Christmas Trading Statement (2583V)

TIDMGMG

RNS Number : 2583V

Game Group PLC

10 January 2012

The GAME Group plc: Christmas Trading Statement

The GAME Group plc ('GAME' or 'the Group') is today providing an update on its trading performance over the Christmas period and for the 49 weeks to 7 January 2012.

 
                        8 weeks to 7 January      49 weeks to 7 January 
                                 2012                      2012 
--------------------  ------------------------  ------------------------ 
                       Total sales   Lfl sales   Total sales   Lfl sales 
                           (%)          (%)          (%)          (%) 
--------------------  ------------  ----------  ------------  ---------- 
 Group                      -14.7%       -12.9         -11.9       -10.0 
--------------------  ------------  ----------  ------------  ---------- 
   UK & Eire stores          -17.6       -15.2         -14.5       -12.0 
--------------------  ------------  ----------  ------------  ---------- 
   International 
    stores                   -12.0       -11.4          -9.5        -8.2 
--------------------  ------------  ----------  ------------  ---------- 
   Group Online                3.9         3.9           1.3         1.3 
--------------------  ------------  ----------  ------------  ----------

-- Our performance was ahead of the overall games market, which was -13.1% for the 49 weeks. Full year Group

like for like (lfl) sales are now expected to be no better than -10.3%.

-- In response to challenging market conditions, promotional activity impacted gross margins over Christmas and full year gross margins will now be down by approximately 190 basis points.

-- Cost control has been maintained and full year operating costs will be GBP8-10m lower than last year, as previously stated.

-- Strong working capital disciplines have supported operating cashflow. The Group expects to have a year-end cash position similar to last year (2011: GBP120m).

-- The Group currently remains compliant with its loan covenants. However, the difficult market conditions raise the likelihood that it will not meet its EBITDA covenants (fixed charge coverage and leverage) when they are tested on 27 February 2012 for the period to 31 January 2012. Given the year-end cash position, the debt service covenant should be met satisfactorily. The Group continues to be in regular and constructive dialogue with its lenders, who remain supportive.

-- The PlayStation Vita will launch in Europe on 22 February, and the Nintendo Wii U is scheduled to launch later in the year. GAME expects to be the European market leader for each launch.

Ian Shepherd, GAME CEO said: "Our industry had an incredibly tough 2011, and so did we. We remain the market leader and have a clear strategy which will return the business to growth. We are adapting to the changing market and are well prepared for the next hardware cycle."

   -     ENDS -

Notes:

1) The GAME Group management team will host an analyst conference call at 9.30am on 10 January 2012. For further details contact Brunswick on 020 7404 5959.

   2)   Strategic KPI progress:

- Store closure programme on track: net 39 stores closed this year; on target to have circa 550 UK stores by 2013. Short average lease lengths allow this programme to be accelerated if necessary.

   -     Expansion of digital offer: digital sales growth over 40% year-on-year.

- Customer loyalty: half a million new customers joined the Group's loyalty schemes in the 8 weeks since 16(th) November, taking the total to 19.8m.

   -     Innovative retail: following launch of GAMEwallet, 12 new games added to the service. 
   -     Multichannel development: e-commerce market share holding firm in competitive market. 
   3)   Store numbers: 
 
                                7 January 2012  31 January 2011 
                                        Number           Number 
Company owned and concessions 
UK and Ireland:                            610              639 
 
  *    GAME - stores                       368              381 
 
  *    GAME - concessions                   10               11 
 
  *    Gamestation                         232              247 
 
France                                     193              197 
Iberia                                     291              287 
Scandinavia                                 57               65 
Czech Republic                              30               31 
Total Continental Europe                   571              580 
Australia                                   92               93 
Total International                        663              673 
Total owned and concessions              1,273            1,312 
Franchises 
Australia                                    1                1 
Total franchises                             1                1 
Total operational outlets                1,274            1,313

Contact:

 
 
                   Ian Shepherd, Group CEO 
                   Ben White, Group Finance Director 
GAME Group         Simon Soffe, Communications & Investor 
 plc               Relations Director                       +44 1256 784176 
                  Jonathan Glass 
                   James Olley 
Brunswick Group    Natalia Marisova                         +44 207 404 5959

This information is provided by RNS

The company news service from the London Stock Exchange

END

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