Game trumpets record results

The UK retailer sees share price spike after it reports a 156 percent increase in profits.


Super Smash Bros. Brawl
Grand Theft Auto IV
Wii Fit

The year 2007 was good for gaming, with the likes of Super Mario Galaxy, BioShock, Guitar Hero III, and Portal providing top-notch experiences for gamers of all tastes. Such a breadth of titles, coupled with a price drop for Microsoft's Xbox 360, improving stock levels of Nintendo's Wii, and the launch of Sony's PlayStation 3 all amounted to a bumper fiscal 2007 for British high street retailer Game. Chief executive officer Lisa Morgan described the results as "a record year for the group."

Game, which billed itself as the UK's biggest games retailer even before its merger with Gamestation was green-lighted in January, reported that it has boosted profits, total sales, and like-for-like sales by impressive margins. The company also grew from 817 to 1,170 stores, in five different countries. As well as various internal changes, the company stated in its preliminary results for fiscal 2007--the 12 months to January 31, 2008--that one of the factors behind its forward march was, "The Nintendo Wii and DS Lite... broadening the appeal of video games."

The retailer today reported that, excluding a £7.1 million ($14 million) charge related to the Gamestation acquisition, it saw its profits more than double year on year. Excluding these costs, and before tax, Game's profits were up 156 percent to £75.5 million ($149 million), with sales up 86 percent to £1.491 billion ($2.951 billion). Game's e-commerce arm also gave sales a healthy boost, with turnover from its online shop increasing 147 percent year on year.

Signs for 2008 are also good for the retailer. Like-for-like sales are up 20 percent year on year for the 13 weeks to April 26, despite the fact that the PlayStation 3 launched in the UK in that period last year. The company plans to continue its aggressive expansion, with "around 100" store openings planned for this fiscal year, with, "key focus on France, Spain, and Australia." Discussing the outlook for the next year, Game CEO Lisa Morgan picked out the launches of Wii Fit, Super Smash Bros., GTAIV, Lego Indiana Jones, and Rock Band as titles likely to keep the retailer's results heading in the right direction.

The stock market reacted very positively to these results, with the share price peaking at 274p ($5.40) in the first hour of trading on the London Stock Exchange, a rise of 8.7 percent compared to yesterday's closing price of 252p ($4.99). At time of writing shares were 266p ($5.25).

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