Game Digital share price lifts slightly despite fall in profit before tax of more than 80 per cent

Francesca Washtell
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Game Digital's revenues and profits are both down

It's not all fun and games over at retailer Game Digital today, where both profits and revenue have fallen over the past year.

The figures

Profit before tax at the high street game seller plummeted 81 per cent to £4.9m in the 53 weeks to 30 July, down from £25.8m in 2015 as Game struggled with a "challenging UK console market".

Revenue at the group fell 5.1 per cent to £822.5m, which is ahead of the £815m the group forecast in a trading announcement in July.

Read more: Game Digital agrees £100m financing facility

Earnings per share dipped 74 per cent to 3.3p.

The retailer has also slashed its final dividend more than three-quarters to 1.75p, down from 7.35p in 2015.

Game Digital's share price had fallen by 3.9 per cent by mid-afternoon.

Game Digital Game Digital | mobile image

Why it's interesting

Game said it has achieved "significant" early progress with its UK action plan, which it launched in January, and saved approximately £4m from January to July.

Trading for the first 10 weeks of the new year has been in line with the group's plans, Game said today, while the company said it is "encouraged" by a line-up of new games, console and virtual reality launches that are scheduled for released over the peak period.

Read more: Game slashes divi by 77 per cent after drop in pre-tax profit

The group has been in a precarious position since its profit warning in December and it was one of the first retailers to issue such a warning related to Christmas trading.

However, it maintains its full-year results are in line with management expectations.

Game registered similar customer engagement levels across its major markets in the UK and Spain compared to 2015, with 1.2m new customers signing up to its retail loyalty programmes and 4.5m total loyalty programme customers in the year.

Read more: Profits at Game Digital jump

In September, the company's stock dipped after a new chairman, John Jackson, was appointed to take over from David Hamid. He will take up the position after the company's AGM in January.

Hamid has been chairman of Game Digital since its IPO for £340m in 2014, and of Game Retail Limited since 2012.

What Game Digital said

Chief exec Martyn Gibbs said:

Market dynamics in the UK have undoubtedly been tough in the past year.

The group continues to maintain strong customer engagement across the UK and Spain and has made further progress in driving its retail diversification plans, including strong performances in digital content, higher margin accessories, and preowned phones and tablets. In addition, we have achieved significant progress across our strategic growth initiatives, including esports, events, live gaming activities and digital services.

We recognise that we need to continue to reposition and transform the business. We have a clear vision to build a company that combines multichannel retail, live gaming and digital services to deliver a highly compelling and unique combination of products and services for gamers.

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