Profits fall 81 per cent at GAME

Ben Parfitt
Profits fall 81 per cent at GAME

GAME Digital has seen profits for the year fall to 4.9m, down 81 per cent the 25.8m reported in the previous year.

Sales dropped from 866.6m to 822.5m, a 5.1 per cent decline. Adjusted profit fell 56.8 per cent to 16.4m. The board has approved a final share dividend of 1.75p per share – that figure stood at 7.35p a year ago.

Gross transactional value in the UK was down 11 per cent year-on-year, although Spain was up 12.5 per cent. UK revenue was down 11.3 per cent. GAME's overall UK market share was down one point at 32 per cent.

Certain areas of the business were up, however, with digital content sales climbing 15 per cent, accessories up 19 per cent and GAMEtronics pre-owned phones and tablet sales up 60 per cent. Events and eSports climbed 45.2 per cent.

GAME's report says the company is encouraged by the coming year's line-up of hardware and software and, for the first time, factors the potential impact of VR into its outlook. It admits, however, that this must be balanced against what it describes as prevailing trading conditions”, describing the last year as challenging”, with reduced footfall over Christmas and fewer triple-A releases.

Three UK stores were opened in the period and nine closed. Only one store was loss making for the year, although none were the year before.

Also has also been confirmed that Franck Tuil is stepping down as non-executive director.

GAME plans to start offering online trade-in services next year. Also mentioned is the intention to sort offering product repairs and some sort of unspecified subscription service. In fact, diversifying into other areas and increasing its focus on its non-core businesses seems to be the thrust of GAME's forward planning.

Market dynamics in the UK have undoubtedly been tough in the past year,” CEO Martyn Gibbs said. The management team responded quickly to these new market conditions and have made significant progress with its action plan since January. This has included improving supplier arrangements and terms, implementing efficiency and cost saving initiatives across the business; completing an organisation redesign and other process improvements. This programme of activity is ongoing and has started to help to improve our financial performance.

We recognise that we need to continue to reposition and transform the business. We have a clear vision to build a company that combines multichannel retail, live gaming and digital services to deliver a highly compelling and unique combination of products and services for gamers. This planning is being implemented quickly across the business with further expansion and development of new and growing activities as well as trialling new concepts such as in- store gaming arenas.

I am confident that by organising ourselves effectively, delivering for our customers and building ever stronger and more collaborative partnerships with our key suppliers, we are positioning the business to deliver on our strategy and transition to sustainable earnings growth.”

Here's a point of interest, too – GAME will, via Multiplay, be hosting Titanfall 2's servers. So there.

All eyes now turn to Christmas, which will be of vital importance to the company.

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