GAME says its trading performance over the Christmas period has defied ‘challenging trading conditions’ showing a rise in group sales of 16 per cent.
The games specialist this morning provided an update to investors on its trading over the six weeks around the holiday and 50 weeks up to January 10th.
GAME Group reported total sales increased 16 per cent or the six week period – up a total 24.2 per cent for the 50-week period.
International sales at the firm were boosted too, with sales rising 17.3 per cent over Christmas and up 28.1 per cent for the 50-week period.
"The Group has delivered a strong Christmas sales performance in a very difficult trading environment," said chairman Peter Lewis.
Lewis added that the rise in sales means the company now expects profit before costs for the 53 weeks to 31 January 2009 to be ‘not less than 122m (2008: 75.5m), slightly ahead of market expectations’.
Lewis added: "The existence of five successful hardware formats throughout the year has, as anticipated, led to an increase in the proportion of higher margin software in the sales mix. This trend continued through the Christmas trading period and combined with the success of other margin enhancing initiatives we expect that Group gross margin for the 53 weeks to 31 January 2009 will be around 140 basis points ahead of last year at 26.2% and slightly ahead of our previous guidance.
"The Gamestation integration is progressing well and we now expect to deliver synergies of 10m, ahead of our previous guidance of 9m, in the 53 weeks to 31 January 2009."
In its trading update, an added statement from the retailer said that it had benefitted somewhat from the tumultuous time rival entertainment retailers such as Woolworths and Zavvi experienced: "The wider economic environment has led to challenging trading conditions, albeit that the UK also experienced significant changes to the competitive landscape with some competitors having limited availability of stock or ceasing to trade. These events gave some upside to the performance in the UK business during the latter part of this key trading period."
But despite a rise in sales and market-beating profit projections, Lewis said GAME’s Board is ‘cautious’ about the year ahead.
He said: "The Board is cautious about the outlook for 2009 and is aware that general economic conditions are likely to deteriorate further. Revenue growth for the Group will be challenging and there will continue to be inflationary pressures on costs."