GAME reports declining first half turnover, rising gross margins

Leading UK videogame retail chain GAME Group has announced its interim results for the six months ended July 31st, revealing that turnover fell in line with expectations but gross margins grew to over 30 per cent.

Turnover for the first half was UKP 213 million, compared with UKP 231 million in the same period of 2003, and the group reported a pre-tax loss of UKP 5.9 million compared with a loss of 0.8 million last year.

The decline in the company's figures is broadly in line with projections, which anticipated a drop in turnover due to the lack of any hardware launches in early 2004, and the comparatively weak line-up of software during the period.

However, the firm did manage to increase its gross margin significantly, raising margins from 28.7 per cent in 2003 to 30.3 per cent in 2004 - a change of some 160 basis points.

"I outlined in April that the first half of the year would be challenging due to the lack of major new titles and no hardware launches," explained GAME Group chairman Peter Lewis. "The improvement in margins despite this environment demonstrates the ability of the management to influence the sales mix and improve buying terms."

GAME expects a strong second half to provide the basis for positive results over the full year, as one of the strongest line-ups of software ever in the Christmas season should exploit the company's accelerated programme of store opening to the full.