------------+--+----------------+---------------+--------------------+
| Australia | | 1 | 2 | 1 |
+-------------------------------+--+----------------+---------------+--------------------+
| Total franchises | | 6 | 14 | 7 |
+-------------------------------+--+----------------+---------------+--------------------+
| Total operational outlets | | 1,368 | 1,245 | 1,342 |
+-------------------------------+--+----------------+---------------+--------------------+
| | | | | |
+-------------------------------+--+----------------+---------------+--------------------+
The UK and Ireland
In the final quarter of last year we saw unprecedented changes to the retail
landscape as some pc and video games retailers ceased to trade. We have
broadened the appeal of our offer and taken our share of the market that became
available.
We have opened a net two stores across our GAME and Gamestation brands in the
first half, giving us a 698 store portfolio. Our focus is on ensuring we are in
the right location for each of our brands.
Following the acquisition of Gamestation in the year to January 2008, we
delivered GBP10m of ongoing synergies in the 53 weeks ended January 2009. We
have targeted a further GBP6m of synergy benefits for this year, giving an
annualised rate of GBP16m going forward. We are on track to deliver these by the
end of January 2010.
To achieve these synergies there will be a total non-recurring charge of
approximately GBP6.5m this year of which GBP3.7m has been incurred in the year
to date. In addition, capital expenditure required to integrate the acquisition
this year will be in the region of GBP5m.
International
Our International business consists of eight countries. All of these countries
have been impacted by the challenging economic conditions. We have held our
market position in each of our territories. The International business now
represents 33.2% of Group revenue and 29.4% of gross profit.
We have opened a net 24 stores internationally. We are actively focussed on
building a platform for long term growth, opening stores in those territories
where we will see the greatest return on investment and benefits of scale -
Spain, where we are the market leader, and Australia where we are still building
our business to the appropriate scale. We expect new stores to pay-back on the
initial capital investment within two to three years.
Online Initiatives
We continue to focus on delivering a truly multi-channel proposition that allows
us to be the aggregator of choice in whichever way the customer wants to shop.
We are evolving our eCommerce, online and digital offer through a targeted
strategy:
Ecommerce: We operate three transactional websites in the UK (www.game.co.uk,
www.gamestation.co.uk, www.gameplay.co.uk) and five internationally, allowing
customers to order product for delivery direct to home. In the first half, we
have achieved revenues of GBP33.2m (2008: GBP29.6m) and operating profit of
GBP1.6m (2008: GBP1.8m).
Online Play: Many of our customers now play games online via mediums such as pc,
Xbox Live and Sony's Playstation Network. We participate in this area by selling
the original boxed products, accessories and online time cards which allow
customers to fully experience the online arena.
Digital distribution: This is a pc service, and involves downloading games
directly through a broadband internet connection. We offer customers a choice:
either to "Buy and Download" a specific title or to play a variety of games
using a subscription service called "Games on Demand". We have seen good growth
in these services, but to date they remain a small part of our online business.
We are able to track progress in the market and customer trends through our
Reward Card data and our leading relationships in the industry. We believe that,
over the longer term, interest in these various ways of playing video games will
increase. However, growth in this media is currently restricted by both customer
appetite and the inherent IT and broadband infrastructure of every country in
which we operate. We intend to invest up to GBP5m this year in our online and
digital proposition.
Treasury and Capital Expenditure
Balance Sheet and Capital Expenditure
Our net assets position has remained in line with the previous year end at
approximately GBP280m.
Fixed assets have remained relatively static as additions have been offset by
the depreciation charge in the half year. We expect to open a further 50 to 60
stores in the remainder of the year. This, combined with our online, IT,
infrastructure and integration spend will result in a full year capital
expenditure of between GBP30m and GBP35m.
Cash flow
Our net debt as at 31 July 2009 was GBP80.2m (2008: GBP57.8m). The slight
increase in cash outflow year on year is attributable to the reduced operating
profit and the timing of non-stock supplier payments. In the 2009/10 financial
year, average net debt is expected to be around GBP60m.
During the period we refinanced our borrowing facilities, giving us available
funds of GBP175m repayable in June 2012. This provides the financial flexibility
to deliver our specialist offer without compromise. In addition, the continuing
support of a syndicate of five banks reflects the strength of the GAME Group
proposition.
Employees
The wider economic conditions are challenging and I have been very pleased with
the way all of our employees have continued to work tirelessly to engage with
our customers and provide outstanding customer service. I would like to thank
them all.
Corporate Responsibility
We have developed our Corporate Responsibility strategy to best enhance our
reputation and our brand. We ensure that the way we work impacts positively on
the communities in which we operate and on our customers, suppliers and
stakeholders.
Current Trading and Prospects
In the 33 weeks ended 19 September 2009, total Group sales were down by 8.8%.
The UK and Ireland total store sales were down by 14.8%, International store
sales and total online sales were up by 2.3% and 4.2% respectively. For the same
period, Group lfl sales were down by 16.6%, with the UK and Ireland lfl sales
down by 18.0% and International lfl sales down by 16.4%. Overall, these results
reflect a continuation of the slower hardware sales we saw in the first half and
the fact that we are only just entering the period of significant software
releases.
In the second half, the installed base of third generation consoles will
continue to build. The recent manufacturer price reductions on the Microsoft
Xbox 360 Elite and Sony's new model Playstation 3 are helping to stimulate the
market for hardware. There is a broad and exciting line up of software and
accessory products scheduled for all consoles before Christmas including Call of
Duty Modern Warfare 2, Assassin's Creed 2, FIFA 2010, and Mario & Sonic at the
Winter Olympics.
Our well-established trade-in offer and preowned programme offers customers
exceptional value for money, and an increasing number of customers are
recognising this. At the half year preowned sales represented 25.7% (2008:
21.3%) of Group revenues. Consequently, we anticipate gross margin for the full
year will increase by between 170 and 220 basis points.
The retail environment continues to be tough.
In uncertain times our brand loyalty and our unique specialist proposition have
never been more important. We place the customer at the heart of everything we
do, delivering exceptional customer service and value through our unique Reward
Card scheme, our preowned programme and leading offers in our stores and online.
This, combined with our strict cost disciplines, the record console installed
base and strong software line-up, means we remain optimistic for the key
Christmas selling period."
