Interim Management Statement
December 08 2009 - 2:00AM
UK Regulatory
TIDMGMG
RNS Number : 7340D
Game Group PLC
08 December 2009
The GAME Group plc
8 December 2009
Interim Management Statement
The GAME Group plc ("GAME"), the leading European retailer of pc and video games
products, today issues its Interim Management Statement, relating to the period
to 5 December 2009.
Peter Lewis, the Chairman of GAME, said:
Trading Update
"For the 44 weeks to 5 December 2009, total Group sales were down by 10.8%. Like
for like (lfl) Group sales for the same period were down by 15.1%. In the UK and
Ireland, total sales were down by 14.3% and lfl sales were down by 16.6%. In our
International business, total sales and lfl sales were down by 2.0% and 11.5%,
respectively.
For the 18 weeks to 5 December 2009, total Group sales were down by 11.3%. Group
lfl sales for the same period were down by 13.9%. In the UK and Ireland, total
sales were down by 15.3% and lfl sales were down by 16.6%. In our International
business, total sales and lfl sales were down by 1.0% and 6.7%, respectively.
Recent console price cuts from Sony and Microsoft1 have increased demand, though
revenues from increased unit sales of these formats have not offset the
overall fall in hardware revenues. GAME has continued to outperform the market
by offering specialist service, compelling bundles and exclusives, including the
Call of Duty: Modern Warfare 2 Xbox 360 250GB pack, which was only available in
the UK from us.
Since the half year, there have been a number of major software releases
including Call of Duty: Modern Warfare 2 and FIFA 10, which both broke records
in their first week of launch. However, the exceptionally strong performance of
these titles was in part offset by softer than expected sales of some other
releases.
We have seen strong competition in all of the markets that we operate in. In the
UK, in particular, we have seen significant pricing activity from the
supermarkets. However, our overall year to date market share position has
improved due to the strength of our consumer proposition, including our trade-in
offers, loyalty card discounts, breadth of range and specialist staff. Our
preowned business has continued to perform well as it offers real value for our
customers, particularly in the current economic climate.
Store openings and capital expenditure
In line with our previous guidance we have opened 43 new stores since the half
year, and through normal portfolio management we have closed 5. We are operating
from 1,406 stores as we enter the key Christmas selling period (see table
below).
We continue to invest in the development of our online business. We have
launched three new consumer websites in Europe, taking the total to ten, and
expanded our UK websites with additional products, enhanced functionality and
improved customer services. We are the only UK entertainment retailer to offer a
download service for pc games, with nearly 700 games available.
We expect our full year capital expenditure to be in the region of GBP32m.
Outlook
Over the longer term, we believe the video games market will continue to trend
towards higher margin software and peripherals. GAME is well placed to benefit,
as increased choice and technical innovation encourages customers to visit the
specialist. As the market leader, we will continue to build our multi-channel
proposition and preowned-led value offer to best serve our customers' demands.
For the remainder of this financial year, the next eight weeks historically
represent around 25% of our annual turnover. There is a record installed base of
27.2m third generation consoles in the UK market (06/12/2008: 20.4m consoles)2.
All of the major releases are now available, supported by our biggest ever
Christmas campaign. There are further strong software titles scheduled for
release from January 2010, including Vancouver 2010 from Sega and Mass Effect 2
from EA. We are well positioned for this key trading period with unique product
promotions, unrivalled availability, and market leading trade-in and preowned
deals, all supported by our Reward Card loyalty programme.
Due to the ongoing strength of our preowned sales and mint software offers, we
reiterate our gross margin guidance for an increase of between 170 to 220 basis
points over the prior year. The synergies from the integration of Gamestation
and our strong cost disciplines will result in further savings in the cost base.
Consequently, while the wider economic conditions and prevailing video games
market trends lead us to approach the critical Christmas period cautiously, the
Board believes the Group is well positioned to deliver a solid outturn for the
year.
The Group will next report on 12 January 2010 when it will publish sales for the
Christmas trading period."
Notes:
Store portfolio:
+----------------+------------+----------+----------+
| | 5 December | 31 July | 31 |
| | 2009 | 2009 | January |
| | | | 2009 |
+----------------+------------+----------+----------+
| | | Number | Number |
| | Number | | |
+----------------+------------+----------+----------+
| Company | | | |
| owned | | | |
| and | | | |
| concessions | | | |
+----------------+------------+----------+----------+
| UK and | 701 | 698 | 696 |
| Ireland: | | | |
+----------------+------------+----------+----------+
| - GAME - | 392 | 392 | 391 |
| stores | | | |
+----------------+------------+----------+----------+
| - GAME - | 52 | 52 | 52 |
| concessions | | | |
+----------------+------------+----------+----------+
| - | 257 | 254 | 253 |
| Gamestation | | | |
+----------------+------------+----------+----------+
| | | | |
+----------------+------------+----------+----------+
| France | 199 | 198 | 192 |
+----------------+------------+----------+----------+
| Iberia | 285 | 270 | 258 |
+----------------+------------+----------+----------+
| Scandinavia | 68 | 67 | 66 |
+----------------+------------+----------+----------+
| Czech Republic | 30 | 21 | 22 |
+----------------+------------+----------+----------+
| Total | 582 | 556 | 538 |
| Continental | | | |
| Europe | | | |
+----------------+------------+----------+----------+
| Australia | 117 | 108 | 101 |
+----------------+------------+----------+----------+
| Total | 699 | 664 | 639 |
| International | | | |
+----------------+------------+----------+----------+
| Total | 1,400 | 1,362 | 1,335 |
| owned | | | |
| and | | | |
| concessions | | | |
+----------------+------------+----------+----------+
| Franchises | | | |
+----------------+------------+----------+----------+
| France | 0 | 0 | 1 |
+----------------+------------+----------+----------+
| Iberia | 5 | 5 | 5 |
+----------------+------------+----------+----------+
| Australia | 1 | 1 | 1 |
+----------------+------------+----------+----------+
| Czech Republic | 0 | 0 | 0 |
+----------------+------------+----------+----------+
| Total | 6 | 6 | 7 |
| franchises | | | |
+----------------+------------+----------+----------+
| Total | 1,406 | 1,368 | 1,342 |
| operational | | | |
| outlets | | | |
+----------------+------------+----------+----------+
1 Manufacturer price reductions, 2008 vs 2009:
- Sony Playstation 3 (GBP299.99 to GBP249.99)
- Microsoft Xbox 360 Elite (GBP229.99 to GBP199.99)
2 Source: GfK ChartTrack
Enquiries:
+----------------+-----------+
| The GAME | +44 |
| Group | (0)1256 |
| plc: | 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, | |
| Wendel | |
| Verbeek, | |
| Oliver | |
| Hughes | |
+----------------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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