GAME reports turnover drop in quiet first half

Leading European retailer GAME Group Plc has announced its interim results for the six months to July 31st, revealing that the group's like for like turnover dropped by over 5 per cent as retail sales hit a speed bump.

However, the firm's continued aggressive programme of store openings meant that overall turnover actually rose by just shy of four per cent to GBP 220.8 million, with the company on track to have 295 stores in Europe and 410 in the UK and Ireland by Christmas.

The bottom line of the results shows a loss before tax of GBP 14.7 million, up significantly on the GBP 3.5 million loss which was posted in the first half of last year - but the company is seemingly unperturbed, and confident that the second half will be a successful one.

"As I outlined in April and in our trading update in July, 2005 has been and continues to be a transitional year," commented group chairman Peter Lewis. "The significant price deflation as the current generation of consoles reach maturity, the lack of hardware launches and the tough retail environment have resulted in significant first half losses."

"We have made strategic investments of GBP 17.2 million in the infrastructure of the business through new store openings, store refits and the continued expansion in Europe to cement out market leading position ahead of the next generation console launches," he explained.

"The second half offers better opportunities given the strong launch sales of the PSP and the solid Christmas software lineup."

However, while the firm does note that the PSP launch has been a success, it also mentions that demand for the console is still exceeding supply - with replenishment of stocks of the console described as "limited."

"The benefits of our investment will come through beginning in 2006," Lewis predicted, "with a steady supply of the Sony PSP, Microsoft Xbox 360, the first next generation console which launches in December 2005, then the Sony PlayStation 3 and Nintendo Revolution set to follow. These new platforms will greatly increase demand for video games."