Game shares rally on upbeat trading statement
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Game Group yesterday released an optimistic trading statement in an attempt to halt its tumbling share price.
The gamble appears to have paid off, with shares in the video retailer rallying some four pence this morning, currently trading at 190p on the London Stock Exchange (LSE).
Last week, the firm's shares fell 17 per cent on the LSE after Game directors sold 2.3 million shares.
Yesterday's trading statement, which is the last before the firm enters a closed trading period, offered investors reassurance about Game's current financial position. Game releases prelimary results 29 April.
The retailer said pre-tax profit for the year ended 31 January 2008 should be up a smidgen on its previous forecast of £73m – it now predicts no less than £74m, compared to £29.5m in 2007.
It was also upbeat enough to suggest its like-for-like sales growth of five per cent to 10 per cent was achievable. In early January the mood was more cautious, with Game warning that store growth was likely to slow and that it would be in the "low single digits" for the year ahead.
The firm's board said it was confident "the market for PC and video games products remains buoyant".
It said gross margin should improve by 50 to 100 basis points and added that the £7m of synergies it had identified with Gamestation should now be realised earlier that predicted.
Game bought Gamestation from Blockbuster in May last year. Following the acquisition, the Office of Fair Trading refered the deal to the Competition Commission, which cleared Game of any wrongdoing last January. ®