GAME Group share prices plummet following profit drop and CEO departure

Leading gaming retailer GAME Group (LON:GMG) has recorded 28 per cent falls in profit for the year, leading to the resignation of CEO Lisa Morgan and plunging share prices down by as much as 14 per cent today.

Rob Hull
shareprices.com - Wednesday, April 21, 2010

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GAME Group profits dropped by 28 per cent

The high-street and online computer game retailer announced pre-tax profits had dropped to £84.2m from £117.4m for the previous year.

Today’s update resulted in share prices in GAME Group opening at 92.60p, 8.59 per cent down, and continued to fall to a low of 87p.

The group blamed the drop in profit on a downturn in the wider computer gaming sector with the Nintendo Wii console being the biggest underperformer.

And despite GAME Group Chairman Peter Lewis saying the company intended to put £10m into developing the brand online, analysts have said it will still come under intense competition from supermarkets like Tesco (LON:TSCO) and Sainsbury (LON:SBRY) as well as online-based gaming retailers.

However, new launches this year including Sony’s PlaystationMove and 3D gaming from both Sony and Nintendo may help the fortunes of GAME.

It’s understood that, following a board meeting this morning, Morgan decided to resign from her position after being appointed by the board to take control in 2006.

Non-executive director Chris Bell has filled the vacant position until a new CEO is found.

Lewis said: “On behalf of the Board, I would like to thank Lisa for her exceptional contribution over the last 14 years.

“We have commenced the search for a new CEO.

“In the meantime I am delighted that Chris has agreed to take on this role on an interim basis as the company moves into the next phase of its development.”

The firm’s UK chief operating officer Terry Scicluna also stepped down from his position following the report, but remains at the group during the transitional phase.

GAME Group share prices currently sit 10.86 per cent down at 90.30p at 11:30BST putting it firmly at the top of the FTSE 250 fallers list for the day.

 

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