GAME bullish despite profit drops

Retailer GAME has reported profits in line with its January forecast, though it has suffered notable drops in both sales and profits for the year ending January 2011.

Turnover fell from 1.772bn to 1.625bn, with overall sales falling 8.3 per cent year-on-year. UK & Ireland sales fell by 12.8 per cent and even online dropped by two per cent. Like-for-like UK sales dropped 9.8 per cent and overall sales by 6.7 per cent.

Pre-tax profits plunged from 90.4m last year to 37.8m. Operating profit fell from 88.6m to 28.5m.

For Q1 overall sales were down 14.3 per cent, pr 12.1 per cent like-for-like. UK & Ireland sales declined by 14.9 per cent, or 12.4 per cent like-for-like. However, GAME was keen to highlight the overall market decline of 9.9 per cent, pointing out that it "continues to outperform the UK market".

Pre-owned revenue was up three per cent to 386.9m and digital revenues increased by an impressive 27 per cent to 41m/ Own label revenue also soared, climbing 36 per cent to 29m.

Throughout the last year GAME’s UK & Ireland store count decreased by 38 to 639 outlets. The total number of owned shops and concessions now stands at 1,312, down from 1,374 at the end of 2009.

"GAME is on a journey," group chief executive Ian Shepherd stated. "Our customers have new and different ways to buy and play video games and we need to make sure our business provides everything they want, wherever they want it.

"Today, no other business does this for the gamer. We plan to be the first.

"We are operating, however, in a very challenging economic climate and have a lot to do and a long way to go if we want to outperform the market by growing new revenue streams. Our strategy is designed to do just that, and our dedicated teams around the world are focused on delivering it. I’m encouraged by the good progress we’ve seen in the early months of this year.

"We face the tough markets of 2011 with a strong balance sheet, high quality retail operations and real differentiators that few competitors can match. We are well placed to deal with the prevailing economic challenges and help our customers through these difficult times and consequently are maintaining guidance for the full year.

"In the longer term, we are putting GAME in the right place to deliver the strongest returns as the industry continues to change and evolve."