Peter Lewis
Chairman
GAME Group Plc
Unaudited Condensed Consolidated Statement of Comprehensive Income
for the six months ended 31 July 2009
+---------------+------------------+-------+--+-----------+--+-----------+--+-------------+
| |Notes | | Six | | Restated | | Restated |
| | | | months | | Six | | Year |
| | | | ended | | months | | ended |
| | | | 31 July | | ended | | 31 January |
| | | | 2009 | | 31 July | | 2009 |
| | | | Unaudited | | 2008 | | Unaudited* |
| | | | | | Unaudited | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Revenue | 2 | | 690,753 | | 742,553 | | 1,968,604 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Cost of sales | | | 490,785 | | 542,386 | | 1,454,097 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Gross profit | | | 199,968 | | 200,167 | | 514,507 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Other operating expenses | 3 | | 186,934 | | 164,694 | | 390,214 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Operating profit before | | | 16,718 | | 38,518 | | 130,881 |
| non-recurring costs | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Non-recurring costs | 3 | | (3,684) | | (3,045) | | (6,588) |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Operating profit | | | 13,034 | | 35,473 | | 124,293 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Finance income | | | 133 | | 828 | | 1,805 |
| Finance costs | | | (2,393) | | (3,490) | | (8,732) |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Profit before taxation | | | 10,774 | | 32,811 | | 117,366 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Taxation | 4 | | 3,050 | | 9,903 | | 34,173 |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Profit for the period | | | 7,724 | | 22,908 | | 83,193 |
| attributable to equity holders | | | | | | | |
| of the parent | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Other comprehensive income: | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Exchange differences on | | | (590) | | 7,419 | | 17,550 |
| translating foreign operations | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Deferred income tax on | | | - | | - | | (442) |
| share-based payments | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Income tax on share-based | | | - | | - | | 1,789 |
| payments | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Other comprehensive income for | | | (590) | | 7,419 | | 18,897 |
| the period, net of tax | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Total comprehensive income for | | | 7,134 | | 30,327 | | 102,090 |
| the period attributable to | | | | | | | |
| equity holders of the parent | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+----------------------------------+-------+--+-----------+--+-----------+--+-------------+
| Earnings per | - basic | 6 | | 2.23p | | 6.63p | | 24.05p |
| share | | | | | | | | |
+---------------+------------------+-------+--+-----------+--+-----------+--+-------------+
| | - diluted | 6 | | 2.23p | | 6.61p | | 23.97p |
+---------------+------------------+-------+--+-----------+--+-----------+--+-------------+
| | | | | | | | |
+---------------+------------------+-------+--+-----------+--+-----------+--+-------------+
* The 31 January 2009 comparative period is based on the audited financial
statements for the year end as amended for a prior year adjustment due to the
adoption of IFRIC 13.
GAME Group Plc
Unaudited Condensed Consolidated Balance Sheet
at 31 July 2009
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | | | Restated | | Restated |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | As at | | As at | | As at |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 31 July | | 31 July | | 31 |
| | | | | | | January |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 2009 | | 2008 | | 2009 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | Notes | Unaudited | | Unaudited | | Unaudited* |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Non current assets | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Property, plant and equipment | 7 | 162,203 | | 144,928 | | 165,609 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Intangible assets | 8 | 181,422 | | 175,566 | | 182,267 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Deferred tax asset | | 2,738 | | - | | 2,738 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 346,363 | | 320,494 | | 350,614 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Current assets | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Inventories | | 166,498 | | 184,045 | | 181,965 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Trade and other receivables | 9 | 55,153 | | 61,825 | | 55,465 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Cash and cash equivalents | | 57,768 | | 62,647 | | 139,614 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 279,419 | | 308,517 | | 377,044 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Total assets | | 625,782 | | 629,011 | | 727,658 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Current liabilities | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Trade and other payables | 10 | 192,416 | | 265,340 | | 349,182 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Current portion of long-term | 11 | 104,328 | | 63,439 | | 26,325 |
| borrowings | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Leasehold property incentives | | 1,357 | | 713 | | 904 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Corporation tax liabilities | | 6,881 | | 14,030 | | 26,037 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 304,982 | | 343,522 | | 402,448 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Non current liabilities | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Long-term borrowings | 11 | 33,626 | | 57,030 | | 31,847 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Leasehold property incentives | | 7,614 | | 7,094 | | 8,328 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Deferred tax liabilities | | - | | 1,929 | | - |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | 41,240 | | 66,053 | | 40,175 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Total liabilities | | 346,222 | | 409,575 | | 442,623 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Net assets | | 279,560 | | 219,436 | | 285,035 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Equity attributable to equity | | | | | | |
| holders of the parent | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Share capital | 13 | 17,332 | | 17,314 | | 17,316 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Share premium account | 14 | 46,644 | | 46,435 | | 46,462 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Capital redemption reserve | 15 | 2,248 | | 2,249 | | 2,248 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Shares held in Trust | 15 | (3,168) | | (5,315) | | (6,451) |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Merger reserve | 15 | 76,907 | | 76,907 | | 76,907 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Foreign exchange reserve | 15 | 22,864 | | 13,323 | | 23,454 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Retained earnings | 15 | 116,733 | | 68,523 | | 125,099 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| Total Equity | | 279,560 | | 219,436 | | 285,035 |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+--+-----------+--+------------+
* The 31 January 2009 comparative period is based on the audited financial
statements for the year end as amended for a prior year adjustment due to the
adoption of IFRIC 13.
Approved and authorised for issue by the Board on 23 September 2009
Ben White
Director
GAME Group Plc
Unaudited Condensed Consolidated Statement of Cash Flows
for the six months ended 31 July 2009
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | Restated | | Restated |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | Six | | Six | | Year |
| | | months | | months | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | ended | | ended | | ended |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | 31 July | | 31 July | | 31 January |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | 2009 | | 2008 | | 2009 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | Notes | Unaudited | | Unaudited | | Unaudited* |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Operating profit | | 13,034 | | 35,473 | | 124,293 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Equity-settled share-based payment | | 1,296 | | 828 | | 1,968 |
| expense | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Depreciation and amortisation | | 14,335 | | 12,632 | | 28,901 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Loss/(profit) on disposal of | | 1,018 | | (212) | | 146 |
| non-current assets | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Market value movement on financial | | 205 | | 205 | | 211 |
| instrument | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | 29,888 | | 48,926 | | 155,519 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Decrease/(increase) in trade and | | 312 | | (7,980) | | 212 |
| other receivables | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Decrease/(increase) in inventories | | 15,467 | | (38,806) | | (30,293) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| (Decrease)/increase in trade and | | (154,959) | | (51,428) | | 28,573 |
| other payables | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| (Decrease)/increase in leasehold | | (261) | | 547 | | 1,573 |
| incentives | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash generated from operations | | (109,553) | | (48,741) | | 155,584 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Finance costs paid | | (2,393) | | (3,490) | | (8,732) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Corporation tax paid | | (21,749) | | (11,735) | | (28,844) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Net cash from operating activities | | (133,695) | | (63,966) | | 118,008 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Acquisitions | | - | | (1,595) | | (6,804) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Purchase of property, plant and | | (11,863) | | (20,475) | | (48,727) |
| equipment | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Purchase of intangible assets | | (2,753) | | (2,605) | | (4,718) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Proceeds from sale of equipment | | 455 | | 455 | | 1,128 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Finance income received | | 133 | | 828 | | 1,805 |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Net cash used in investing | | (14,028) | | (23,392) | | (57,316) |
| activities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Proceeds from issue of share | | 198 | | 1,710 | | 1,740 |
| capital | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Purchase of own shares | | - | | (1,241) | | (1,241) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Shares purchased for Trust | | (1,254) | | (2,692) | | (3,828) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Payment of Term Loan | | (55,000) | | - | | (25,000) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Proceeds from Term Loan | | 50,000 | | - | | - |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Net receipt/(payment) of other | | 85,068 | | 25,124 | | (13,765) |
| long-term borrowings | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Payment of finance lease | | (286) | | (503) | | (393) |
| liabilities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Dividends paid | | (12,849) | | (10,292) | | (16,490) |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Net cash used in financing | | 65,877 | | 12,106 | | (58,977) |
| activities | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Net (decrease)/increase in cash and | | (81,846) | | (75,252) | | 1,715 |
| cash equivalents | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash and cash equivalents at | | 139,614 | | 137,899 | | 137,899 |
| beginning of period | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
| Cash and cash equivalents at end of | 12 | 57,768 | | 62,647 | | 139,614 |
| period | | | | | | |
+-------------------------------------+-------+-----------+---+-----------+--+------------+
* The 31 January 2009 comparative period is based on the audited financial
statements for the year end as amended for a prior year adjustment due to the
adoption of IFRIC 13.
