The company’s pre-tax profits soared 33.4 per cent to£33.3 million for the six months to July 31, coming in at the top end of market expectations.
However, like-for-like growth in the UK has plunged from 24.2 per cent in the first half to 4.6 per cent in the first eight weeks of the new financial year, prompting analysts to question whether the retailer’s stellar success is beginning to slow.
Chief executive Lisa Morgan said trading was “in line with expectations” and that Game “was not seeing any slowdown in demand”. She pointed out that 50 per cent of Game’s annual sales were expected to come between now and January and that the business continued to make good progress.
“We had a phenomenal first half due to the huge software titles and we’re looking forward to Christmas,” said Morgan.
Game raised its guidance for group full-year like-for-like sales growth from between 5 and 10 per cent to between 8 and 12 per cent.
However, Landsbanki analyst Mark Photiades said that increased competition was likely to have an impact on Game. He said: “Competition is likely to be fierce [among] non-specialist retailers. Game’s pre-owned offer is likely to be rivalled by HMV.”
But Seymour Pierce analyst Freddie George said Game still had a “compelling offer”. “Although there might be some disappointment with current trading – probably the effects of weaker consumer confidence – there is still strong momentum in sales and the release schedule looks good before Christmas,” he said.
Game revealed international like-for-likes were up 17.4 per cent in the first half, while e-commerce sales increased 80 per cent year-on-year to£32 million.
After a successful trial in six Borders stores, Game is to open 33 concessions in the book retailer’s UK outlets. The group has also acquired leading Czech PC and video games retailer JRC for£3.95 million.
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