GAME enjoys 'robust' second half trading
GAME has said it enjoyed robust trading in the second half of its financial year with a good uplift in gross margin and a positive EBITDA contribution.
In a year-end trading update, the specialist games retailer said revenues excluding hardware were up over 7% in the period as the company benefited from a 16% increase digital sales. Preowned and other non-hardware sales also put in a good performance.
Hardware revenues fell by 19% mainly due to lower average selling prices.
Given the higher mix of higher margin product sales, lower mix of lower margin hardware sales and the overall improvement in margin rate in both categories, overall margins were up over 200 basis points on last year, driving a 9% increase in gross profit in the second half.
GAME said over 550,000 customers have registered with its GAME Wallet e-payment platform and there are now over 1.5 million registered GAME app users in the UK and Spain. In March GAME launched GAME Marketplace, which to date has added over 100,000 gaming-related products to the range.
GAME's Spanish business grew its revenues 25% on a constant currency basis during the second half.
Looking ahead, GAME expects the overall UK video games market to grow slightly over the next twelve months and said it remains confident that the company will achieve growth in sales and profits in the full year.
Martyn Gibbs, GAME chief executive, said: "We are confident that our strategy of focusing on the recruitment and retention of Xbox One and PlayStation 4 owners across our two major territories provides a solid foundation from which to drive growth over the medium term.
"We have made good progress on our customer and community engagement and strategic priorities over the year. Our ambition to broaden our offer beyond purely retail, to the places and ways in which our customers play games is moving forward at pace, with continued support from our supplier partners.
"Our preparations for this year's peak trading season are already well advanced. The line-up of new physical and digital games launches in the coming months looks very strong and our pre-order rates on the major titles are encouraging, supported by our excellent range of exclusives."
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