Notes to the interim results
+----------+----------+
| 1 | General |
+----------+----------+
The GAME Group plc is a company incorporated, domiciled and registered in
England and Wales and is listed on the London Stock Exchange. The address of its
registered office is Unity House, Telford Road, Basingstoke, RG21 6YJ.
Basis of preparation
The financial information presented in this Interim Report has been prepared in
accordance with the accounting policies the Group expects to be applicable at 31
January 2010. The Interim Report has been prepared in accordance with those IFRS
and IFRIC interpretations issued and effective as at the time of preparing the
statement, and with the Disclosure and Transparency Rules of the Financial
Services Authority and with IAS 34, Interim Financial Reporting, as adopted by
the European Union. In line with this standard, the financial statements are
referred to as condensed.
Accounting policies
The accounting policies used in preparing the Interim Report are as set out in
the statutory accounts for the year ended 31 January 2009. Other than noted
below, there have been no changes in accounting policies and accounting
estimates.
Estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
Significant items subject to such assumptions and estimates include the useful
lives of assets, the measurement and recognition of provisions, the recognition
of deferred tax assets and liabilities for potential corporation tax. The most
critical accounting policies in determining the financial condition and results
of the Group are those requiring the greatest degree of subjective or complex
judgements. These relate to inventory valuation; lease costs; the valuation of
goodwill and acquired intangible assets; share-based payments and taxation. The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
Notes to the interim results
+----------+-------------+
| 1 | General |
| | (continued) |
+----------+-------------+
Adoption of new and revised Standards
The Directors have chosen to early adopt IFRS 3 "Business Combinations
amendment" which is effective for financial statements commencing after 1 July
2009 although this interpretation is not yet endorsed by the EU. The impact of
the adoption of this standard has not had a material impact on the results, cash
flows or financial position of the Group or the Company.
Changes in accounting policies
In the current financial year, the Group has
adopted IAS 1 "Presentation of Financial Statements" (Revised), IFRS 8
"Operating Segments", amendment to IFRS 2 "Share-based payments: vesting
conditions and cancellations" and IFRIC 13 "Customer Loyalty Programmes".
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to
present a Statement of Changes in Equity as a primary statement and introduces
the possibility of either a single Statement of Comprehensive Income (combining
the Income Statement and a Statement of Comprehensive Income) or to retain the
Income Statement with a supplementary Statement of Comprehensive Income. The
Directors have chosen the first option. As this standard is concerned with
presentation only it does not have any impact on the results or net assets of
the Group.
IFRS 8 Operating Segments requires operating segments to be identified on the
basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision-maker. The chief operating
decision-maker has been identified as the Board of Directors. By contrast IAS
14 "Segmental Reporting" required business and geographical segments to be
identified on a risks and rewards approach. The effect of applying IFRS 8 is to
restate the 08/09 Comparatives according to the operating segments, UK & Ireland
Stores, International Stores, Global Online.The operating segments are reported
in a manner consistent with the internal reporting provided to the Board of
Directors. The online segment is now reported separately, as the Board of
Directors consider this segment to be of growing importance.
Amendment to IFRS 2 "Share-based payments: vesting conditions and cancellations"
results in an immediate acceleration of the IFRS 2 expense that would otherwise
have been recognised in future periods should an employee decide to stop
contributing to the savings plan as well as in a potential revision to the fair
value of the awards granted to factor in the probability of employees
withdrawing from such a plan. Management has concluded that so far there has
been no impact on the results of the Group as a result of this amendment.
IFRIC 13 "Customer Loyalty Programmes" requires the deferral of revenue for the
fair value of Loyalty Card points until these points are redeemed. Previously
only the estimated cost of these points was accrued with the associated charge
being recognised in cost of sales. The effect of this change is to decrease
profit in the period by GBP0.3million (GBP0.5million reduction in profit for the
08/09 Interim period and GBP2.2m reduction in profit for the 08/09 year
end). Additionally, the effect of this change has been to reduce the retained
earnings at 1 February 2008 by GBP3.1million.
The table set out below demonstrates the impact of this upon Operating Profit to
show the re-statement to the figures previously disclosed.
+----------------------+---------+---------+---------+
| | Six | Six | Year |
| | months | months | ended |
| | ended | ended | 31 |
| | 31 | 31 |January |
| | July | July | 2009 |
| | 2009 | 2008 |GBP'000 |
| |GBP'000 |GBP'000 | |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Operating profit | 17,038 | 39,016 |133,128 |
| before | | | |
| non- recurring | | | |
| costs and IFRIC 13 | | | |
+----------------------+---------+---------+---------+
| IFRIC 13 impact | (320) | (498) |(2,247) |
+----------------------+---------+---------+---------+
| Operating profit | 16,718 | 38,518 |130,881 |
| before non-recurring | | | |
| costs | | | |
+----------------------+---------+---------+---------+
+----------+-------------+
| 1 | General |
| | (continued) |
+----------+-------------+
Standards and Interpretations in issue not yet adopted
The International Accounting Standards Board and the International Financial
Reporting Interpretations Committee have issued the following standards and
interpretations to be applied to financial statements with periods commencing on
or after the following dates:
+-----------------------------------------------------+--------------------+
| International Accounting Standards (IAS/IFRS) | Effective Date |
+-----------------------------------------------------+--------------------+
| IFRS* Improving Disclosures about Financial | 01/01/2009 |
| Instruments amendment | |
+-----------------------------------------------------+--------------------+
| IFRS 3* Business Combinations amendment and | 01/07/2009 |
| complementary | |
| amendments to IAS 27 Consolidated and Separate | |
| Financial Statements | |
+-----------------------------------------------------+--------------------+
| IAS 39* Financial Instruments: Recognition and | 01/07/2009 |
| measurement: Eligible Hedged Items amendment | |
+-----------------------------------------------------+--------------------+
| IFRS 5 Non-current assets held for sale and | 01/01/2010 |
| discontinued operations | |
| amendment | |
+-----------------------------------------------------+--------------------+
| IAS 7 Statement of cash flows amendment | 01/01/2010 |
+-----------------------------------------------------+--------------------+
| IAS 18 Revenue amendment | 01/01/2010 |
+-----------------------------------------------------+--------------------+
| IAS 36 Impairment of assets amendment | 01/01/2010 |
+-----------------------------------------------------+--------------------+
| IAS 38 Intangible assets amendment | 01/01/2010 |
+-----------------------------------------------------+--------------------+
| IFRS 1* Additional exemptions for First Time | 01/01/2010 |
| Adopters amendments | |
+-----------------------------------------------------+--------------------+
| IFRS 2* Group Cash-settled Share-based payment | 01/01/2010 |
| Transactions amendments | |
+-----------------------------------------------------+--------------------+
| | |
+-----------------------------------------------------+--------------------+
| | |
+-----------------------------------------------------+--------------------+
| Improvements to IFRSs* | Various |
| | |
+-----------------------------------------------------+--------------------+
| | |
+-----------------------------------------------------+--------------------+
| International Financial Reporting Interpretations | Effective Date |
| Committee (IFRIC) | |
+-----------------------------------------------------+--------------------+
| IFRIC 16* Hedges of a Net Investment in a Foreign | 01/01/2009 |
| Operation | |
+-----------------------------------------------------+--------------------+
| IFRIC 9* and IAS 39* Embeded derivatives amendments | 30/06/2009 |
+-----------------------------------------------------+--------------------+
| IFRIC 15* Agreements for the Construction of Real | 01/01/2009 |
| Estate | |
+-----------------------------------------------------+--------------------+
| IFRIC 17* Distributions of Non-cash assets to | 01/07/2009 |
| owners | |
+-----------------------------------------------------+--------------------+
| IFRIC 18* Transfers of assets from customers | 01/07/2009 |
+-----------------------------------------------------+--------------------+
*These standards and interpretations are not endorsed by the EU at present.
