Game Digital to meet expectations after strong second half

11th Aug 2015 10:46

(ShareCast News) - After issuing a profit warning in January, Game Digital has reported it is on track for the end of the year.Shares in the video game retailer rose by 1.92% to 265p at 1056 BST after it avoided issuing another profit warning, as had been expected by some analysts.Game Digital said in a pre-close update that overall margin improvement led to a 9% increase in gross profit for the second half of the year.The company said revenue was up by more than 7% in the second half, while digital sales rose by 16%.The overall UK video games market was expected to grow over the next 12 months, with new generation software, digital content and accessories to offset declines in lower margin hardware sales, Game Digital said.Management said it was confident in sales and profit growth for the year 2015-16.Independent retail analyst Nick Bubb said: "Given the vibes about continued weak trading conditions in the industry, there was some nervousness about what Game Digital would say today in its pre-close update, but, surprisingly, there is no profit warning for the year ending in July."Analysts at N+1 Singer agreed that there was nervousness about Game Digital's pre-close update, and it too was surprised there was no profit warning.