Game Digital expects revenues to be down but earnings on track with expectations
Retailer Game Digital was unable to claw back the ground lost in the first half of the year according to a pre-close annual trading announcement released today.
The update revealed that revenues are expected to be £815m for the 12 months to July 2016, down from £867m in the previous year. And while Gross Transactional Values (the industry proxy for sales) were down in the UK – by 10.8 per cent – the decrease was less than the overall market, which was down nearly 13 per cent.
Game also has a considerable presence in Spain with 267 stores. Its currency adjusted growth was 12.4 per cent, ahead of the national average of 7.4 per cent.
The Basingstoke-based company was comfortable that earnings would come in between £26m and £32m although its share price ended the day four per cent down.
Chief executive Martyn Gibbs said:
"We continue to focus our efforts on maximising the potential of our core retail markets; driving operational improvements and efficiencies across the business; and developing our broader consumer and enterprise gaming services to support deeper engagement with our customers, communities and supplier partners.
"Next year will see several significant industry developments, with new console launches, the arrival of new ground-breaking virtual reality devices, as well as continued strong growth in competitive and social gaming."
Read more: Game Digital agrees £100m financing facility
The retailer has also undertaken several changes to its capital structure over the last ten months.
In October it agreed a £30m revolving credit facility with HSBC and Barclays. This was promptly replaced by a £100m asset-baked revolving facility with Luembourg-based Lajedosa Investments in April. And earlier in July this year, Game announced it would use an asset-backed facility of £75m from Wells Fargo and PNC "instead" of the Lajedosa facility.