The Directors do not anticipate that the adoption of these standards and
interpretations will have a material impact on the Group's financial statements
in the period of initial application.
Notes to the interim results
+----------+-----------+
| 2 | Revenue |
| | and |
| | operating |
| | profit |
+----------+-----------+
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 of distribution to customer. Management consider the reportable
operating segments in accordance with IFRS 8 to be split between the UK and
Ireland Stores, International Stores, and Global Online.
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| | United | Inter- | Global | Total | United | Inter- | Global | Total |
| | Kingdom | national | Online | Six | Kingdom | national | Online | Six |
| | & | Stores | Six | months | & | Stores | Six | months |
| | Ireland | Six | months | ended | Ireland | Six | months | ended |
| | Stores | months | Ended | 31 | Stores | months | ended | 31 |
| | Six | Ended | 31 | July | Six | ended | 31 | July |
| | months | 31 July | July | 2009 | Months | 31 July | July | 2008 |
| | ended | 2009 | 2009 | | Ended | 2008 | 2008 | |
| | 31 July | | | | 31 | | | |
| | 2009 | | | | July | | | |
| | | | | | 2008 | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Revenue | 428,307 | 229,236 | 33,210 | 690,753 | 499,318 | 213,600 | 29,635 | 742,553 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Cost of sales | 293,332 | 170,395 | 27,058 | 490,785 | 360,640 | 158,697 | 23,049 | 542,386 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Gross profit | 134,975 | 58,841 | 6,152 | 199,968 | 138,678 | 54,903 | 6,586 | 200,167 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Other operating | 109,945 | 68,738 | 4,567 | 183,250 | 104,785 | 52,046 | 4,818 | 161,649 |
| expenses | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Operating | 25,030 | (9,897) | 1,585 | 16,718 | 33,893 | 2,857 | 1,768 | 38,518 |
| profit/(loss) | | | | | | | | |
| before | | | | | | | | |
| non-recurring | | | | | | | | |
| costs | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Non-recurring | 3,684 | - | - | 3,684 | 3,045 | - | - | 3,045 |
| costs | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Operating | 21,346 | (9,897) | 1,585 | 13,034 | 30,848 | 2,857 | 1,768 | 35,473 |
| profit/(loss) | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Goodwill and | 153,680 | 27,026 | 716 | 181,422 | 152,928 | 21,904 | 734 | 175,566 |
| other intangibles | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Other assets | 199,382 | 232,405 | 12,573 | 444,360 | 248,558 | 199,803 | 5,084 | 453,445 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Assets | 353,062 | 259,431 | 13,289 | 625,782 | 401,486 | 221,707 | 5,818 | 629,011 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Liabilities | 137,252 | 199,398 | 9,572 | 346,222 | 220,544 | 181,624 | 7,407 | 409,575 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Net assets | 215,810 | 60,033 | 3,717 | 279,560 | 180,942 | 40,083 | (1,589) | 219,436 |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Capital | 5,559 | 7,934 | 1,123 | 14,616 | 8,663 | 14,072 | 345 | 23,080 |
| expenditure | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
| Depreciation and | 7,345 | 5,974 | 1,016 | 14,335 | 7,604 | 4,721 | 307 | 12,632 |
| amortisation | | | | | | | | |
+-------------------+---------+----------+---------+---------+---------+----------+---------+---------+
Notes to the interim results
+----------+-------------+
| 2 | Revenue |
| | and |
| | operating |
| | profit |
| | (continued) |
+----------+-------------+
+--------------------+-----------+----------+---------+-----------+
| | United | Inter- | Global | Total |
| | Kingdom |national | Online | Year |
| | & | Stores | Year | ended |
| | Ireland | Year | ended | 31 |
| | Stores | ended | 31 | January |
| | Year | 31 |January | 2009 |
| | ended | January | 2009 | |
| | 31 | 2009 | | |
| | January | | | |
| | 2009 | | | |
+--------------------+-----------+----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+-----------+----------+---------+-----------+
| | | | | |
+--------------------+-----------+----------+---------+-----------+
| Revenue | 1,286,642 | 575,172 | 106,790 | 1,968,604 |
+--------------------+-----------+----------+---------+-----------+
| Cost of sales | 932,434 | 434,914 | 86,749 | 1,454,097 |
+--------------------+-----------+----------+---------+-----------+
| | | | | |
+--------------------+-----------+----------+---------+-----------+
| Gross profit | 354,208 | 140,258 | 20,041 | 514,507 |
+--------------------+-----------+----------+---------+-----------+
| Other operating | 247,627 | 122,037 | 13,962 | 383,626 |
| expenses | | | | |
+--------------------+-----------+----------+---------+-----------+
| Operating profit | 106,581 | 18,221 | 6,079 | 130,881 |
| before | | | | |
| non-recurring | | | | |
| costs | | | | |
+--------------------+-----------+----------+---------+-----------+
| Non-recurring | 6,588 | - | - | 6,588 |
| costs | | | | |
+--------------------+-----------+----------+---------+-----------+
| Operating profit | 99,993 | 18,221 | 6,079 | 124,293 |
+--------------------+-----------+----------+---------+-----------+
| | | | | |
+--------------------+-----------+----------+---------+-----------+
| Goodwill and other | 154,362 | 27,134 | 771 | 182,267 |
| intangibles | | | | |
+--------------------+-----------+----------+---------+-----------+
| Other assets | 279,721 | 258,154 | 7,516 | 545,391 |
+--------------------+-----------+----------+---------+-----------+
| Assets | 434,083 | 285,288 | 8,287 | 727,658 |
+--------------------+-----------+----------+---------+-----------+
| Liabilities | 271,113 | 164,674 | 6,836 | 442,623 |
+--------------------+-----------+----------+---------+-----------+
| Net assets | 162,970 | 120,614 | 1,451 | 285,035 |
+--------------------+-----------+----------+---------+-----------+
| Capital | 20,152 | 28,805 | 4,488 | 53,445 |
| expenditure | | | | |
+--------------------+-----------+----------+---------+-----------+
| Depreciation and | 15,451 | 12,059 | 1,391 | 28,901 |
| amortisation | | | | |
+--------------------+-----------+----------+---------+-----------+
Notes to the interim results
+----------+-------------+
| 2 | Revenue |
| | and |
| | operating |
| | profit |
| | (continued) |
+----------+-------------+
Information about products and services
+-----------------------+--------------+-----------------+-----------------+-------------+
| | Six months | | Six months | |
| | ended | | ended | |
| | 31 July 2009 | | 31 July 2008 | |
+ +--------------+-----------------+-----------------+-------------+
| | GBP'000 | | GBP'000 | |
+-----------------------+-----------------------+--------------+-----------------+-----------------+
| | Total | % of Total | Total | % of Total |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Revenue | | | | |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Hardware | 146,657 | 21.2 | 187,910 | 25.3 |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Software | 282,829 | 40.9 | 318,542 | 42.9 |
+-----------------------+--------------+-----------------+-----------------+-------------+
| New hardware and | 429,486 | 62.1 | 506,452 | 68.2 |
| software | | | | |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Preowned | 177,268 | 25.7 | 157,844 | 21.3 |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Other | 83,999 | 12.2 | 78,257 | 10.5 |
+-----------------------+--------------+-----------------+-----------------+-------------+
| | | | | |
