Game full-year adjusted pre-tax profit dropped 4.5% to £38m as operating costs hit the specialist’s performance.
- Game full-year pre-tax profit falls to £38m
- Operating costs hit performance
- UK sales rise but fall 2.9% in Spain
Adjusted EBITDA declined to £46.9m from £51.3m in the year to July 25 as the retailer was also hit by the “competitive environment over the Christmas”.
UK sales rose 1.7% to £655.9m but in Spain fell 2.9% to £210.7m. At a group level revenues were flat at £866.6m.
The retailer, which operates 319 UK stores and 275 in Spain, reported higher margins due to selling a larger proportion of high margin software and also because of growing digital sales.
Revenues excluding hardware grew 3.3% over the year. Game said: “As expected after the initial surge in sales following the launches of Xbox One and PlayStation 4 in the prior year, hardware revenues were lower as a result of reduced average selling prices, falling by 5.4% over the year.”
Game held its 33% market share in the UK and said it has over 550,000 registered Game Wallet customers and 17 million members of its loyalty scheme. In the UK over half of all transactions, representing two thirds by value, were linked to a Reward account.
Game said since year-end trading “has been in line with expectations”.
It said: “The UK business is outperforming the market although the market is currently down on the prior year largely due to lower hardware sales. Overall, given positive market dynamics together with the increased investment in the business, at this early stage in the year the board expects the group to achieve growth in the year ahead in line with expectations.”
Game is aiming to move beyond its retail core and acquired events company Multiplay in March, leading to the formation of its eSports & Events division, “an important step forward in our community strategy”. Multiplay runs Insomnia, the UK’s largest gaming festival.
Game chief executive Martyn Gibbs said: “Over the last 12 months, our customers and publisher partners have responded positively as we have driven forward our strategy, enhancing our customer and community engagement and broadening our offer beyond pure retail to the places and ways in which our customers play games.
“Looking forward, with the growth opportunities available, particularly in Multiplay, we are committed to growing our businesses and increasing our investment in both capital projects and our operating cost base. We believe we are well prepared for Black Friday and the peak Christmas season, with a strong, specialist customer offer across all product categories.”