Game Digital share price jumped despite a "tough period" with a "disappointing performance" in the UK

Oliver Gill
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Game Digital is hoping new titles to be launched this year will bolster its financial performance in the UK

Game Digital shares jumped over five per cent this morning despite a sluggish half-year performance and cutting of its dividend.

Flash results for the first few weeks of March have given cause for optimism and the firm is hoping new consoles and associated titles will help to steady the ship.

The figures

Revenue fell by 9.1 per cent to £499m for the six months to 28 January.

Gross profit fell from £131m to £123m (a 5.6 per cent drop) but gross margins – the amount of gross profit made on each unit sale – increased from 23.8 per cent to 24.7 per cent.

Read more: Game Digital laments "tough" UK market

Profit before tax dived 26.7 per cent to £16.5m. The firm's events esports and digital channel extended its loss before tax from £2.4m to £5.6m.

Earnings per share slid 20.6 per cent to 7.7p while investors' dividend was cut by 40 per cent to 1p per share.

Why it's interesting

Game Digital has had a rocky return since falling into administration in 2012. It returned to the stockmarket in 2014 after OpCapita picked up the pieces.

Of late, operations in Spain have yielded good returns and this has continued in the latest six months.

Nevertheless, the first half of its latest financial year has been – in its own words – "tough".

Read more: Game Digital profits fall more than 80 per cent

But the firm's flash results for March have offered hope. And Game Digital is pinning such hopes on the demand for the Nintendo Switch and the upcoming launch of the Xbox Project Scorpio. Both consoles, Game Digital's boss Martyn Gibbs reckons, will lead to "a stronger slate of new titles later in the year".

What the company said

Chief executive Gibbs added:

Our first half saw another tough period for console hardware and physical software sales in the UK, impacted by a weaker line-up of new games launches and the market-wide underperformance of certain key titles.

Together, these dynamics resulted in a disappointing performance from our UK retail operations, however our Spanish operations and new business areas delivered further growth.

"We continue to prioritise our efforts on taking the necessary actions to respond to these challenges, whilst positioning the business to capitalise on major future market opportunities. Across the Group we are working hard to improve operational efficiencies and reduce costs.

"We have been pleased with the positive trading performance delivered in the first few weeks of the second half."

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