+-----------------------+--------------+-----------------+-----------------+-------------+
| Total | 690,753 | 100.0 | 742,553 | 100.0 |
+-----------------------+--------------+-----------------+-----------------+-------------+
| | | | | |
+-----------------------+--------------+-----------------+-----------------+-------------+
+-----------------------+---------------+-----------------+-----------------+------------+
| | Six months | | Six months | |
| | ended | | ended | |
| | 31 July 2009 | | 31 July 2008 | |
+ +---------------+-----------------+-----------------+------------+
| | GBP'000 | | GBP'000 | |
+-----------------------+-----------------------+---------------+-----------------+-----------------+
| | Total | % of Total | Total | % of Total |
| | | | | |
+-----------------------+---------------+-----------------+-----------------+------------+
| Gross Margin | | | | |
+-----------------------+---------------+-----------------+-----------------+------------+
| New hardware and | 102,459 | 51.2 | 120,383 | 60.1 |
| software | | | | |
+-----------------------+---------------+-----------------+-----------------+------------+
| Preowned | 72,664 | 36.3 | 60,110 | 30.0 |
+-----------------------+---------------+-----------------+-----------------+------------+
| Other | 24,845 | 12.5 | 19,674 | 9.9 |
+-----------------------+---------------+-----------------+-----------------+------------+
| | | | | |
+-----------------------+---------------+-----------------+-----------------+------------+
| Total | 199,968 | 100.0 | 200,167 | 100.0 |
+-----------------------+---------------+-----------------+-----------------+------------+
| | | | | |
+-----------------------+---------------+-----------------+-----------------+------------+
+---------------------------+--------+---------------+-----------------+------------+
| | | Six months | | Six months |
| | | ended | | ended |
| | | 31 July 2009 | | 31 July |
| | | | | 2008 |
+---------------------------+--------+---------------+-----------------+------------+
| | | % | | % |
+---------------------------+--------+---------------+-----------------+------------+
| | | Total | | Total |
+---------------------------+--------+---------------+-----------------+------------+
| Gross Margin | | | | |
+---------------------------+--------+---------------+-----------------+------------+
| New hardware and software | | 23.9 | | 23.8 |
+---------------------------+--------+---------------+-----------------+------------+
| Preowned | | 41.0 | | 38.1 |
+---------------------------+--------+---------------+-----------------+------------+
| Other | | 29.6 | | 25.1 |
+---------------------------+--------+---------------+-----------------+------------+
| | | | | |
+---------------------------+--------+---------------+-----------------+------------+
| Total Group | | 28.9 | | 27.0 |
+---------------------------+--------+---------------+-----------------+------------+
| | | | | |
+---------------------------+--------+---------------+-----------------+------------+
Notes to the interim results
+----------+-------------+
| 2 | Revenue |
| | and |
| | operating |
| | profit |
| | (continued) |
+----------+-------------+
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | Six | | Six | | Year |
| | | | months | | months | | ended |
| | | | ended | | ended | | 31 January |
| | | | 31 July | | 31 July | | 2009 |
| | | | 2009 | | 2008 | | Audited |
| | | | Unaudited | | Unaudited | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Revenue by territory | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| United Kingdom and Ireland | | | 428,307 | | 499,318 | | 1,286,642 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| France | | | 76,938 | | 78,302 | | 194,855 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Iberia | | | 105,836 | | 97,081 | | 260,389 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Scandinavia | | | 19,501 | | 19,713 | | 52,631 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Australia | | | 24,460 | | 18,504 | | 62,751 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Czech Republic | | | 2,501 | | - | | 4,546 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Total Stores | | | 657,543 | | 712,918 | | 1,861,814 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Total Online | | | 33,210 | | 29,635 | | 106,790 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Total Turnover | | | 690,753 | | 742,553 | | 1,968,604 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Stores by territory | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| United Kingdom and Ireland | | | 698 | | 669 | | 696 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| France | | | 198 | | 187 | | 192 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Iberia | | | 270 | | 241 | | 258 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Scandinavia | | | 67 | | 62 | | 66 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Australia | | | 108 | | 72 | | 101 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Czech Republic | | | 21 | | - | | 22 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | 1,362 | | 1,231 | | 1,335 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Franchises | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| France | | | - | | 2 | | 1 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Iberia | | | 5 | | 10 | | 5 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Australia | | | 1 | | 2 | | 1 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | 6 | | 14 | | 7 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Trading square footage by | | | | | | | |
| territory | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| United Kingdom and Ireland | | | 812,325 | | 781,294 | | 808,322 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| France | | | 181,621 | | 173,548 | | 177,729 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Iberia | | | 225,690 | | 199,921 | | 218,395 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Scandinavia | | | 63,906 | | 59,729 | | 62,367 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Australia | | | 121,153 | | 81,566 | | 113,417 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Czech Republic | | | 12,342 | | - | | 12,611 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | 1,417,037 | | 1,296,058 | | 1,392,841 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
+----------+-----------+
| 3 | Other |
| | operating |
| | expenses |
+----------+-----------+
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | Six | | Six | | Year |
| | | | months | | months | | ended |
| | | | ended | | ended | | 31 January |
| | | | 31 July | | 31 July | | 2009 |
| | | | 2009 | | 2008 | | Audited |
| | | | Unaudited | | Unaudited | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | | | | | |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Selling and distribution | | | 156,940 | | 137,768 | | 304,428 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| Administrative expenses | | | 29,994 | | 26,926 | | 85,786 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
| | | | 186,934 | | 164,694 | | 390,214 |
+----------------------------+------+------+-----------+------+-----------+----+------------+
In the current year administrative expenses include non-recurring costs of
GBP3,684,383 (2008 interim: GBP3,044,635; full year: GBP6,587,603) in relation
to integration fees following the acquisition of Gamestation.
Notes to the interim results
+----------+----------+
| 4 | Taxation |
+----------+----------+
The UK corporation tax charge has been included at an underlying corporation tax
rate in line with the previous year.
