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CEO says “Continued focus on costs and efficiencies” which gives a lot of comfort.
Focus on providing gaming experiences and services. I can see this working personally.
Putting a potential buyout to one side, this is really cheap on any number of levels. No debt. £95m cash. Creating operational efficiencies and improving balance sheet. Current P/e is 3.6 !! That’s cheap!! Earnings per share up 29.6% on prior year to 7p. Share price at 26.
How about 200DMA + 30%
What do you guys think MAs share buyout price will be?
I agree
how do you calculate 1 million?
Taken around a Million @ 26p
Is anyone notice the largest buyer on the BID.
not just 3.5mill also gave 55 mill in support The firm has also bought 50 per cent of GAME's relatively new Belong brand for £3.2m ($4.2m) in February 2018, in addition to providing £55m ($72.5m) in capital for the retailer as part of an on-going collaboration
sports direct do make offers when they go near 30%
Some news out in last 24h giving latest stats on spending in UK gaming market,which is bucking the trend of many other retail sectors.Recent rumours of a bid for Game Digital in my opinion are founded,if as indicated by Sports Direct they are planning mass roll out of gaming venues in their stores it is only a small leap to see them wanting to install games stores inside also which would cut Game Digital,s overheads massively and convert a very large proportion of the current half a billion revenue into post tax profits.So a clear path to value is here for a buyer.
https://www.gamesindustry.biz/articles/2019-04-02-record-year-for-uk-games-market-as-spending-nears-usd6bn
Record year for UK games market as spending nears £6bn
trend is sorts direct usually do make a bid once they go near 30%.
5C you're quoting half year numbers, the half where Game actually makes money. In H2 this unwinds: H218 was an EBITDA loss of 11.1m and H217 15.3m loss. The full year story is FY18: £10.1 and FY17: £8m and EBTDA margin of 1%. Can't get any lower than that really can it?
The areas in gaming that are growing are digital, mobile and online, all areas where Game lacks any penetration. Despite growth in the industry, Game H119 GTV was lower than H118 and H117. A decline in the face of industry growth.
I would counter by saying a company with a current market cap of £44m that has Cash and cash equivalents of £95m and earnings per share of 9.8p with adjusted EBITDA of £25.8m is significantly undervalued.And game digital are in one of very few retail sectors showing exponential growth.
There was a news item on the BBC today stating the UK Gaming market is now worth a record £5.7bn per year,something that a certain Mr Ashley would be well aware of.It should be noted that Sports Direct increased their holding here after Game Digital released their latest results around 12 days ago.They now hold just under the key 30% level which when crossed an offer must be made.
https://www.bbc.co.uk/news/newsbeat-47783558
FiveCandles the question was how is Game doing now compared to 'a few years back'.
They have made progress since last year no doubt, mostly around whittling away at costs. Despite this progress each reporting period sees future earnings estimates being downgraded (refer below URL, although given the shrinking market cap I think coverage is now confined to Edison). But the SP speaks for itself, not far off the post IPO low and lower than any period you choose.
https://www.marketscreener.com/GAME-DIGITAL-PLC-16646168/revisions/
Ragnar,so just to be clear you are saying that no progress has been seen in the last results issued on the 21st march that showed pre tax profits up over 20%,net cash from operations up 30%,Adjusted (basic) earnings per share up 53%,Adjusted Group EBITDA up 21.7%, ?
Shalamar, the company has been in a perpetual state of decline for 5 years since the IPO: as seen clearly from the SP, down 87% from the IPO price of 200p and EBITDA, down from £51m in 2014 to £10m.
The company's pledge to build a sustainable business through shifting reliance from the console cycle to digital content has not happened; content share of revenue is still the same at around 45% as it was in 2014.
They sold half of Belong for £3.5m, doesn't display much confidence in the idea does it? SD does not need to buy Game to roll out Belong in its stores, they already agreed to do that under the Collaboration Agreement. They are well behind on their roll out plan for Belong because they dont know the best configuration to make it work yet.
I hold some of these because I think it's a free option on the Belong idea, the network of users must be worth something and I think the liquidation value is not too far from the current SP. I got lucky and managed to sell most on the spike to the 50s but still have a few, so I hope you are right that Game will be taken out, but to say that they are doing well is simply not true. Check the progress since the 2014 annual report:
http://www.gamedigitalplc.com/~/media/Files/G/Game-Corp-V2/documents/results-reports-presentations/2014/game-ara-14-v2.pdf
Ragnar,are you aware that Game had a very detailed operational review a few years back where some tough decisions were made and are doing very well now compared to then.This includes big savings on rents and they have even got around 26 of their 274 stores on zero rents,a big part of the new plan is gaming arena,s where they are already teamed up with Sports Direct with many more venues rolling out,and it has already proved a good move with a 20% increase in pre tax profits.So compared to a lot of other retailers they are doing rather well,and even Mike Ashley himself said in a recent interview that he sees Gaming and Gaming venues a key part of Sport Directs future.He wants to turn Sport Direct stores into "places of destination" not just a retail environment,this includes in house Gyms and Gaming Arena,s to provide cross selling opportunities within the groups brands and allied businesses.If you look at Games figures they have actually been able to maintain revenues at a fairly consistent level,the problems before arose from costs and overheads which are now being slashed.So this business if taken into Sport Direct as a whole could be a real money spinner for the guys at SD and also compliment and boost its existing trade.For that reason I see a very decent bid coming here and in my opinion it will be in the 40p to 45p range which will be at a level that could get shareholder and management approvals (and still a bargain for SD).
L2analyst this is a snapshot of the cash balance, after the peak sales season. The cash balance will be much lower at other times of the year and I believe will steadily reduce after January as suppliers are paid and sales are lower. Look at the payables balance at 31 jan and the ongoing net working capital deficit.
I forgot to mention i think a 40p to 45p bid here would likely get approvals from both management and shareholders.It is game on IMVHO
the guys bought sofa.com, Evans. again you could have said why bother
Ragnar,you could say the same about every business that Sport Direct have bought.The synergy here is that SD want to turn their stores into places of destination comprising n house Gyms,Gaming zones,and sport and gaming retail.By bringing GMD in house they will be able to smash overheads and increase revenue and profit margins.SD have to do this because other retailers are moving in that direction and they need to maintain and grow market share.So in my opinion this is a fantastic opportunity for Sports Direct and Game Digital.
of course he needs the retail estate. he has lost the chance to get foot sized stores. also it's not just the retail. he will get access to SPAIN. and ONLINE Game resources.
Sports Direct already owns 50% of Belong. They purchased this for £3.5m last year. I doubt they or anyone is interested in taking out the Game retail estate so why would they pay 45p for the remaining 50% of Belong when they paid £3.5m for the first 50%?
I guess one reason would be the cash balance. Game has gone bust several times, the most recent time because suppliers stopped providing Game with products after insurers refused to provide credit insurance, due to Game's precarious financial position. I believe that a large cash balance is required to insure their supply chain and for this reason hasn't been used to buy back shares, despite a deep discount to NTA.
I've wondered over the last couple of years why Game continues to require such a large balance and maintains what seems to be an excessive amount of available debt liquidity. I would have thought Eliot would have campaigned to do take advantage of this liquidity and be more activist, but they couldn't wait to wash their hands.
SD has much greater financial clout to insure the supply chain and could potentially release some of this cash. But do they really want Game's legacy retail estate?