Game Digital profits drop 32% amid falling sales
Retailer Game Digital saw half-year profits tumble by nearly a third amid "challenging" trading after being hit by weaker-than-expected sales of computer games.
The group, which has more than 320 stores in the UK and over 230 outlets in Spain, revealed pre-tax profits slumped to £22.5 million in the six months to January 23, down from £33.2 million a year earlier.
It was one of the casualties on the high street over Christmas after seeing sales of old-format games for PlayStation 3 and Xbox 360 consoles plunge, while sales of games consoles were also sharply lower.
Game warned over profits just before Christmas Eve after the dire festive trading.
But it said in its half-year results that trading had begun to turn around, with improved sales since Christmas.
It added that on an underlying basis, earnings fell less than feared, down 23% to £33.1 million in its first half and said it expects to deliver a "small, positive" earnings results for the second half.
Game also revealed it launched a company-wide review in January following the disappointing Christmas performance, which will see it refocus on new growth areas, while also considering possible shop closures.
Martyn Gibbs, chief executive of Game, said: " Operating in the fast-paced video games industry continues to present both opportunities and challenges to our business.
"Market dynamics in the UK were challenging during our peak trading period, although sales trends improved in the last week of December and first three weeks of January."
The group also expects the impact of falling sales of old-format games to ease going forward.
Shares dived by more than 10% after the half-year results and have been under pressure since the December profit alert, which sent the stock down as much as 40% at one stage on the day.
Its latest trading woes come after a chequered history in recent years. It was rescued from bankruptcy in 2012.
Then called Game Group, the firm was one of the high-profile high-street collapses following the financial crisis.
Administrators closed 277 of its 610 stores and it was then bought out of administration in April 2012 by OpCapita, an investment firm working for Elliott Advisors.
Elliott, which has retained a significant stake in the business, has since revamped and refocused the chain.