Even though like-for-like sales at the video games retailer Game tumbled 6.7 per cent in the year to the end of January, chief executive Ian Shepherd sounded a positive note. He pointed out that sales "outperformed" the 9.9 per cent slide seen in the market, meaning that Game took market share.
That may be true - but taking market share in such a fast-shrinking market isn't much of a victory. And the sales slippage since the year-end looks eye-watering - first-quarter like-for-like sales tumbled 12.1 per cent. Admittedly, the first quarter is traditionally quiet for Game, but the group is still facing another tough year as hard-pressed consumers think twice about spending on video games.
In response, Mr Shepherd is attempting to reposition the business by closing about 90 UK stores by end-2013, growing the online operation, building longer-term customer relationships through a loyalty programme and making the best of the pre-owned offering. The pre-owned side is a notably solid performer - sales there grew 29 per cent and the margin stands at 41 per cent.
Peel Hunt expects current year EPS of 8.2p (8.75p in 2011).
GAME GROUP (GMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 51p | MARKET VALUE: | £177m | |
| TOUCH: | 50-51p | 12-MONTH HIGH: | 101p | 43p |
| DIVIDEND YIELD: | 11.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 53% | |
| Year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 0.80 | 29.5 | 6.3 | 2.90 |
| 2008 | 1.49 | 68.0 | 13.8 | 4.40 |
| 2009 | 1.97 | 117.4 | 24.2 | 5.50 |
| 2010 | 1.77 | 84.2 | 17.5 | 5.78 |
| 2011 | 1.63 | 23.1 | 4.5 | 5.78 |
| % change | -8 | -73 | -74 | - |
Ex-div: 22 Jun Payment: 15 Jul *Includes intangible assets of £210m, or 60p a share | ||||
