Summary:

The bedding-in of third-generation consoles, growth in Wii family games and savings from buying the Gamestation chain helped Game Group’s pr…

imageThe bedding-in of third-generation consoles, growth in Wii family games and savings from buying the Gamestation chain helped Game Group’s pre-tax profit rise a record 74.9 percent to £119.6 million in the year to January 31, it said in a preliminary trading statement.

The group pulled in 32.2 percent more revenue at £1.97 billion – though, stripping out the effect of the Gamestation and other acquisitions, it was up only 8.8 percent. UK sales grew 63 percent to £112.7 million, international by 54 percent to £20.4 million. Online sales were a winner from a low base, up 85 percent to £106.8 million for a 109 percent profit growth at £6.1 million. Chair Peter Lewis credited “third-generation formats with many products now having a wider demographic appeal”.

But the reported year was front-loaded with both pre-recession and Christmas sales. So far in 2009, like-for-like group sales are actually down one percent – that’s down 2.4 percent in UK and 6.6 percent in Ireland. But CEO Lisa Morgan said “this is slightly better than we expected”: “Last year, we saw exceptionally strong sales of some products, which were further boosted by some phenomenal launches including Wii Fit and Mario Kart, and of course Grand Theft Auto 4. This year, we have a very solid but more normal release schedule, and we’re seeing lower hardware revenue.”

After Game’s £74 million 2007 acquisition of its rival, it’s expecting to save £10 million in stripping out duplication in 2008/09, and a further £6 million for the following year.

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