Christmas cheer for GAME, but profits down

A buoyant festive period saw like-for-like sales for the six weeks ending January 2006 increase by 27.7 per cent in the UK and Ireland, with total group like-for-like sales increasing by 26.6 per cent. The firm’s increased European presence, which contributed massively to the results, saw Continental sales increase by 69.4 per cent.

For the full year, like-for-like sales across the group for the 49 weeks ending January 7th were up 2.7 per cent, with sales in the UK and Ireland increasing by 1.6 per cent.

However, following a profit warning issued by GAME in November, pre-tax profit fell from £31.9 million to between £8-10 million. The fall was attributed to cyclical deflation in software selling prices and the increased anticipation of new formats such as Xbox 360, PS3 and Nintendo Revolution.

“The outstanding Christmas sales performance has helped an otherwise difficult year as the industry transitions to the next technology cycle,” commented GAME chairman Peter Lewis. “The UK market continues to be very competitive, which has in part contributed to our reduced gross margins.

“However, the resilience of our business model has been amply demonstrated. The new technology cycle has now begun. With 700 stores our business is well positioned to enjoy the benefits. The board remains confident of a successful outcome for the financial year 2006/07.”

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