Game profits plunge despite sales increase

The gaming specialist posted a 25.5% slump in pre-tax profit year-on-year in the 26 weeks to January 27 to £12.3m, driven by a 56% nosedive in pre-tax profit across its core retail division to £9.7m.

The retailer recorded a 3.9% increase in revenue during the period to £517.4m.

Game, which entered into an agreement with Sports Direct last month resulting in the sporting goods retailer taking a 50% stake in Game’s Belong business, plans to roll out its gaming arenas to 100 locations over the next three years to drive profitability.

The retailer’s gross transaction value (GTV) for its events and esports division rose 31% during the period to £7.1m as Game continues to diversify and expand its offer. 

Game said its core UK sales were negatively impacted by margin decline due to a change in its product mix, but added that this had been offset in part by £5m of savings from “further operational efficiencies”.

Game has appointed Martin Hopcroft as interim chief financial officer with immediate effect.

Chief executive Martyn Gibbs said: “During the period important strategic progress was achieved, helping us to better position the group for our development in the rapidly growing esports market with our unique and high-margin concept traded under the Belong banner.

“The traditional retail landscape is under increasing pressure and we have developed a strong growth strategy to utilise the valuable components of our core business in building our new experience-based gaming offer.”

“We continue to negotiate property savings and, where appropriate, close stores, rationalise retail working hours and deliver further operational and procurement benefits as well as focus on our core retail opportunities including a large array of new software releases, particularly during the final quarter of the 2018 calendar year.”