Thursday, January 20, 2022

Game’s profits tumble 84%

Game has recorded a dramatic fall in earnings this year due to a challenging period for UK retail, but insists its current trading year is in line with its expectations.

Pre-tax profits at the video games retailer plummeted by 84 per cent to £4.1 million in the full-year period to the end of July, thanks to lower gross profit generation and higher operating expenses.

Game also acquired Ads Reality and Social Nat in its second half.

Meanwhile, group sales dropped by 6.2 per cent to £813.1 million, with strong sales growth in Spain offsetting the challenging UK market.

RELATED: July worst month on record for UK gaming retail

However, the retailer‘s turnaround programme is still progressing and its diversification initiatives are set to meet targets.

In fact, diversified areas such as digital content, accessories and second-hand phones and tablets accounted for 32.2 per cent of profits in this financial year, compared to 27 per cent the prior year.

Game‘s events, e-sports and gross digital values also has an uptick of 45.2 per cent, and its gaming arena continues to be rolled out and met with “strong” interest.

The retailer said trading for the first 10 weeks of the current year has been in line with group plans and that it remained “encouraged” by upcoming new games releases, consoles and virtual reality technology.

RELATED: Game chairman David Hamid to step down

“Market dynamics in the UK have undoubtedly been tough in the past year. The management team responded quickly to these new market conditions and have made significant progress with its action plan since January,” chief executive Martyn Gibbs said.

“We recognise that we need to continue to reposition and transform the business. We have a clear vision to build a company that combines multichannel retail, live gaming and digital services to deliver a highly compelling and unique combination of products and services for gamers. This planning is being implemented quickly across the business.

“I am confident that by organising ourselves effectively, delivering for our customers and building ever stronger and more collaborative partnerships with our key suppliers, we are positioning the business to deliver on our strategy and transition to sustainable earnings growth.”

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