Game narrows annual losses but sales flatline

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Game update

Game has managed to shrink its full-year losses but sales remained flat amid a transformational year for the retailer.

For the 52-week period ending July 28, the video game retailer’s loss before tax came in at £7.4 million, a 26 per cent growth on the £10 million loss recorded last year.

While revenue dipped 0.1 per cent year-on-year to £782.3 million, it’s an improvement on the 3.6 per cent decline reported in the previous financial year.

Games’s gross profit also declined 4.3 per cent to £196.2 million, but its gross transaction value (GTV) grew 1.9 per cent year-on-year to £907.7 million.

The retailer said its events and esports division helped drive its GTV growth, with revenues up 40.2 per cent year-on-year to £12.2 million.

Game’s overall adjusted EBITDA dropped 26.3 per cent, thanks to a combination of a decline in its core retail and an improvement in its events, esports and digital arm.

Adjusted EBITDA for core retail decreased 12.9 per cent to £12.2 million, which Game attributed to the delivery of operational efficiencies as well as a margin decline in its UK market due to the change in mix of products.

However, performance in core retail was mitigated by cost savings of £11.4 million in the UK as well as a seven per cent increased in GTV in Game’s Spanish market.

Meanwhile, adjusted EBITDA for events, esports and digital came in at a loss of £2.1 million, although this was much better than the £6 million loss recorded last year mainly because of growth of Belong, Game’s esports and experienced-based gaming proposition.

“Despite the challenges facing our core retail business and the difficult wider retail environment, we are making good progress on our strategic initiatives to ensure we  continue to meet the needs of gamers, our customers and our supplier partners as we transform our business to become a leading provider of gaming experiences and services,” chief executive Martyn Gibbs said.

“Our core UK and Spain console markets have remained in growth this year driving a strong sales performance and we are constantly improving our multi-channel customer  proposition in our stores and online to maximise on these opportunities.”

He added: “During the period the UK retail business delivered cost savings of £11.4 million, as we continue to take advantage of our flexible lease profile to renegotiate leases, relocate or close stores.

“In addition, store operating efficiencies, procurement benefits and a reorganisation of our head office have also realised further savings this year.”

Gibbs also said that Belong remained cored to Game’s transformation strategy and that market growth and both the UK and Spain has continued in the current financial year thanks to a strong line-up of new releases.

“We continue to expand the business through the opening of larger Belong gaming arenas while improving our Game retail offer to fully capitalise on the strong growth potential in the esports market,” he said.

“The first of these larger Belong arenas has opened and trading results to date are promising.

“Planning for the further rollout of arena locations is well advanced.”

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