Game Group PLC - Christmas08 Trading Statement

RNS Number:7607L
Game Group PLC
15 January 2008

15 January 2008
The GAME Group Plc
Christmas 2008 Trading Statement

Trading update:
The GAME Group plc ('GAME') is today providing an update on its trading
performance over the Christmas period and for the 50 weeks to 12 January 2008.

Sales for the 6 week period ended on 12 January 2008;
• Total Group sales (including Gamestation) increased by 76.3%. Group like
for like (lfl) sales (excluding Gamestation) were up by 31.9%.
• Total sales for the UK and Ireland increased by 77.9% with lfl sales up by
30.3%.
• Total sales for International increased by 72.8% with lfl sales up by
35.4%.

Sales for the 50 week period ended on 12 January 2008;
• Total Group sales increased by 86.7%. Group lfl sales were up by 41.7%.
• Total sales for the UK and Ireland were up by 89.6% with lfl sales up by
42.9%.
• Total sales for International increased by 79.0% with lfl sales up by
38.5%.

Commenting on the Christmas trading period Peter Lewis, Chairman said:

"The Group has delivered an outstanding sales performance particularly given
the very strong comparatives for the prior year period when the Nintendo Wii
launched. The management team and all of our employees have done an excellent
job in delivering a market leading performance for the third consecutive
Christmas.

Our customer demographics are changing, with more women and mature gamers buying
products than ever before. Our strategy of evolving our specialist proposition
to meet the demands of these customers has driven our record growth.

The Board now expects the Group profit before non recurring costs (note 1) and
tax for the year to 31 January 2008 to be not less than £73m (2007: £29.5m)."

The top selling games during the period were FIFA 08 (publisher - EA Sports),
Call of Duty 4: Modern Warfare (Activision), Pro Evolution Soccer 2008 (Konami),
The Simpsons Game (EA Games), and Assassin's Creed (Ubisoft) - all available on
a range of formats. There was also an exceptional performance from some single
format games including Mario and Sonic at the Olympic Games (Sega) for the
Nintendo Wii, and Dr Kawashima's Brain Training (Nintendo) for the Nintendo DS.
Demand for both the Nintendo Wii and DS Lite consoles continued to exceed
supply.

As we said last month, the ongoing popularity of all formats has increased the
hardware share of total sales for the year to January 2008. The substantially
lower margins achieved on hardware, and overall lower margins from Gamestation,
have combined to reduce our gross margin. Taken together, the Board maintains
the view that the gross margin for the full year will be around 290 basis points
lower than last year.

Competition Commission:
On 5 December 2007 the Group welcomed the Competition Commission's provisional
clearance of the acquisition of Gamestation. The final report is expected no
later than 23 January 2008.

Outlook:
The current range and quality of products in the market is unprecedented. We are
confident that consumer demand for our products will remain strong as we
approach the March anniversary of the launch of the Sony PS3, and that the
supply of the Nintendo Wii and DS Lite consoles will continue to improve.

Next year the existence of five successful hardware formats and the evident
broadening consumer appeal should stimulate further growth. Following three
years of market leading lfl growth, we expect limited lfl growth during 2008
given the strong comparative period, accompanied by an improvement in the gross
margin as the proportion of software in the sales mix increases.

The Board remains confident with the Group outlook for the year to 31 January
2009.

The Game Group plc will report its Preliminary Results for the 12 months to 31
January 2008 on Tuesday 22 April 2008.

Notes:
1. Non-recurring costs

The costs to the Group of complying with the requirements of the Competition
Commission inquiry are anticipated to be around £4.5m in total, plus a
non-recurring charge of approximately £3.5m related to integration connected
with the acquisition of Gamestation.

2. Store numbers

As at 12 January 2008 8 December 2007 31 January 2007
Number Number Number
Company owned and concessions
UK and Ireland
- GAME 415 414 407
- Gamestation 235 237 -
650 651 407
France 169 167 130
Scandinavia 62 62 64
Iberia 209 203 165
Continental Europe 440 432 359
Australia 51 45 16
International 491 477 375
Total owned and concessions 1,141 1,128 782
Franchises
France 7 7 11
Iberia 10 11 18
Australia 4 4 6
Total franchises 21 22 35
Total operational outlets 1,162 1,150 817

Enquiries

GAME Group plc Lisa Morgan, Chief Executive +44 1256 784566
David Thomas, Deputy CEO and Group Finance Director
Simon Soffe, Head of Investor Relations and Group Communications

Brunswick Jonathan Glass +44 207 404 5959
Wendel Verbeek
Ash Speigelberg

This information is provided by RNS
The company news service from the London Stock Exchange

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