Chief quits as Game profits fall
- Credit: PA
Retailer Game Digital today announced the departure of its finance director as it reported a fall in half-year earnings after a tough Christmas prompted a profit warning earlier this year.
The group said Benedict Smith, who helped turn around the business following its rescue from administration in 2012, would leave later this year to take up a similar role at a private equity-backed business.
It also warned that the video games market in the UK had started 2015 'more slowly than expected', though it hoped for a pick-up in coming weeks driven by promotions around Easter and the launch of new titles.
The results comes two months after a post-Christmas profits warning following promotions starting on Black Friday which helped stores shift Xbox One and Playstation 4 consoles but weighed on margins.
Today Game reported a 1.8% fall in pre-tax profits to £33.2 million for the 26 weeks to January 25, on revenues down 0.7% to £582.1 million. Its key underlying earnings figure was down more sharply, by 16% to £43 million.
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The group, which operates in Spain as well as the UK, said it expected to report full-year earnings in line with market expectations - which have been lowered after Game said in January that they were expected to be flat on last year's £51.3 million.
Meanwhile, it rewarded investors following last June's return to the stock market, with a maiden dividend of 7.35p per share plus a special dividend of £25 million, equivalent to 14.7p per share.
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Chief executive Martyn Gibbs said: 'The video games market remains dynamic and competitive.
'While we experienced some challenging conditions over the Christmas trading period, we are confident that our strategy of focusing on customer recruitment, combined with the significant and growing number of Xbox One and Playstation 4 owners across our two major territories, provides a solid foundation from which to drive growth over the medium term.'
Game said it had maintained market share at 33% in the UK and increase it from 34% to 36% in Spain. Meanwhile there was strong growth in digital revenues, up 40% year on year, it said.
On the departure of Mr Smith, Mr Gibbs said: 'Benedict leaves the business in a strong financial position and, though he will be with us for a few months, I and all the team would like to take this opportunity to wish him well in his future role.'
The finance director will remain on the board until July and the search for a replacement has begun, the group said.