Share price tumbles as GAME suffers credit insurance blow

Ben Parfitt
Share price tumbles as GAME suffers credit insurance blow

The share price of GAME Digital is currently at its lowest ever point.

The stock is currently trading at 81p, having fallen as low as 80p earlier today. GAME was trading for 360p back in December 31st 2014, although it fell below the 100p mark in January of this year.

The Guardian reports that GAME chairman David Hamid recently sent a letter to shareholders confirming that a review by the major credit insurers resulted in the reduction or removal of significant levels of insurance cover”. This was blamed on a second successive poor Christmas.

It is entirely possible this has set alarm bells ringing with some investors, as while credit insurance comes and goes, similar development have pre-empted famous High Street collapses such as Woolworths and Zavvi.

GAME, however, says that the current situation has had no material impact on the group's ability to purchase stock from suppliers on credit terms,” although it has conceded that this may change as the group's peak trading period approaches”.

In April GAME announced that it had secured a new 100m asset-backed lending facility, which it argued was preferable to its traditional revolving credit facilities. The month before the retailer reported a drop in H1 profits and revenues.

Since its arrival on the stock exchange in 2014 GAME has issued more than one profit warning and often cited the challenging market conditions it faces.

GET EMAIL UPDATES

Subscribe