The Game Group PLC : Christmas 2012 Trading Statement

Christmas 2012 Trading Statement

10/01/2012

The GAME Group plc ('GAME' or 'the Group') is today providing an update on its trading performance over the Christmas period and for the 49 weeks to 7 January 2012.

	8 weeks to 7 January 2012		49 weeks to 7 January 2012
	Total sales (%)	Lfl sales (%)	Total sales (%)	Lfl sales (%)
Group	-14.7%	-12.9	-11.9	-10.0
UK & Eire stores	-17.6	-15.2	-14.5	-12.0
International stores	-12.0	-11.4	-9.5	-8.2
Group Online	3.9	3.9	1.3	1.3

• Our performance was ahead of the overall games market, which was -13.1% for the 49 weeks. Full year Group like for like (lfl) sales are now expected to be no better than -10.3%.
• In response to challenging market conditions, promotional activity impacted gross margins over Christmas and full year gross margins will now be down by approximately 190 basis points.
• Cost control has been maintained and full year operating costs will be £8-10m lower than last year, as previously stated.
• Strong working capital disciplines have supported operating cashflow. The Group expects to have a year-end cash position similar to last year (2011: £120m).
• The Group currently remains compliant with its loan covenants. However, the difficult market conditions raise the likelihood that it will not meet its EBITDA covenants (fixed charge coverage and leverage) when they are tested on 27 February 2012 for the period to 31 January 2012. Given the year-end cash position, the debt service covenant should be met satisfactorily. The Group continues to be in regular and constructive dialogue with its lenders, who remain supportive.
• The PlayStation Vita will launch in Europe on 22 February, and the Nintendo Wii U is scheduled to launch later in the year. GAME expects to be the European market leader for each launch.

Ian Shepherd, GAME CEO said: "Our industry had an incredibly tough 2011, and so did we. We remain the market leader and have a clear strategy which will return the business to growth. We are adapting to the changing market and are well prepared for the next hardware cycle."

- ENDS -

Notes:

1) The GAME Group management team will host an analyst conference call at 9.30am on 10 January 2012. For further details contact Brunswick on 020 7404 5959.

2) Strategic KPI progress:

-	Store closure programme on track: net 39 stores closed this year; on target to have circa 550 UK stores by 2013. Short average lease lengths allow this programme to be accelerated if necessary.
-	Expansion of digital offer: digital sales growth over 40% year-on-year.
-	Customer loyalty: half a million new customers joined the Group's loyalty schemes in the 8 weeks since 16th November, taking the total to 19.8m.
-	Innovative retail: following launch of GAMEwallet, 12 new games added to the service.
-	Multichannel development: e-commerce market share holding firm in competitive market.

3) Store numbers:

	7 January 2012	31 January 2011
	Number	Number
	Company owned and concessions
	UK and Ireland: - GAME - Stores - GAME - Concessions - Gamestation	610 368 10 232	639 381 11 247
	France	193	197
	Iberia	291	287
	Scandinavia	57	65
	Czech Republic	30	31
	Total Continental Europe	571	580
	Australia	92	93
	Total International	663	673
	Total owned and concessions	1,273	1,312
	Franchises
	Australia	1	1
	Total franchises	1	1
	Total operational outlets	1,274	1,313

Contact:

GAME Group plc	Ian Shepherd, Group CEO Ben White, Group Finance Director Simon Soffe, Communications & Investor Relations Director	[phone]
Brunswick Group	Jonathan Glass James Olley Natalia Marisova	[phone]