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | Six | | Six | | Year |
| | | | months | | months | | Ended |
| | | | ended | | ended | | 31 January |
| | | | 31 July | | 31 July | | 2009 |
| | | | 2009 | | 2008 | | Audited |
| | | | Unaudited | | Unaudited | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Current tax: | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| UK corporation tax | | | 2,344 | | 8,701 | | 34,235 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Adjustments in respect of prior | | | - | | - | | 190 |
| periods | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Overseas tax payable | | | 706 | | 1,202 | | 4,903 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Total current tax | | | 3,050 | | 9,903 | | 39,328 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Deferred tax: | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Current year movement | | | - | | - | | (5,194) |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| Prior year movement | | | - | | - | | 39 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | | | | | |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
| | | | 3,050 | | 9,903 | | 34,173 |
+-----------------------------------+--+---+-----------+------+-----------+---+------------+
Disclosure of tax effects relating to each component of other comprehensive
income
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
| | | | Six | | | | Six | |
| | | | months | | | | months | |
| | | | ended 31 | | | | ended 31 | |
| | | | July 2009 | | | | July 2008 | |
| | | | Unaudited | | | | Unaudited | |
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
| | | Before- | Tax | Net-of-tax | | Before-tax | Tax | Net-of-tax |
| | | tax | (expense) | amount | | amount | (expense) | amount |
| | | amount | benefit | | | | benefit | |
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
| Exchange differences | | (590) | - | (590) | | 7,419 | - | 7,419 |
| on | | | | | | | | |
| translating foreign | | | | | | | | |
| operations | | | | | | | | |
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
| Gains on property | | - | - | - | | - | - | - |
| revaluation | | | | | | | | |
| | | | | | | | | |
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
| Other comprehensive | | (590) | - | (590) | | 7,419 | - | 7,419 |
| income | | | | | | | | |
+------------------------+-+---------+-----------+------------+-+------------+-----------+------------+
+----------+-----------+
| 5 | Dividends |
+----------+-----------+
+---------------------------------------------+-----------+------+-----------+----+------------+
| | Six | | Six | | Year |
| | months | | months | | ended |
| | ended | | ended | | 31 January |
| | 31 July | | 31 July | | 2009 |
| | 2009 | | 2008 | | Audited |
| | Unaudited | | Unaudited | | |
+---------------------------------------------+-----------+------+-----------+----+------------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------------+-----------+------+-----------+----+------------+
| Ordinary dividends | | | | | |
+---------------------------------------------+-----------+------+-----------+----+------------+
| Final Paid | 12,849 | | 10,292 | | 10,292 |
+---------------------------------------------+-----------+------+-----------+----+------------+
| Interim Paid | - | | - | | 6,198 |
+---------------------------------------------+-----------+------+-----------+----+------------+
| | 12,849 | | 10,292 | | 16,490 |
+---------------------------------------------+-----------+------+-----------+----+------------+
The interim dividend in relation to the period ended 31 July 2009 was declared
on 23 September 2009 and is payable on 19 November 2009 to shareholders on the
register on 23 October 2009. This dividend is therefore not included above.
Notes to the interim results
+----------+----------+
| 6 | Earnings |
| | per |
| | share |
+----------+----------+
The calculation of earnings per share for the six months ended 31 July 2009 is
based on the profit after taxation of GBP7,724,000 (2008 interim: GBP22,908,000;
full year: GBP83,193,000). The calculation of the earnings per share before
non-recurring costs is based on a profit of GBP11,408,000 (2008 interim:
GBP25,953,000; full year: GBP89,781,000). The calculation of basic earnings per
share is based on a weighted average number of shares in issue during the period
of 346,369,840 (2008 interim: 345,472,823; full year: 345,895,311). The
calculation of diluted earnings per share is based on a weighted average number
of shares in issue during the period of 347,113,425 (2008 interim: 346,734,921;
full year: 347,024,028).
Reconciliation of denominators used for basic and diluted loss per share
calculations:
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| | | | Basic | |Effect of | | Diluted |
| | | | | | share | | |
| | | | | | options | | |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| | | | Number | | Number | | Number |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| | | | | | | | |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| 31 July 2009 | | | 346,369,840 | | 743,585 | | 347,113,425 |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| 31 July 2008 | | | 345,472,823 | | 1,262,098 | | 346,734,921 |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
| 31 January 2009 | | | 345,895,311 | | 1,128,717 | | 347,024,028 |
+--------------------------+------+--+-------------+--+-----------+--+-------------+
There are no anti-dilutive share options in the current or prior periods.
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | Pence | | Pence | | Pence |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| Basic earnings per share | | | 2.23 | | 6.63 | | 24.05 |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| Non-recurring costs | | | 1.06 | | 0.88 | | 1.91 |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
| Basic earnings per share | | | 3.29 | | 7.51 | | 25.96 |
| before non-recurring | | | | | | | |
| costs | | | | | | | |
+--------------------------+------+--+-----------+--+-----------+--+-----------+
Notes to the interim results
+----------+-----------+
| 7 | Property, |
| | plant and |
| | equipment |
+----------+-----------+
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Cost | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance brought forward | | | 279,744 | | 219,236 | | 219,236 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Additions | | | 11,863 | | 20,475 | | 48,727 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Acquisitions | | | - | | 149 | | 606 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Disposals | | | (2,725) | | (1,016) | | (4,677) |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Foreign exchange | | | (3,303) | | 5,936 | | 15,852 |
| adjustment | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance carried forward | | | 285,579 | | 244,780 | | 279,744 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Depreciation | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance brought forward | | | 114,135 | | 88,574 | | 88,574 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Charge for the period | | | 11,229 | | 10,749 | | 25,264 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Acquisitions | | | - | | - | | 163 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Disposals | | | (1,130) | | (854) | | (3,509) |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Foreign exchange | | | (858) | | 1,383 | | 3,643 |
| adjustment | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance carried forward | | | 123,376 | | 99,852 | | 114,135 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
| Carrying amount | | | 162,203 | | 144,928 | | 165,609 |
+---------------------------+------+--+-----------+--+-----------+--+-----------+
+----------+------------+
| 8 | Intangible |
| | fixed |
| | assets |
+----------+------------+
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Cost | | | | | | | |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance brought forward | | | 192,436 | | 179,080 | | 179,080 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Acquisitions | | | - | | 1,211 | | 6,542 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Additions | | | 2,753 | | 2,605 | | 4,764 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Foreign exchange adjustment | | | (626) | | 958 | | 2,157 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Disposals | | | (281) | | (102) | | (107) |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance carried forward | | | 194,282 | | 183,752 | | 192,436 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Amortisation | | | | | | | |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance brought forward | | | 10,169 | | 6,209 | | 6,209 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Acquisitions | | | - | | - | | 73 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Charge for the period | | | 3,106 | | 1,883 | | 3,637 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Foreign exchange adjustment | | | (13) | | 115 | | 250 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Disposals | | | (402) | | (21) | | - |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Balance carried forward | | | 12,860 | | 8,186 | | 10,169 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
| Carrying amount | | | 181,422 | | 175,566 | | 182,267 |
+------------------------------+------+--+-----------+--+-----------+--+-----------+
Notes to the interim results
+----------+-------------+
| 9 | Trade |
| | and |
| | other |
| | receivables |
+----------+-------------+
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Amounts falling due within one | | | | | | | |
| year: | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Trade receivables | | | 5,929 | | 10,739 | | 16,197 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Other receivables | | | 13,712 | | 16,205 | | 22,066 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| VAT recoverable | | | - | | 804 | | 64 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Total trade and other | | | 19,641 | | 27,748 | | 38,327 |
| receivables | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Prepayments and accrued income | | | 35,512 | | 34,077 | | 17,138 |
| | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | 55,153 | | 61,825 | | 55,465 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
+----------+----------+
| 10 | Trade |
| | and |
| | other |
| | payables |
+----------+----------+
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | As at | | Restated | | Restated |
| | | | 31 July | | As at | | As at |
| | | | 2009 | | 31 July | | 31 |
| | | | Unaudited | | 2008 | | January |
| | | | | | Unaudited | | 2009 |
| | | | | | | | Unaudited |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| Amounts falling due within | | | | | | | |
