11 Jan 2018 07:00
11 January 2018
GAME DIGITAL PLC
Trading Update
GAME Digital plc ("GAME Digital" or the "Group") is today providing an update on trading ahead of the Group's Annual General Meeting to be held on 25 January 2018.
Group Gross Transaction Value1 ("GTV") performance for the Peak Trading Period (1 November 2017 to 6 January 2018) and the 23 week year to date trading period ended 6 January 2018 was as follows:
Peak Trading Period to 6 January 2018 | 23 weeks to 6 January 2018 | |
GTV Growth % | GTV Growth % | |
Group | +5.2 | +3.8 |
UK Retail | +2.9 | +0.6 |
Spain Retail (€ basis) | +6.3 | +6.6 |
Group Headlines
· | Group GTV 5.2% over the Peak Trading Period up and up 3.8% over the first 23 trading weeks of the financial year to 6 January 2018 | |
- | UK Retail GTV (including BELONG) up 2.9% and Spain Retail GTV up 6.3% over Peak Trading Period | |
- | Strong GTV growth was achieved from lower margin Hardware, with sales up 25.8% over the Peak Trading Period and up 22.7% over the 23 week period, driven by Nintendo Switch™, continued adoption of PlayStation 4 and the launch of Xbox One X, leading to overall margins for the first 23 weeks to be down by approximately 100 basis points | |
- | Successful delivery of further cost savings in the UK, in excess of the previously estimated full year savings of approximately £4 million, with further cost saving initiatives underway to offset the margin impact of the sales mix change in the UK Retail business | |
· | Continued positive performance in the BELONG arenas, with over 155,000 hours played in the first 23 trading weeks of the financial year to 6 January 2018 (representing a utilisation level of 28.2% vs 21.3% in Q4 last year), with new arena openings planned from February 2018 onwards | |
· | Further positive developments within Esports and Events with Insomnia 62 to be held over the Easter weekend, including the hosting of the Call of Duty ("COD") World League: Birmingham Open, part of the COD World League Global Circuit with a prize pool of US$200,000, and the largest esports event the Group has run to date | |
· | Continued strong liquidity, with Group cash of £67 million on 31 December 2017 (2016: £43 million), and access to aggregate facilities of approximately £86 million across the UK and Spain (2016: £68 million) | |
· | As previously announced, the Multiplay Digital business was sold on 27 November 2017 for cash consideration of £19 million, with 10% of the proceeds held in escrow | |
Commenting, Martyn Gibbs, GAME Digital Chief Executive Officer, said:
"This positive sales performance for our Peak Trading Period was driven by our ability to capitalise on the strong customer demand for Nintendo Switch™, the continued adoption of PlayStation hardware and VR sales, the launch of Microsoft's Xbox One X and a more appealing line up of new software titles compared to the same time last year."
"Over the peak period, GAME focused on its core trading in all channels across both its geographies in highly competitive markets whilst delivering further cost savings in UK Retail and made good progress with its strategic initiatives. These additional cost savings mean our performance remains on track; as ever our full year result will also be subject to continued availability of consoles, such as Nintendo Switch™, and the timing and success of new game releases.
BELONG continues to make pleasing progress, with plans to invest in the roll out of further arenas in the UK from February onwards, and we have exciting plans to open our first two arenas in Spain later this year."
"I would like to thank the teams across the UK and Spain who have once again worked exceptionally hard serving our customers and gaming communities over the busiest period of the year. We also recognise the valuable and ongoing support from our supplier partners in delivering our competitive proposition."
The Group will announce its half year results on 27 March 2018.
Enquiries:
GAME Digital plc | +44 (0) 1256 784 000 |
Martyn Gibbs | Chief Executive Officer |
Mark Gifford | Chief Financial Officer |
Citigate Dewe Rogerson | +44 (0) 20 7638 9571 |
Jos Bieneman | |
Michael Russell | |
Notes:
1. Gross Transaction Value is a non-IFRS measure defined as total retail receipts excluding VAT and before the deduction of revenue deferral relating to loyalty points. Gross Transaction Value reflects the full retail sales value of digital sales, agency sales (including sales by business partners on GAME's Marketplace website), warranties and other similar arrangements and thereby includes the publishers' and sellers' shares of those transactions. Gross Transaction Value provides the most reliable measure of activity in an environment where more sales are expected to move from physical to digital.
Forward Looking Statements
This announcement contains certain forward-looking statements which have been made by the Directors in good faith using information available up until the date they approved the announcement. Forward-looking statements should be regarded with caution as by their nature such statements involve risk and uncertainties relating to events and circumstances that may occur in the future. Actual results may differ from those expressed in such statements, depending on the outcome of these uncertain future events.
Notes to editors
Listed on the London Stock Exchange in June 2014, GAME Digital plc is dedicated to delivering an authoritative range of specialist gaming products and services to the gaming communities of the UK, Spain and beyond, providing more ways for gamers to enjoy more games and unique gaming experiences, more often. GAME's UK and Spanish retail businesses are the market leaders in those geographical areas, operating a total of over 560 stores across the two areas, a fully integrated omni-channel offer including the multi-award winning GAME App, and over 4.5 million active customers across its Reward programmes. Game is developing its proposition with the continued expansion of BELONG, the Group's leisure experience, which brings video-gaming to high streets, shopping centres and communities nationwide. Through its esports and events activities the Group is delivering unparalleled consumer gaming experiences directly, and on behalf of third parties, including its flagship event, Insomnia, the UK's largest gaming festival. The Group's visual recognition and augmented reality business, Ads Reality, is pioneering the use of new technologies to reach gamers and business partners outside its main markets.
For more information please visit:
www.gamedigitalplc.com, www.game.co.uk, www.game.es, www.insomniagamingfestival.com or www.adsreality.com
This announcement constitutes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR").