Game issues profit warning
January 13, 2010 |13:33 | New Games By : Team X
Falling revenue from cut-price games consoles and greater competition from supermarkets dented Christmas sales at Game Group, prompting the video game retailer to warn full-year profits would be below analysts' expectations.
The company also gave a downbeat assessment of its full-year sales prospects, although it said a more encouraging programme of software releases for the new year would increase gross margins in 2010. In the five-week period to the end of December, like-for-like sales slid 13.8 per cent, with like-for-likes in the UK and Ireland down 17.5 per cent.
International sales fared slightly better, falling only 5.9 per cent in constant currency terms. Lisa Morgan, chief executive, said: "This sales performance is a reflection of the negative trend in the wider PC and video games market, which we saw continue over the Christmas period." As a result, Game said it expected profit before exceptionals for the year to the end of January to come in between £87m and £93m. This is below the £95m-£100m that most analysts had expected.
Game was already set to face a tough comparable with last year, when the company benefited from the the release of new games consoles and the demise of rivals such as Zavvi and Woolworths. But there has been no such rash of new console releases this year.
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