| one year: | | | | | | | |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| Trade payables | | | 135,521 | | 169,792 | | 216,156 |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| Other payables | | | 5,994 | | 10,814 | | 6,895 |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| Tax and social security | | | 3,215 | | 4,293 | | 8,930 |
| costs | | | | | | | |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| VAT payable | | | 11,099 | | 21,531 | | 45,359 |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| Accruals and deferred | | | 36,587 | | 58,910 | | 71,842 |
| income | | | | | | | |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | 192,416 | | 265,340 | | 349,182 |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+----------------------------+------+--+-----------+--+-----------+--+-----------+
Notes to the interim results
+----------+------------+
| 11 | Long-term |
| | borrowings |
+----------+------------+
+-------------------------------+--+--+-----------+--+-----------+----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | | | | | |
+-------------------------------+--+--+-----------+--+----------------------+--+-----------+
| Current portion | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| Bank loans | | | 103,866 | | 62,963 | | 25,948 |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| Obligations under finance | | | 462 | | 476 | | 377 |
| leases and hire purchase | | | | | | | |
| contracts | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | 104,328 | | 63,439 | | 26,325 |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| Non-current portion | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| Bank loans | | | 33,333 | | 56,573 | | 31,183 |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| Obligations under finance | | | 293 | | 457 | | 664 |
| leases and hire purchase | | | | | | | |
| contracts | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | 33,626 | | 57,030 | | 31,847 |
+-------------------------------+--+--+-----------+--+-----------+-------------+-----------+
| | | | | | | | |
+-------------------------------+--+--+-----------+--+-----------+----------+--+-----------+
+----------+--------------+
| 12 | Analysis |
| | of net |
| | (debt)/funds |
+----------+--------------+
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| Cash and cash equivalents | | | 57,768 | | 62,647 | | 139,614 |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| Net cash and cash | | | 57,768 | | 62,647 | | 139,614 |
| equivalents | | | | | | | |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| Current portion of | | | (104,328) | | (63,439) | | (26,325) |
| long-term borrowings | | | | | | | |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| Long-term borrowings | | | (33,626) | | (57,030) | | (31,847) |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
| Net (debt)/funds | | | (80,186) | | (57,822) | | 81,442 |
+-----------------------------+------+--+-----------+--+-----------+--+-----------+
Notes to the interim results
+----------+-----------+
| 13 | 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 | 17,332 | | 346,633,895 | | 17,314 | | 346,282,946 |
+--------------------------+---------+--+-------------+----+----------+--+-------------+
| | | | | | | | |
+--------------------------+---------+--+-------------+----+----------+--+-------------+
Shares issued
During the half year 310,238 shares (2008 interim: 2,938,380; full year:
3,479,091) were issued to employees exercising share options granted under
various option schemes. The total consideration received on the exercise of
these options was GBP198,068 (2008 interim: GBP1,732,846; full year:
GBP1,740,436).
Share purchased
During the half year no shares (2008 interim: 500,000; full year: 500,000) were
repurchased for cancellation by the Company.
Trust shares
During the half year 800,000 shares (2008 interim: 1,000,000; full year:
1,800,000) were purchased at a cost of GBP1,254,252 (2008 interim: GBP2,692,310;
full year: GBP3,828,470). These shares are to be used wholly and exclusively to
pay LTIP awards when they become due for payment.
+----------+----------+
| 14 | Share |
| | Premium |
| | account |
+----------+----------+
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | As at | | As at | | As at |
| | | | 31 July | | 31 July | | 31 |
| | | | 2009 | | 2008 | | January |
| | | | Unaudited | | Unaudited | | 2009 |
| | | | | | | | Audited |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Amount subscribed for share | | | | | | | |
| capital in excess of nominal | | | | | | | |
| value | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| At 1 February | | | 46,462 | | 44,848 | | 44,848 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| Arising on issue of shares | | | 182 | | 1,587 | | 1,614 |
| during the year (net of | | | | | | | |
| expenses) | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | 46,644 | | 46,435 | | 46,462 |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
| | | | | | | | |
+--------------------------------+--+--+-----------+--+-----------+--+-----------+
Notes to the interim results
+----------+-----------+
| 15 | Statement |
| | of |
| | changes |
| | in equity |
+----------+-----------+
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | Share | Share | Capital | Shares | Merger | Retained | Foreign | Total |
| | Capital | Premium | Redemption | held | Reserve | Earnings | Exchange | |
| | | | Reserve | in | | | Reserve | |
| | | | | Trust | | | | |
+-----------------------+ + + + + + + + +
| | | | | | | | | |
+-----------------------+ + + + + + + + +
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 1 February 2008 | 17,167 | 44,848 | 2,223 | (4,403) | 76,907 | 61,276 | 5,904 | 203,922 |
| before restatement | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Restatement | - | - | - | - | - | (3,126) | - | (3,126) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 1 February 2008 | 17,167 | 44,848 | 2,223 | (4,403) | 76,907 | 58,150 | 5,904 | 200,796 |
| after restatement | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Exchange differences | - | - | - | - | - | - | 7,419 | 7,419 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| on translation of | | | | | | | | |
| foreign | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| currency net | | | | | | | | |
| investment | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| in subsidiaries | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ___ | _____ | ______ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Net income recognised | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| directly in equity | - | - | - | - | - | - | 7,419 | 7,419 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Net income recognised | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| in income statement | - | - | - | - | - | 22,908 | - | 22,908 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ______ | ________ | ______ | _____ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Total recognised | | | | | | | | |
| income | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| and expense | - | - | - | - | - | 22,908 | 7,419 | 30,327 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Issue of shares | 123 | 1,587 | - | - | - | - | - | 1,710 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Purchase of shares | - | - | - | (2,692) | - | - | - | (2,692) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Exercise of options | - | - | - | 1,830 | - | (1,830) | - | - |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Dividends paid | - | - | - | - | - | (10,292) | - | (10,292) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Share based payments | - | - | - | - | - | 828 | - | 828 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Share buyback | (26) | - | 26 | - | - | (1,241) | - | (1,241) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Net settled options | 50 | - | - | (50) | - | - | - | - |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | ______ | _____ | _____ | ____ | ____ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 31 July 2008 | 17,314 | 46,435 | 2,249 | (5,315) | 76,907 | 68,523 | 13,323 | 219,436 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ______ | ____ | ______ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 1 February 2009 | 17,316 | 46,462 | 2,248 | (6,451) | 76,907 | 130,472 | 23,454 | 290,408 |
| before restatement | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Restatement | - | - | - | - | - | (5,373) | - | (5,373) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 1 February 2009 | 17,316 | 46,462 | 2,248 | (6,451) | 76,907 | 125,099 | 23,454 | 285,035 |
| after restatement | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Exchange differences | - | - | - | - | - | - | (590) | (590) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| on translation of | | | | | | | | |
| foreign | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| currency net | | | | | | | | |
| investment | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| in subsidiaries | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ___ | _____ | ______ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Net income recognised | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| directly in equity | - | - | - | - | - | - | (590) | (590) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Net income recognised | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| in income statement | - | - | - | - | - | 7,724 | - | 7,724 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ______ | ________ | ______ | _____ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Total recognised | | | | | | | | |
| income | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| and expense | - | - | - | - | - | 7,724 | (590) | 7,134 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Issue of shares | 16 | 182 | - | - | - | - | - | 198 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Purchase of shares | - | - | - | (1,254) | - | - | - | (1,254) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Exercise of options | - | - | - | 4,537 | - | (4,537) | - | - |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Dividends paid | - | - | - | - | - | (12,849) | - | (12,849) |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| Share based payments | - | - | - | - | - | 1,296 | - | 1,296 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | ______ | _____ | _____ | ____ | ____ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| At 31 July 2009 | 17,332 | 46,644 | 2,248 | (3,168) | 76,907 | 116,733 | 22,864 | 279,560 |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | _____ | ______ | _______ | ______ | ______ | ____ | ______ | ______ |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
| | | | | | | | | |
+-----------------------+---------+---------+------------+---------+---------+----------+----------+----------+
Notes to the interim results
+----------+--------------+
| 16 | Related |
| | party |
| | transactions |
+----------+--------------+
There were no related party transactions within the period.
