Game Digital FY profit drops amid challenging UK console market

13th Oct 2016 11:07

(ShareCast News) - Game Digital reported a big drop in full-year profit as revenue declined amid a challenging UK trading environment, particularly in consoles.Pre-tax profit slumped 81% to £4.9m in the 53 weeks ended 30 July compared to the 52 weeks ended 25 July, as revenue fell 5.1% to £822.5m.Game slashed its dividend per share to 1.75p from 7.35p in 2015.The group said trading conditions in the UK video games market remained challenging throughout the year, with the transition from older gaming formats to PlayStation 4 and Xbox One impacting profitability across the market. The effect of this transition was further compounded by lower footfall over the key Christmas trading weeks and a quieter schedule of major new games releases in the second half.Game noted that overall, the UK retail market - console, hardware, software, accessories and digital - fell 12.7% in the year, with hardware sales down 28.5% and boxed software sales down 9%.Chief executive officer Martyn Gibbs said: "Market dynamics in the UK have undoubtedly been tough in the past year. The management team responded quickly to these new market conditions and have made significant progress with its action plan since January. This has included improving supplier arrangements and terms, implementing efficiency and cost saving initiatives across the business; completing an organisation redesign and other process improvements. This programme of activity is ongoing and has started to help to improve our financial performance."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."Game said trading in the first 10 weeks of the year has been in line with group plans and reaffirmed its previous guidance for the year.At 1122 BST, the shares were down 2.2% to 68.48p.