13 Nov 2014 07:00
13 November 2014
Interim Management Statement
START TO NEW FINANCIAL YEAR IN LINE WITH EXPECTATIONS
GAME Digital plc ("GAME" or the "Group"), the specialist video games retailer, today issues its Interim Management Statement for the 13 week period ended 25 October 2014.
Total Group revenue rose by 17% year-on-year in the period. This increase is ahead of the combined overall growth in the video games market in the UK and Spain, which was up by 14%1, predominantly driven by continued growth in hardware sales.
Both GAME's UK and Spanish businesses continue to grow their market share across hardware, software and digital in their respective territories. In particular, the Group's focus on the development of its digital offer has helped drive an increase in digital market share through in-store and online sales over the period, with strong growth in non-IFRS digital receipts of 49% year-on-year.
Gross margins were in line with our expectations, with increased hardware sales in the mix. Our net cash balance remains strong, benefiting from the provision of further credit insurance during the period.
We continue to invest in our people, technology and infrastructure to support the long term development of the Group. We are pleased with the most recent enhancements to our omni-channel offer, including upgrades to our UK website and the launch of our 'Scan it!' service on the GAME App (allowing customers to access interactive gaming content and their own 'personalised' price, based on the value of their GAME Wallet credit). During the period over 150,000 customers registered with the GAME App across the UK and Spain, taking the total number across the Group to over 900,000.
In Spain, GAME has now completed the transfer of 43 of the 45 stores from GameStop. As part of that transaction, GAME will continue to honour reward vouchers, trade-in credits and pre-order deposits of former customers of GameStop in Spain.
The period also saw the first conversion of Virtual Loyalty Shares2 into Reward points by more than 8,000 customers who were awarded the virtual shares at the time of the IPO. In total, over £1 million of value has been converted into Reward point credit.
Martyn Gibbs, Chief Executive Officer, said:
"The new financial year has begun in line with our expectations. We are pleased with the continued progress made across our strategic initiatives and as we move into the key trading months of the year we are encouraged by the strength of the line-up of new physical and digital games being launched.
"Overall we remain well prepared for peak, with our campaign "It's GAME season" now launched across all forms of media, exclusives secured on many of the major pre-Christmas new game releases, a great line-up of customer offers across all product categories and a strong balance sheet."
Enquiries: |
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GAME Digital PLC | +44 (0) 1256 784 000 |
Martyn Gibbs | Chief Executive Officer |
Benedict Smith | Chief Financial Officer |
James Staveley | Investor Relations & Corporate Development Director |
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Citigate Dewe Rogerson | +44 (0) 20 7638 9571 |
Grant Ringshaw | |
Jos Bieneman | |
Notes:
1. Source: GFK-Chart Track; market share based on value of retail sales of mint hardware, mint software, console digital content and gaming accessories for 13 weeks ended 25 October 2014
2. At the time of the IPO, GAME established the Virtual Loyalty Share Plan in order to reward 20,000 of its most loyal customers in the UK. Virtual Loyalty Shares are not Ordinary Shares, or any other type of security in the capital of the Company, and are instead special customer loyalty points which track the value of the Company's Ordinary Shares. The aggregate value of the Virtual Loyalty Shares to the Group's customers at launch was £2 million. Customers who received Virtual Loyalty Shares are able to redeem them on certain fixed dates for reward points which they can spend in accordance with the terms and conditions governing GAME's existing reward programme.