+----------+----------+
| 17 | Risks |
+----------+----------+
Global Economic Conditions
There is a high degree of uncertainty in the global economy, with issues around
government and bank liquidity, business failures, and rising unemployment rates.
We recognise that all of these factors may have an impact on our customers'
willingness or ability to spend.
Our trading performance to date suggests that compared to some sectors of
retailing we are not being as significantly impacted by these wider economic
issues. We will continue to put forward compelling product offers to meet the
more value conscious demands of our consumers.
Technology
As with music and DVD entertainment, the opportunity exists for pc and video
games to be distributed digitally via the internet. Pc games which tend to have
smaller file sizes are available from a number of websites whereas video games
digital content is offered in a limited way via official format channels, e.g.
Microsoft's Xbox Live service.
As broadband technology improves there is a risk that more gamers start playing
their games online. This will reduce the number of people buying boxed product
from retailers such as ourselves.
Given the ever increasing size of pc and video games (up to 50Gb), the existing
broadband infrastructure in all of the countries in which we operate is not
currently sufficient to allow total online play. Additionally, we have
recognised the increasing prominence of eCommerce and digital downloading and we
have invested in state-of-the-art eCommerce websites.
Competition
The pc and video games market has become an increasingly attractive proposition
for retailers. We have seen new entrants to the market place, including
specialists, existing generalists and supermarkets and online players.
We believe that the specialist has all of the attributes to succeed in the pc
and video games market place. We measure our stores' performance against
specific KPIs to ensure our proposition is always appealing and relevant to
consumers.
Seasonality
The Group's business is seasonal with the key trading period being the Christmas
season. Turnover, operating profit and cash flow may be adversely impacted by
variations in demand during this period.
The Group works closely with suppliers to secure stock and implement high
profile preorder campaigns in advance of all major releases. The Group also
undertakes extensive marketing campaigns to drive consumer awareness, and flexes
headcount in store to maximise the sales potential.
Reputation
As a specialist retailer our customers demand that we stock the broadest range
of product. This means that we deal with a variety of video games, for example
age restricted products. Mis-selling such titles is illegal.
To mitigate any issues that may arise through the mis-selling of these games we
employ the very highest levels of training throughout our organisation.
Notes to the interim results
+----------+-----------+
| 18 | This |
| | Interim |
| | Report |
| | was |
| | approved |
| | by the |
| | Board of |
| | Directors |
| | on 23 |
| | September |
| | 2009 |
+----------+-----------+
The results for the six months ended 31 July 2009 are unaudited. The financial
information for the year ended 31 January 2009 does not constitute the full
statutory accounts for that period. The Annual Report and Financial Statements
for 31 January 2009 have been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Financial Statement for
the year ended 31 January 2009 was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under 237(2) or
237(3) of the Companies Act 1985.
Copies of this Interim Report are being posted to shareholders and are available
from the Company's office at Unity House, Telford Road, Basingstoke, Hampshire
RG21 6YJ.
Statement of Directors' Responsibilities
The Directors confirm, to the best of their knowledge and belief, that this
condensed set of financial statements has been prepared in accordance with IAS
34 as adopted by the European Union, and that the interim management report
herein includes a fair review of the information required by DTR 4.2.7 and DTR
4.2.8. The Directors of GAME Group plc are listed in the Company's 2009 Annual
Report and Accounts.
By order of the Board
Ben White
Director
23 September 2009
INDEPENDENT REVIEW REPORT TO THE GAME GROUP PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31 July
2009 which comprises the unaudited condensed consolidated statement of
comprehensive income, balance sheet, and statement of cash flows and the related
explanatory notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and has been approved
by the Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, "Interim Financial Reporting", as
adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting its responsibilities in respect to half-yearly
financial reporting in accordance with the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority and for no other purpose. No
person is entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose of our terms
of engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
other person or for any other purpose and we hereby expressly disclaim any and
all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity", issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 July 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34, as adopted by
the European Union, and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
Mr David Eagle (Senior Statutory Auditor)
For and on behalf of BDO Stoy Hayward LLP, Statutory Auditor
London
23 September 2009
DIRECTORS AND ADVISERS
Directors
Peter Lewis non-executive Chairman
Lisa Morgan chief executive
Ben White ACA group finance director
Terry Scicluna chief operating officer for the UK and Ireland
Christopher Bell senior non-executive director
Jean-Paul Giraud non-executive director
Ishbel Macpherson non-executive director
Dennis Woodside non-executive director
Secretary
Vivienne Hemming ACIS
Registered office
Unity House, Telford Road, Basingstoke, RG21 6YJ
Stockbrokers
Deutsche Bank AG London, Winchester House, 1 Great Winchester Street, London
EC2N 2NT
Oriel Securities Limited, 125 Wood Street, London EC2V 7AN
Principal Bankers
The Royal Bank of Scotland plc, Thames Valley Corporate Banking Centre, Abbey
Gardens, 4 Abbey Street, Reading RG1 3BA
Independent auditors
BDO Stoy Hayward LLP, 55 Baker Street, London, W1U 7EU
Registrars and transfer office
Capita Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield HD8
0GA
Corporate website
www.gamegroup.plc.uk
Registered number
875835
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAFNAADXNEFE
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