Game Digital (GAME) seems a very different beast to the one that went bust in March 2012. It's a company "reborn out of the ashes", according to management: considerably sleeker, with a smaller store base, well-invested technical infrastructure and, thanks to the IPO in June, a healthy balance sheet.
Game is putting digital innovation at the heart of its operations. An e-payment system called Game Wallet - developed in-house - was launched in June and already has 200,000 users. The pre-owned business, which accounted for more than 30 per cent of gross profit last year, has a new platform called Gametronics, allowing consumers to buy and sell used mobile phones and tablets in-store. Game is also set to unveil Game Marketplace, an Amazon-style platform facilitating trading between third parties and customers. Chief executive Martyn Gibbs is counting on these various initiatives to diversify the business and secure long-term growth.
For the year to July, operational leverage meant that group sales growth of 31 per cent translated into a more than doubling of adjusted operating profit to £44.5m. Both the UK and Spanish businesses grew their market share last year, to 33 per cent and 35 per cent respectively.
Canaccord Genuity expects adjusted EPS of 25.5p for the current financial year, up from 17.8p last year.
| GAME DIGITAL (GMD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2309p | MARKET VALUE: | £525m | |
| TOUCH: | 305-312.5p | 12-MONTH HIGH: | 309p | LOW: 186p |
| DIVIDEND YIELD: | nil | PE RATIO: | 24 | |
| NET ASSET VALUE: | 85p* | NET CASH: | £83.7m | |
| Year to 26 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013** | 658 | -15.4 | na | na |
| 2014 | 862 | 7.3 | 13 | nil |
| % change | +31 | - | - | - |
Ex-div: na Payment: na **Pre-IPO figures *Includes intangible assets of £54.8m, or 32p a share | ||||
