Game Digital has recovered from a profit warning in January to declare robust trading in the second half of its financial year as customers bought more games to play on their consoles.
The company also said its foray into mass gaming was going well. Its Multiplay business, acquired in April, has sold more than 35,000 tickets for the Insomnia festival, to which games enthusiasts bring their consoles to play games and watch others in action.
In a trading update, Game said increased sales of high-margin games such as Batman: Arkham Knight more than offset lower sales of Xbox and PlayStation 4 consoles in the second half of the year ending 25 July. “The second half of the year saw a robust trading period for the group,” Game said.
Revenues excluding hardware rose more than 7% in the second half and margins widened. Sales of digital games and secondhand products were strong, the company said.
The company, which floated on the stock market last year, issued a profit warning after Christmas. Feverish competition over Black Friday forced Game to give away more high-quality games to sell consoles. The effect lasted into March as gamers remained glued to their existing games instead of venturing out to buy new products.
Game’s biggest markets are the UK and Spain, where its revenues increased 25% in the second half of the year. The company said group annual earnings would be in line with market forecasts for about £46m and that it expected sales and profits to increase in the current financial year.
Martyn Gibbs, Game’s chief executive, said: “The group traded well throughout the second half, with a strong performance on new release titles and preowned technology products. We have made good progress on our customer and community engagement and strategic priorities over the year. Our ambition to broaden our offer beyond purely retail, to the places and ways in which our customers play games, is moving forward at pace, with continued support from our supplier partners.”
Gibbs said preparations for pre-Christmas trading were well advanced and that a strong line-up of games for release would help sales.
Game sold shares at 200p each in June 2014 and they hit a peak of 364p in November. The shares, which plunged after January’s profit warning, rose 2.2% to 266p in early trading on Tuesday.
