UK retailer GAME has released a trading update for the full-year ending July 28th, 2018, which shows an uptick in overall sales but a slight dip in revenues.
The group's GTV (Gross Transaction Value) rose by 1.8% over the previous financial year from £891 million to £907.2 million. This is despite a decrease for the second half of the year, which saw GAME's GTV slip by 1.6% from £325.6 million to £320.4 million.
The firm expects group revenue for the full year will show a slight decline on a statutory basis from £782.9 million to £780 million.
Looking at each part of the business, the Spanish retail division continues to show growth, with its GTV up by 0.7% for the last six months and by 7% for the full year. The UK chain, meanwhile, saw a decline of 3% for the second half and 1% for the full year.
Reflecting on these results, GAME notes that it continues to see strong sales for lower-margin digital and hardware products and faces ongoing problems in the pre-owned business. But the retailer has been boosted by key new releases over the past six months, with God of War singled out as a key example.
Declines have been minimised by the GAME Group's continued efforts to save on operational costs, including ongoing lease renegotiations for its UK stores, and a reorganisation of its head office and distribution centre, which took place in the second half.
The firm is also optimistic about its ongoing plans for the Belong arenas, particularly after signing an agreement earlier this year with Sports Direct to build on these. So far, this has enabled GAME to increase the capacity of its current arenas by 16% and establish a new Belong in Westfield Stratford, which opened doors last week.
This 50-seater arena will be followed by a 24-seat one at Lakeside Thurrock in September - both larger than the current average of 19 gaming desks per arena.
"We have made further progress in the second half of the year to right-size the UK retail business by reducing the cost base, whilst capitalising on all market opportunities to address the challenges and changes in the UK retail market," said CEO Martyn Gibbs. "This review of costs will continue into the next financial year. Our Spanish business continues to perform well, with strong full year sales performance and sustained management of its efficient operation.
"The existing 19 Belong arenas continue to perform well with all key metrics advancing, a considerable affirmation of the offering. Opening the first two arenas in collaboration with Sports Direct represents a significant step forward as we implement our strategy to increase the availability and scale of Belong, our experienced based gaming offer and esports activities.
"The UK and Spanish mint retail markets continue to show growth and we expect that this momentum will continue into our new financial year and the peak trading period, driven by a strong line up of new software releases."