While UK retailer GAME has seen its revenue fall by 4.7 per cent year-over-year to £492.9 million for the half-year leading to January 26th, 2019, overall its profit before tax has increased by 20.3 per cent to £14.8 million.
GAME saw a drop in hardware sales which dipped by over 9 per cent, whilst preowned sales fell by almost 21 per cent.
GAME’s pay-to-play areas within its high street stores – BELONG – "saw growth in revenue and gross profit", but a decline in revenue across the company’s Events business resulted in an EBITDA (earnings before interest, tax, depreciation and amortization) loss of £1.1 million. It reports a 20 per cent increase in BELONG stations in the period – up 44 per cent YoY – with two new BELONG arenas opened and an "increased number of stations in existing arenas".
GAME attributes its savings to "continued material cost savings driven from the rent negotiation programme, store payroll efficiencies and other store, head office and distribution savings", as well as "strong cash management".
"We are pleased with our performance in the first half delivering a 22% growth in Adjusted EBITDA and a material improvement in cash and liquidity during the period. Our core retail businesses are facing a challenging retail environment that continues to evolve at pace, but we have set ourselves up well with our transformation programme and continued focus on costs and efficiencies," said GAME CEO Martyn Gibbs. "Despite the market backdrop, the Group delivered a solid GTV performance and maintained its gross profit rate. Exclusives on new game releases, sales growth in higher margin categories and focusing on our multichannel and specialist customer offerings helped to offset a weaker console hardware market and the continued structural decline of the preowned market.
"During the period the UK Retail business delivered further efficiency improvements and achieved considerable cost savings across all areas including store operating and fixed costs, distribution and head office costs. Our flexible lease profile gives us a unique opportunity to work closely with landlords to manage our store portfolio and we continue to deliver, and anticipate ongoing, rent reductions.
"BELONG remains core to our transformation strategy and we have continued to pursue the expansion of this business through enlarging current arenas, opening new arenas and are planning for bigger arenas in more locations. We expect the property market to further favour the tenant leading to improved deals being available for the rollout. Esports shows strong growth potential and we will capitalise on our unique position in the market to further expand our opportunities.
"The improved Group profitability in the half and strong cash position means that we are well placed to advance our strategic priorities in the coming months whilst managing our business closely in the current challenging retail environment."